There are other pending “equity theft” cases in the state and at least one in a federal court in Massachusetts, according to Frank J. Bailey, of Pioneer Public Interest Law Center.
The decision in Mills’s case, as welcome as it is, does not set a statewide precedent that is binding on other courts hearing similar cases, Bailey said. But a decision by the state Supreme Judicial Court, if a case goes before that court, would be binding, he said.
“Our hope is for an eventual SJC ruling that Chapter 60 is unconstitutional,” he said. “That would completely do away with equity theft in Massachusetts.”
An alternative to a SJC ruling would be an enactment by the state Legislature that explicitly prohibits equity takings, he said.
The ruling was a major victory for Mills’ legal team, who have been fighting across the Commonwealth for elderly and low-income residents who lost their homes after falling behind on their taxes.
“I was ecstatic,” retired Judge Frank Bailey said of the ruling. Bailey now heads the Pioneer Public Interest Law Center. “Municipalities are on message now. They’re on notice that what they’re doing is unconstitutional,” he added.
Judge finds ‘equity theft’ law unconstitutional, pressuring change (wcvb.com)
From Superior Court Judge Michael Callan:
The parties agree that Tyler v. Hennepin County, Minnesota holds that where the value of a delinquent taxpayer’s property exceeds the amount owed in taxes, interest, and fees, a statutory scheme that does not provide a procedure for the delinquent taxpayer to claim and receive the amount exceeding the amount owed violates the Fifth Amendment. See Tyler, 598 U.S. at 644-645. Cf. Nelson New York, 352 U.S. 103, 109 (1956) (holding that “City’s retention of property, in one instance, and proceeds of sale in the other, far exceeding in value the amounts due❞ did not violate takings clause of Fifth Amendment where procedure existed for homeowner to obtain surplus).
“[u]nlike in Nelson, Minnesota’s scheme provides no opportunity for the taxpayer to recover the excess value; once absolute title has transferred to the State, any excess value always remains with the State.” Tyler, 598 U.S. at 644.
The parties and this Court agree that Tyler stands for the proposition that a tax foreclosure statutory scheme that does not provide a procedure whereby a landowner may recover the value of the property in excess of the amount owed violates the takings clause of the Fifth Amendment.
Because G.L. c. 60 does not provide a procedure whereby a delinquent landowner may recover the value of his or her land above the amount owed, the retention of owners’ surplus equity when real property is taken pursuant to G.L. c. 60 to satisfy debts to municipalities violates the takings clause of art. 10 of the Massachusetts Declaration of Rights and the Fifth Amendment to the United States Constitution. The statutory scheme is not facially unconstitutional because, of course, there are circumstances where the tax debt (including interest) exceeds or equals the value of the property. It is, however, unconstitutional as applied in circumstances, such as here, where the tax debt is less than the value of the property. The statutory scheme, in its present form, is untenable and requires Legislative correction.
Accordingly, the parties are ORDERED to file with this Court respective proposed forms of Judgment in conformity with this Decision on or before April 26, 2024.
