BOSTON – The New England Legal Foundation (NELF, www.newenglandlegal.org), the leading non-profit public interest law firm in the region, has filed an amicus, friend-of-the-court brief with the US Supreme Court opposing homeowner “equity theft” by government, when delinquent taxes are collected.
According to NELF Staff Attorney John Pagliaro, who wrote the brief, the issue in the Nebraska-originated case of SANDRA K. NIEVEEN v. TAX 106, et al, is, “when government seizes your home to collect overdue taxes, must it give you any surplus proceeds if it sells the property to pay the taxes, or compensate you for your lost equity if it retains but does not sell the property?” In at least 11 states, including Nebraska and Massachusetts, the government may seize your property, sell it, and leave you with nothing.
In the NELF brief, Pagliaro said, “we made two points about traditional property rights as they would have been conceived at the time the Constitution was written and as we think they should be protected now. First, we discussed the history of tax seizures in England and showed that their history, from Magna Carta onward, had been one of curbing government’s power to seize excess property and also of requiring it to return any surplus sales proceeds. … We also examined the history of mortgaging real property to secure payment of a debt. Here, too, as we showed, it became the norm in England for the creditor mortgagee to be strictly limited to taking only so much of the value of the real estate as would satisfy the debt.”
Pagliaro added, “Secondly, we traced the development of the concept of having equity in one’s home as a property interest. Drawing on both modern scholarship and historical learned works, we showed that in England a property owner who had mortgaged land had a right to redeem it by repaying the debt and that courts steadily expanded this right to redeem (called the equity of redemption). Eventually, they came to treat it as representing a distinct ownership interest in the land (the “equity,” i.e., the value of the land, minus the value of the debt), and not a mere right to re-acquire the property. We therefore urged the Supreme Court to take the case in order to clarify for lower courts that these two property rights enjoy constitutional protection when the taxman comes for his taxes.”
NELF President Dan Winslow noted, “While the issue of legalized ‘equity theft’ is rare, even in Massachusetts, there have been several such cases in recent years; a similar case from the town of Ware is currently in court, and just a few years ago, a case in New Bedford was settled out of court. As a guardian of property rights, the New England Legal Foundation is proud to be on the side of homeowners and commercial property owners when it’s time to pay one’s taxes in an equitable manner.”
CONTACT: Burt Peretsky, <peretsky@gmail.com>, 781-696-5579
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About the New England Legal Foundation
The New England Legal Foundation (NELF – www.newenglandlegal.org) is the leading non-profit public interest law firm in the region dedicated to addressing issues of law and policy related to free enterprise. NELF’s ongoing mission is to champion individual economic liberties, property rights, limited government based on rule of law, and inclusive economic growth. NELF challenges actions by governments and special interests which would unreasonably intrude on the economic freedoms of individuals and business enterprises in New England and the nation. We believe that economic liberty is fundamental to a democratic society and offers the most sustainable path to advance the American ideals of life, liberty, and the pursuit of happiness.