Nebraska Supreme Court rules in favor of homeowners in ‘home equity theft’ cases

Lincoln, NE; August 23, 2024: Today, the Nebraska Supreme Court ruled in favor of Nebraska homeowners who were victims of legalized home equity theft — an unconstitutional scheme whereby the government takes more than what it is owed to satisfy property tax debts.  

“We are thrilled that after years of litigation, Nebraska finally recognizes Kevin Fair’s and Sandra Nieveen’s right to their hard-earned equity,” said Christina Martin, senior attorney at Pacific Legal Foundation. “The Nebraska Supreme Court held that home equity is protected by the Constitution and that the government cannot take more than what it is owed. This is a great outcome for our clients and all homeowners in the state.” 

In 2013, after Kevin Fair’s late wife was diagnosed with multiple sclerosis, he quit his job to care for her at their Scottsbluff, Nebraska, home. But shortly after, Kevin fell behind on his property taxes and the County sold a tax lien for the unpaid taxes to Continental Resources, a private investor. 

The County later issued a deed to the investor for Kevin’s home and all of the equity he had in it, which was worth around $60,000, even though he owed only $5,268 in back taxes. 

Sandra lost her home in similar circumstances. 

With help from Legal Aid of Nebraska, Kevin and Sandra sued in state court to have Nebraska’s home equity theft laws declared unconstitutional. Unfortunately, they lost their claims at the Nebraska Supreme Court. Shortly after, with the help of Pacific Legal Foundation (PLF), both asked the U.S. Supreme Court to end home equity theft in Nebraska.  

Last May, the United States Supreme Court ruled in another PLF case — Tyler v. Hennepin County — that if the government takes more than what is owed to satisfy a property tax debt, it violates the Fifth Amendment’s Takings Clause. After the Supreme Court decided Tyler, it granted Kevin’s and Sandra’s petitions and sent their cases back to the Nebraska Supreme Court to reconsider their claims in light of Tyler. 

In view of the Supreme Court’s unanimous ruling, the Nebraska Supreme Court reevaluated Kevin’s and Sandra’s claims and ruled that they must be paid for the excess equity that remained after their property tax debt was satisfied. The Court sent the cases back to the trial court to determine how much the homes are worth and thus how much compensation Kevin and Sandra are owed. 

Today’s decision also sends a signal to other states that have not yet complied with the U.S. Supreme Court ruling in Tyler that property owners’ rights must be protected.   

The cases are Fair v. Continental Resources and Nieveen v. Tax 106.