Class-action settlement impacts tax-forfeited properties in Marshall
A group of lawyers in Minnesota have announced that former homeowners who lost their properties due to unpaid property taxes may have the opportunity to claim compensation. This development follows a significant legal case that reached the U.S. Supreme Court in 2023, involving a Minnesota woman whose home was sold for more than the amount she owed in taxes.
As a result of the case and subsequent court ruling, a $109 million class-action settlement has been approved by a Minnesota judge. This settlement allows former homeowners in rural Minnesota to seek compensation if their properties were forfeited between June 23, 2016, and December 31, 2023.
“We’re very satisfied with the settlement, and we encourage all eligible members of the class to submit their claims,” stated attorney Vildan Teske, who represents the plaintiffs in the lawsuit. The Supreme Court decision in 2023 found that Hennepin County violated the constitutional rights of a Minneapolis woman by selling her condo for an amount exceeding her tax debt and then retaining the surplus.
The implications of the ruling and the resulting settlement are significant, according to Teske. Additionally, as part of a new state law, county auditors are now mandated to notify former homeowners in case a surplus exists from the sale of tax-forfeited properties. The deadline for former homeowners to file a claim for the class-action settlement is June 6.
While Lyon County has not been involved in legal proceedings related to tax-forfeited properties, county Auditor/Treasurer Aurora Heard provided information on the county’s tax-forfeiture and property sale history. Over the past decade, Lyon County has sold 33 tax-forfeited properties, with total revenue from sales amounting to $98,100 against outstanding taxes, penalties, interest, and costs of $122,320.
Heard clarified that the surplus amounts related to the Supreme Court ruling differ from the total sale proceeds realized by the county and outlined the presumptive surplus calculations for Lyon County properties during the specified period. Currently, Lyon County has 24 tax-forfeited properties available for public sale, with the majority located in Tracy.
Under the new Minnesota law governing the sale of tax-forfeited land, Lyon County is obligated to follow a specific process for selling forfeited properties between June 23, 2016, and December 31, 2023. This process involves conducting auctions for the properties and remitting a percentage of the sale proceeds back to the Minnesota Management and Budget agency based on the sale date.
Minnesotans who lost property due to unpaid property taxes within the specified timeframe may be eligible to participate in the class-action settlement. Claimants could potentially receive up to 90% of the surplus value of their forfeited property, along with accrued interest. There is no cost associated with filing a claim, and claim forms must be submitted by June 6, 2025.