Because the Nebraska State Legislature failed to pass any kind of meaningful and significant property tax relief during the special session, and because Nebraska now ranks as the second worst state in the nation for mortgage delinquencies, today I would like to inform the public about a significant development in the courts which now affects those with delinquent property tax liens.

According to Nebraska State Statute 77-1801, the properties of those with delinquent property tax bills can be sold or auctioned off to the highest bidder every year on the first Monday in March after the taxes become delinquent. Once the properties are sold and the back taxes are paid, the new owner of the property gets to keep the remainder of the equity in the home. Some have called this home equity theft and it has become a nightmare scenario for many elderly residents, the sick, and those who lose a job.

Such was the case for Kevin L. Fair of Scotts Bluff County. When Kevin’s wife, Sandra Nieveen, was diagnosed with multiple sclerosis, her condition required round-the-clock care. The Fairs couldn’t afford to hire anyone, so Kevin chose to quit his job and become his wife’s primary caregiver. The couple now had to live solely off of their Social Security checks. However, when their property tax statement came in, Kevin could not find a way to pay the $588 he owed to the County of Scotts Bluff.

In 2015 Continental Resources purchased the Fair’s tax debt and satisfied the tax debt to the county. Then, in 2018 the company sent Kevin a bill totaling $5,268 in overdue taxes, penalties, interest, and fees along with a notice to settle the debt within 90 days, otherwise, their $60,000 house would be sold to pay the debt. Naturally, Kevin couldn’t pay such an exorbitant amount of money, so he took it to court, where he lost in both the state court and in the Nebraska Supreme Court in 2022.

A similar situation had happened to Geraldine Tyler, who lived in Hennepin County, Minnesota. After her tax debt was sold, the tab on her original $2,300 tax statement ballooned to $15,000 after adding penalties, interest, and fees. However, when she sued Hennepin County, her case went all the way up to the U.S. Supreme Court, who ruled in her favor last year.

The U.S. Supreme Court ruled that the Takings Clause of the Fifth Amendment applies to these kinds of cases. Specifically, the Takings Clause of the Fifth Amendment states that “private property [shall not] be taken for public use, without just compensation.” The nation’s highest court ruled that Hennepin County “could not use the toehold of the tax debt to confiscate more property than was due.” Commenting on the case, Chief Justice, John Roberts said, “The taxpayer must render unto Caesar what is Caesar’s, but no more.” This decision is good news for homeowners who are struggling to pay their property taxes.

The U.S. Supreme Court directed those states with similar cases to revisit them. So, the Nebraska Supreme Court had to revisit and reverse their decision in the case of Continental Resources v. Kevin L. Fair. This time the Nebraska Supreme Court decided that Kevin Fair was entitled to the excess equity in his home; otherwise, the decision would constitute a violation of the Takings Clause of the Fifth Amendment.

I share this information with you today because I expect the property tax situation in Nebraska to grow much worse before it ever gets any better. Nebraskans need to know how to protect themselves against home equity theft, especially when the government allows it. No one ever has the right to take the excess equity that you have put into your home.