By Kathryn Hickok
With the passage of House Bill 2089 in late June, Oregon has ended the practice of “home equity theft,” by bringing state law into compliance with the Supreme Court’s unanimous 2023 Tyler ruling. Two years ago, the U.S. Supreme Court ruled in favor of a Minnesota grandmother, Geraldine Tyler, who lost her condo when she failed to pay the property taxes. Ms. Tyler argued that her county violated the Constitution’s Takings Clause when it kept a $25,000 surplus after her property was foreclosed and sold to pay the taxes.
Oregon has been one of nine states whose tax foreclosure laws allowed such “home equity theft.” The key requirement of the unanimous ruling in Tyler v. Hennepin County says governments must create a system to return surplus equity to owners after property taxes, fees, and interest are paid on foreclosed property. After the Tyler decision, it became clear Oregon’s law needed revision.
Cascade Policy Institute worked with Pacific Legal Foundation (who represented Ms. Tyler) and other stakeholders to bring Oregon law into compliance with Tyler. House Bill 2089provides a process to ensure that counties retain what they are owed in back taxes, and no more, giving the original owner claim to any surplus value.
The Tyler ruling was a big victory for property rights, effectively ending the practice of government “home equity theft” by ruling it unconstitutional. HB 2089 ends home equity theft in Oregon, too.
Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization, and Director of the Children’s Scholarship Fund-Oregon program at Cascade.
