Abstract:

This article discusses the Supreme Court case Tyler v. Hennepin County, which addressed the issue of home equity theft when local governments foreclose on properties for unpaid taxes and keep the surplus funds. The Court unanimously ruled that retaining surplus equity constitutes a taking under the Fifth Amendment, requiring just compensation to the homeowner. The decision strengthens property rights, particularly for lower-income individuals who are disproportionately affected by such practices. Analysis shows that the decision led to an increase in the sales prices of low-value homes in states that had previously engaged in home equity theft.

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