Tyler v. Hennepin County

Geraldine Tyler, a 94-year-old Minnesota woman, fell behind on property taxes for her condominium, owing about $15,000 including penalties and interest. Hennepin County foreclosed on the property, sold it for $40,000, and kept the remaining $25,000 as profit rather than refunding the surplus to Tyler. Tyler sued, arguing that the county’s retention of her home equity beyond the tax debt constituted an unconstitutional taking under the Fifth Amendment. The case reached the U.S. Supreme Court, which on May 25, 2023 unanimously ruled in Tyler’s favor. Chief Justice John Roberts wrote that a taxpayer’s property interest in the surplus value is protected, and the county’s failure to return the excess proceeds amounted to a taking without just compensation. The decision reversed the lower court and remanded the case.

The U.S. Supreme Court unanimously held that Hennepin County’s retention of surplus equity after a tax foreclosure sale constituted an unconstitutional taking without just compensation, reversing the Eighth Circuit and remanding for further proceedings.

Whether a local government violates the Takings Clause of the Fifth Amendment when it seizes and sells a home to satisfy a property tax debt and retains the surplus proceeds above the amount owed.

The ruling curbed “home equity theft” practices across the United States, requiring state and local governments to return surplus proceeds from tax sales to former property owners, and prompted legislative reforms in many states to protect property rights.