A Minnesota county sold a woman's condo for $40,000 over a $15,000 tax debt and kept the rest; what did the US Supreme Court say?

In 2023, the US Supreme Court intervened in the case of a 94-year-old woman from Minnesota. Her name was Geraldine Tyler. Hennepin County had sold her condominium for approximately $40,000. All of this reportedly happened due to unpaid property taxes. Notably, the original tax bill was around $2,300. But, after interest and penalties, the debt was increased to around $15,000. Hennepin County sold the property for $40,000 and kept the money left after settling Tyler's tax debt, according to the US Supreme Court. The dispute was mostly about whether the county could keep more than Tyler owed. It was not about whether the county could collect the taxes.

What exactly happened in this case?

Tyler had purchased a one-bedroom condo in Minneapolis in 1999 and lived there for several years. She moved into a senior living facility in 2010. But, she continued to own the condominium.

According to reports, the original tax liability of about $2,300 had grown to around $15,000 by 2015. The reason behind it was that interest, penalties, and other charges increased.

After this development, Hennepin County took ownership of the condo, and then sold it for $40,000, which was enough to cover the outstanding debt.

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What did Tyler do next?

Tyler challenged it in court, and argued that keeping the surplus violated the Fifth Amendment's Takings Clause.

Under the Eighth Amendment's Excessive Fines Clause, a claim was also raised by her. But, a federal district court dismissed Tyler's lawsuit. The US Court of Appeals for the Eighth Circuit upheld that decision.

Later, the US Supreme Court agreed to hear the case.

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The Supreme Court's decision

The Supreme Court delivered a unanimous 9-0 decision. It came in Tyler's favour on May 25, 2023. It stated that Tyler had a valid constitutional claim over the county's retention of the surplus. The court also said that the government could collect unpaid taxes by selling property, but could not keep the additional value. It revered the Eighth Circuit's judgement.