June 6 is deadline for property forfeiture surplus claims

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The coda in the lawsuit brought by a Minneapolis grandmother in her 90s whose case made it all the way to the U.S. Supreme Court is here. Minnesota homeowners whose tax-forfeited property was sold by a government entity for more than they owed can potentially reclaim thousands of dollars. The final day that claims can be submitted is Friday, June 6.

Geraldine Tyler owned a condo in Minneapolis but moved out in 2010 due to neighborhood crime. She could not afford the property taxes on her condo in addition to the rent for her new residence. She ended up losing her Minneapolis condo after Hennepin County seized it in 2015 over $15,000 in unpaid taxes, penalties, and fees. Though the condo was valued at $93,000, the county sold it for $40,000 and kept the full amount, which was $25,000 more than what was owed.

Tyler sued, claiming that Hennepin County was engaged in home equity theft by taking a $25,000 windfall. The case went to the U.S. Supreme Court in 2023. In a 9-0 decision authored by Chief Justice John Roberts, the court found that Hennepin County violated the Takings Clause of the U.S. Constitution and ruled that Tyler was entitled to keep the excess money.

Class-action lawsuits on behalf of other Minnesotans who did not get to keep their home equity after the property was seized and sold for unpaid property taxes were filed. Minnesota agreed to a $109 million settlement to resolve the claims that it violated property owners’ constitutional rights by not compensating them for the value of their tax-forfeited properties beyond the amount owed in unpaid taxes, fees, and costs. It covers roughly 6,000 properties going back a decade.

Class members can receive up to 90% of the forfeited property’s surplus value, which is the value of the property at the time of the forfeiture minus taxes and other charges owed. Mineral rights owners receive a flat $300 payment. They can also receive interest starting from the forfeiture date.

The property tax settlement can benefit a Minnesotan who had an ownership interest, lien, or security interest in property forfeited to the state in the last several years for nonpayment of property taxes when there was surplus value. Included are properties forfeited between August 16, 2012, and December 31, 2023, in Hennepin County; between June 2, 2016, and December 31, 2023, in St. Louis County; and between June 23, 2016, and December 31, 2023, in all other Minnesota counties.

The deadline to submit a valid claim form is Friday, June 6. Anyone who has a claim can submit it here: https://mntaxforfeituresettlement.com.

Minnesota also responded to the lawsuit by passing a bill that details a new way of dealing with forfeited properties. Owners whose property is in forfeiture must be informed about tax relief programs. Counties that sell properties for more than the taxes and fees owed must notify the owner so that they are able to file a claim and collect the surplus.