NAHB Joint Efforts Successful in Minnesota Takings Case
In a key win for NAHB and private property owners, the Supreme Court on May 25 handed down a unanimous decision delivering a victory to a landowner in a takings case out of Hennepin County, Minn. The landowner, 94-year-old Geraldine Tyler, owned a condominium that accumulated approximately $2,300 in unpaid real estate taxes and $13,000 in interest and penalties. The county sold Ms. Tyler’s property for $40,000, which satisfied her $15,000 tax debt. But under Minnesota law, the county kept the $25,000 in excess proceeds as a windfall.
Ms. Tyler sued Hennepin County, alleging the seizure of the excess proceeds from the sale of her house constituted a violation of the Fifth Amendment’s takings clause and a violation of the Eighth Amendment’s prohibition on excessive fines. At the trial court level, the case was dismissed for failure to state a claim. The Eighth Circuit affirmed.
Upon review, the Supreme Court found that Ms. Tyler’s lawsuit did in fact state a plausible claim. The county keeping the excess proceeds constituted a taking.
Seizing upon points raised in NAHB’s joint amicus brief, the Supreme Court noted that while state law is an important source of property rights, it cannot be used to circumvent traditional property interests. The Supreme Court also recognized the brief’s argument that since the Magna Carta, English and American common law has required governments to return any surplus from property taken to pay tax debts.
Again agreeing with the brief, the Supreme Court acknowledged the inconsistency of Minnesota law on the issue of excess proceeds. Banks in Minnesota are required by state law to return excess proceeds from a foreclosure sale to the home owner.
Minnesota law also protects the taxpayer’s right to surplus when collecting past due taxes on income or personal property. Yet, in the context of real estate taxes, Minnesota was pocketing the excess in real estate tax sales. This inconsistency was glaring to the unanimous Supreme Court.
Lastly, the Supreme Court rejected Hennepin County’s argument that Ms. Tyler had abandoned her property by failing to pay taxes, and therefore, had no right to the excess proceeds. The Supreme Court succinctly stated the county cannot “frame... [the failure to pay taxes] …as abandonment to avoid the demands of the Takings Clause.”
This win is not only important to Ms. Tyler but to property owners nationwide. No longer can localities seize windfalls on the excess proceeds from tax sales. This case also makes clear that states cannot circumvent traditional property rights via state law.
Latest from NAHBNow
Dec 16, 2025
AI Trends, Economic Outlook and More from 2025 Fall Leadership MeetingNAHB members who were unable to join us in Denver this November for the leadership meetings at the 2025 Fall Leadership Meeting can watch some of the highlights, including a keynote presentation on AI's impact on home building, an economic update from NAHB's chief economist and more.
Dec 15, 2025
Homeownership Rate Inches UpThe latest homeownership rate rose to 65.3% in the third quarter of 2025, according to the Census’s Housing Vacancy Survey (HVS). However, despite this quarterly increase, the trend continues to reflect significant affordability challenges.
Latest Economic News
Dec 16, 2025
Job Market Shows Signs of Cooling in NovemberIn November, job growth slowed, and the unemployment rate rose to 4.6%, its highest level in four years. At the same time, job gains for the previous two months (August and September) were revised downward. The November’s jobs report indicates a cooling labor market as the economy heads into the final month of the year.
Dec 15, 2025
Builder Sentiment Inches Higher but Ends the Year in Negative TerritoryBuilder confidence inched higher to end the year but still remains well into negative territory as builders continue to grapple with rising construction costs, tariff and economic uncertainty, and many potential buyers remaining on the sidelines due to affordability concerns.
Dec 11, 2025
Homeownership Rate Inches Up to 65.3%The latest homeownership rate rose to 65.3% in the third quarter of 2025, according to the Census’s Housing Vacancy Survey (HVS).