FOR IMMEDIATE RELEASE
Chief of Legal Strategy
Phone: 402-348-1069 ext. 204
U.S. Supreme Court finds home equity theft unconstitutional impacting two Nebraska Supreme Court Decisions
Washington, D.C. – Today the United States Supreme Court has vacated two decisions of the Nebraska Supreme Court which upheld Nebraska’s tax sale process. Both cases have been sent back to the Nebraska Supreme Court for reconsideration in light of the recent decision in Tyler v. Hennepin County. In Tyler, all nine justices of the U.S. Supreme Court unanimously agreed that home equity theft violates the Takings Clause of the United States Constitution.
Currently, Nebraska’s tax sale process allows counties to seize the entire value of a home as payment for a much smaller property tax debt. Legal Aid of Nebraska represented two different homeowners in state court in their challenges to the constitutionality of this process and, ultimately, took each case to the Nebraska Supreme Court.
The first case involves an elderly couple, Kevin and Terry Fair, who have lived in their Scottsbluff home for nearly three decades. After Terry Fair, who sadly passed away during the case, was diagnosed with Multiple Sclerosis and could no longer work at Walmart, and Kevin Fair stopped working to take care of her, the couple was left with a limited income. When the Fairs fell behind on their property taxes, the county transferred the couple’s $60,000 home to a private investor. The investor paid off the Fairs’ $5,268.00 debt to the county, and would pocket the surplus equity as profit.
The second case involves Sandra Nieveen, an elderly woman who lived in her Lincoln home for nearly fifty years when the county transferred her $61,900 home to a private investor for a tax debt of less than $4,000. In both cases, the Nebraska Supreme Court upheld the laws, but issued orders staying its decisions pending the outcome in the U.S. Supreme Court. This allowed both Fair and Nieveen to stay in their homes until the cases are decided.
“We believe the US Supreme Court’s decision in Tyler means that Nebraska’s tax sale process is unconstitutional,” said Jennifer Gaughan, Legal Aid’s Chief of Legal Strategy “It has taken a long time to get to this point – Mr. Fair’s case has been going on for nearly five years, and Ms. Nieveen’s for over four years. We look forward to resolving these cases and seeing justice served for our clients who have lived for years under the stress of not only the threat of homelessness but also the loss of equity in their property without any compensation–stripped of their only asset and left with nothing to be able to get another place to live.”
Pacific Legal Foundation, which works to end home equity theft in the states where it is still practiced, represented Mr. Fair and Ms. Nieveen in the U.S. Supreme Court free of charge, with Legal Aid of Nebraska remaining local counsel.
“The U.S. Supreme Court’s decision was a major victory for protecting the property rights of homeowners across the country,” said Christina Martin, senior attorney at Pacific Legal Foundation. “The 21 states that practice some form of home equity theft are now on notice that they are violating the Constitution.”
Mark Bestul, one of Legal Aid of Nebraska’s attorneys for Mr. Fair and Ms. Nieveen said, “Legal Aid of Nebraska’s mission is to promote justice, dignity, hope, and self-sufficiency through quality civil legal aid for those who have nowhere else to turn. This current process does more than just recover property taxes. It strips low-income homeowners, like Mr. Fair and Ms. Nieveen, of what little wealth they have acquired, and pushes them farther into poverty. Without the dedication, drive, and expertise of Legal Aid of Nebraska’s staff and attorneys, both Mr. Fair and Ms. Nieveen would have lost their homes years ago.”
Laurie Heer Dale, Executive Director for Legal Aid of Nebraska, said, “These cases illustrate the important work Legal Aid does across the state. This is our 60th year of protecting legal rights and promoting justice for low-income Nebraskan’s. Our legal team is committed to combatting unconscionable laws that disproportionately impact vulnerable Nebraskans. We demand and will stop at nothing less than fairness in our justice system.”
Recognizing the urgency of this issue, the Nebraska Legislature addressed the matter during the current session and determined that the process should be amended. It is expected that the Governor will sign a law that ensures homeowners receive compensation for any equity in their property and are provided notice of any tax delinquency, as well as the right to redeem the property early in the process.
About Legal Aid of Nebraska:
Legal Aid of Nebraska was established in 1963 and is the largest statewide non-profit civil legal aid provider in Nebraska, providing free high-quality services to low-income Nebraskans in all 93 counties. Legal Aid’s mission is, “to promote justice, dignity, hope and self-sufficiency through quality civil legal aid for those who have nowhere else to turn.” Legal Aid has offices in Lincoln, Omaha, North Platte, Norfolk, Grand Island, Scottsbluff and Bancroft.