A woman who lost her Minneapolis condo is suing the Minnesota Department of Revenue, saying the agency owes her at least $25,000 after it sold her property for unpaid taxes.
A lawsuit filed Friday in Ramsey County District Court accuses the agency of breaking state and federal laws by keeping leftover cash — often homeowner equity — from property sales after being made whole on unpaid taxes and fines.
The state can seize property when there are unpaid taxes or other fines owed to the government.
While property sales typically help pay off overdue taxes and fines, the Department of Revenue should give the property owners any surplus, according to the complaint. The lawsuit also asserts that the state has no process for people to get the excess dollars, allowing the agency to essentially profit from the sale.
The plaintiff for the case is Geraldine Tyler, 90, who lost her condo in Minneapolis after she moved to an apartment and did not pay taxes on her previous home, according to the complaint. By the time Hennepin County officials seized the property in 2015, Tyler had racked up $15,000 in unpaid taxes and fees. Her property sold for $40,000, but she has not received any of the proceeds.
Through her lawyer, Tyler declined to comment Friday. The Department of Revenue also declined to comment.
Lawyers will be seeking to make it a class-action lawsuit.
The process is “an un-Minnesotan way of treating people,” said Garrett Blanchfield, a partner with Reinhardt Wendorf & Blanchfield and one of the attorneys on the case. He said it’s unclear how many people would fall under the class action because they are hard to locate.
Lawyers on the case say they don’t always know what happened to potential victims, but the discovery process will help find how many people are affected.
“The people that are most affected by this are going to be the elderly, poor people or people who have fallen on hard times and they’re trying to prioritize what bills they’re going to pay,” Blanchfield said. “I don’t think most people realize if you fall behind on real estate taxes, you’ll lose your property.”