Scottsbluff, NE — $588.21. That’s all it took for Kevin and Terry Fair to possibly lose their home of over twenty years. The elderly Scottsbluff couple couldn’t afford the $588.21 in back property taxes because Terry’s ongoing medical condition had caused her to lose her job, leaving the elderly Scottsbluff couple with only a single income to make ends meet.
The inability to pay the $588.21 means the Fairs now have to fight to keep their home after a financial investor was able to put down about $6,000 to buy out the “right” to the back taxes and the house, leaving the Fairs without their home and the nearly $50,000 of equity that came with it. Legal Aid of Nebraska is working to keep this tax sale from going forward.
On behalf of the Fairs, attorneys with Legal Aid have filed in court to stop the transfer of the home to the private party, and challenging the constitutionality of the county tax sale process that would result in the Fairs not only losing their home, but allows the county to strip the Fairs of all the equity in their property and transfer it to an investor for pennies on the dollar.
Under Nebraska law, counties can sell property tax liens to private parties when homeowners fall behind on their real estate taxes. Regardless of how much equity a property owner has in his or her property — or how small the amount the owner owes a county — state law provides that the county can take and transfer the property and all of the equity in it to a private purchaser. By paying the tax lien and any subsequent taxes, these private parties can take ownership of the property after three years.
Without the intervention of Legal Aid, the Fairs would lose the entire $50,000 equity to the private third party, if allowed to gain the deed on the Fair’s home.
“People need to pay their taxes, but we believe the process allowing the county to take the property of one person and transfer it to someone else that stands to make a substantial profit, is unjust,” said Mike Meister, managing attorney of Legal Aid’s Scottsbluff office and lead counsel for the Fairs. “The Fairs simply want to keep their home, work hard to catch up with their taxes, and keep what little wealth they have in their property. That’s not too much to ask, and we believe it’s both wrong and unconstitutional to let the county and investor seize over $50,000 in equity — ten times what is now owed in taxes — and kick the Fairs out in the process.”
Legal Aid is challenging the right of Continental Resources to obtain “quiet title” to the Fair’s home (and the ability to then sell the house) on several constitutional grounds, including that Nebraska’s tax sale process is an unlawful taking of the Fair’s property and violates their rights to due process, just compensation, and the right against excessive punishment and fines guaranteed by the Nebraska and United States Constitutions. In addition, the Fairs have asserted a claim arguing that the process unfairly impacts them and other homeowners who are elderly, infirm or poor, in their right to own and possess property as guaranteed by the Nebraska Constitution.
The suit filed in the District Court of Scotts Bluff County indicates that Continental Resources paid taxes in the amount of $588.21 on the home of Kevin and Terry Fair in March 2015. It wasn’t until three years later that the Fairs received their first notice that someone else had paid their taxes, and were poised to take away ownership in their house. By then, the unpaid tax amount was too great for them to make up as Kevin had taken early retirement to stay home and take care of his ailing wife.
“This suit illustrates what we see happening across the state, with low-income and elderly homeowners most impacted,” said Jennifer Gaughan, Legal Aid’s legal director and the Fairs’ co-counsel, based in Omaha. “The Fairs are simply standing up to demand respect of their basic constitutional rights, a problem they share with so many other low-income homeowners across Nebraska.”
A copy of the Answer, CounterClaim, and Third-Party Complaint can be found here