Geraldine Tyler, the 94-year-old Minneapolis woman at the center of next month’s argument before the Supreme Court in Tyler v. Hennepin County, only owed $2,300 in property taxes. That’s what started this whole thing.
Ms. Tyler acquired a small condominium in 1999. After she moved in, crime in her neighborhood began increasing and because she was elderly and living alone, she and her family became concerned about her health and safety. In 2010, Ms. Tyler ﬁnally began renting an apartment in a safer neighborhood and the property taxes on the condominium went unpaid.
When you fall behind on property taxes, the government has a right to seize your property and sell it to settle your debt. That’s what Hennepin County did, selling Geraldine’s condo for $40,000.
The tax debt started out as only $2,300, but that ended up being only a fraction of Geraldine’s total debt to the government. The county tacked on thousands of dollars in interest, penalties, and other costs that eventually brought Geraldine’s total bill up to $15,000.
Geraldine should have gotten $25,000 from the sale after the county satisfied her $15,000 debt. But instead the government pocketed the whole $40,000.
Geraldine is still sharp at 94 years old. She has three children and four grandchildren, whom she adores. She also has a 76-year-old niece, Joan, who orders Geraldine’s groceries and checks in on her. The two women have been close all their lives. Now they’re the oldest ones left in their family. Sometimes they attend parties at their social club; other times they call each other and talk about the past—the relatives they’ve lost, their shared memories from Joan’s childhood, and Geraldine’s stories from when she was young. (“She went out with one of the Tuskegee Airmen,” Joan says.)
Both women used to work for the government, incidentally. Joan worked in human resources at the Department of Homeland Security and Department of Agriculture. Geraldine worked for Hennepin County—the same county that took $25,000 of home equity from her.
Joan is surprised about what happened to her aunt. “We’re finding out that this is what the government does, this is the practice they have,” she says indignantly. “They take your stuff and then they make a profit off of it and you don’t get anything. And how many people have they done this to? And how is this fair? How can this even be a thing?”
The one-bedroom condo Geraldine owed taxes on is in the neighborhood of Folwell in North Minneapolis. Geraldine was 70 years old when she bought the condo, and for a decade she lived there and paid property taxes every year. But as she got older, she grew anxious about walking around her neighborhood.
Despite her concerns, Geraldine might have stayed in the condo longer were it not for an encounter with a particular neighbor, a young man who yelled at her. That was the last straw. In 2010, at 81 years old, Geraldine packed her bags and moved to a senior community.
Finally, surrounded by other seniors, in a quiet and peaceful community, she felt safe and comfortable. “She really enjoys being around people,” Joan says. She started going to regular potlucks and Wednesday night bingo.
Meanwhile, of course, her property tax debt on the condo piled up.
At least a dozen states are guilty of allowing home equity theft, the seizure and sale of property to settle tax debts without returning surplus proceeds to the homeowner. Counties and cities will either sell foreclosed properties and keep the profits to pad their budgets—as happened in Geraldine’s case—or they’ll sell tax liens to private investors who then flip the properties for a tidy profit.
A Pacific Legal Foundation report found that between 2014 and 2020, Minnesota counties seized and sold at least 1,200 homes. These property owners lost not only their homes, but any equity they had saved up in the properties—and PLF’s research suggests the stolen savings amounted to an average of $207,000 per home in Minnesota, or 92% of the home’s total value. Nationwide, local governments wrongfully seized nearly $800 million in home equity during the same period.
Geraldine suffered a smaller monetary loss than many victims of home equity theft. The equity she lost was likely worth around $25,000. PLF client Alan DiPietro, an alpaca farmer in Massachusetts, lost more than $310,000 in equity after his town seized and sold his 34 acres.
And Geraldine, who has an extended family, is not in danger of becoming homeless—unlike, for example, PLF client Kevin Fair, a Nebraska widower who’ll have nowhere to go if he loses his small home and all the equity in it. Kevin only owed $588 in property taxes when the county sold his tax lien to a private investor for the amount of his debt; now that the investor has foreclosed on his home, he could be left with nothing.
“I’ll be homeless,” Kevin says. “Everybody in my family has passed away.”
For Geraldine, who enjoys playing bingo at her senior living community, being homeless is not at stake. And she is not interested in personal notoriety—she doesn’t even want to talk to the media. When PLF started working on her case on appeal and filed a cert petition at the Supreme Court, Geraldine was amazed that her case would be considered by the nation’s highest court.
When asked what she would do if the government finally pays her the $25,000 it owes, Geraldine doesn’t have any life-changing plans. Maybe she’d buy a new mattress, she says; she heard you’re supposed to buy a new one every 20 years.
But that’s not why she wants to win.
“It would mean a lot to me to win this case,” Geraldine tells PLF, “especially because it would help old folks like me.”
She’s right. Winning this case would prevent the government from stealing equity from other Americans—and as the AARP notes in an amicus brief supporting Geraldine’s case, home equity theft has a “devastating and disproportionate impact” on older homeowners.
When Michigan nursing assistant Tawanda Hall—another PLF client whose home equity was stolen by the government—heard that Geraldine’s case was going to the Supreme Court, she passed along a message of support and commiseration to Geraldine.
“I’m so sorry that after everything you’ve been through in your life that you still have to fight this battle at your age,” Tawanda said.
Tawanda knows how important the battle is: She fought and won her case against home equity theft in the U.S. Court of Appeals for the Sixth Circuit, helping to put an end to home equity theft schemes in her home state.
Now Geraldine’s case could set a national precedent.
“I would love to see the Supreme Court end this practice,” Tawanda says, “because no one should go through losing all the value in their home. It’s totally unfair.”
This article originally appeared in the Spring 2023 edition of Sword&Scales.