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Editorial
A major win for struggling homeowners in Nebraska
Tuesday, September 17, 2024
The U.S. Supreme Court’s 2023 decision in Tyler v. Hennepin marks a pivotal moment in protecting the rights of Nebraska homeowners—and those across the country—who have been unjustly stripped of their home equity through property tax foreclosures. This ruling is a victory not only for individual homeowners but also for the principles of fairness and justice in property rights.
Between 2014 and 2021, over 300 Nebraskans lost their homes due to unpaid property taxes, forfeiting an estimated $17 million in home equity. For many of these homeowners, the loss of their property wasn’t just a matter of delinquent taxes, but a catastrophic blow to their financial security. Home equity, which can take years or decades to build, often represents a person’s most significant asset and can be a lifeline in retirement or in times of need.
The U.S. Supreme Court’s decision was clear: homeowners deserve “just compensation” for the equity in their homes when properties are sold for unpaid taxes. In the case of two Nebraska homeowners, Legal Aid of Nebraska, alongside the Pacific Legal Foundation, fought tirelessly to reverse an earlier Nebraska State Supreme Court ruling that denied them the right to retain their home equity. The Tyler ruling forced the state court to reconsider, ultimately ensuring that these homeowners, and others in similar situations, will now be compensated for the value they lost.
The court’s ruling shines a light on an important, yet often overlooked, issue that disproportionately affects the elderly, low-income individuals, and those facing medical hardships. These are the people most vulnerable to falling behind on property taxes, and who stand to lose everything without protections like those affirmed by the Supreme Court. For homeowners in Nebraska, particularly those struggling to keep up with taxes, the ruling offers a measure of security. While they may still face the loss of their homes, they will not be forced into financial ruin—at least they will receive the surplus equity after their debts are paid.
Importantly, this decision offers hope to homeowners nationwide. Those who have lost their homes in similar circumstances, even prior to the ruling, may be entitled to retroactive compensation, depending on their state’s statute of limitations. The decision underscores a broader principle: that the government, or private investors, should not be allowed to profit at the expense of struggling homeowners.
For Nebraska, this case also highlights the critical role of organizations like Legal Aid of Nebraska, which continues to be a vital advocate for vulnerable communities. Legal Aid’s success in bringing this issue before the nation’s highest court sets an important precedent and signals to homeowners across the state that their rights matter and that they have recourse when those rights are violated.
This victory is also a testament to the power of legislative reform. In 2023, Nebraska law was changed to require that homeowners receive any surplus equity in property tax foreclosures, a move that brings state policy in line with the Supreme Court’s ruling. This legal safeguard should provide further protection for Nebraskans in the years to come.
The fight is not over. Many homeowners still need to be made aware of their rights, and more action is needed to ensure that no one else suffers the devastating loss of their home and equity due to unpaid taxes. But the Tyler v. Hennepin decision is a crucial step forward, helping to safeguard the property rights of Nebraskans and providing a path for justice for those affected by this unjust practice.