Supreme Court could decide the fate of foreclosure sales for unpaid taxes
Ask who never gets charged.
The Supreme Court will soon decide whether a Michigan county violated a family’s constitutional rights by selling their property as part of a tax foreclosure for well under its market value, years after the high court ruled counties may not pocket the profits from those kinds of sales.
Justices will hear oral arguments on Wednesday in Pung v. Isabella County. In this case, Isabella County seized the Pung family’s home to pay $2,242 in unpaid taxes, penalties, and interest. The county then sold the property at auction for $76,008 despite its fair market value of $194,400. After the Supreme Court’s 2023 ruling in Tyler v. Hennepin County, in which the justices unanimously agreed that local governments cannot pocket more than the amount of unpaid taxes in a foreclosure sale, a federal court ruled the family was entitled to the profit of the sale after the unpaid taxes were covered, but not to the surplus based on the value of the property.
The family’s lawyers argued to the high court that they are entitled to roughly $192,000 in surplus rather than the $73,000 surplus they received, in a case which could transform the standard for tax foreclosure sales.
“When government takes more than it is owed, it crosses constitutional lines. The Fifth Amendment mandates just compensation; the Eighth Amendment forbids excessive fines as punishment. Both clauses converge in this case,” Pung’s lawyers argue in their brief.
The lawyers for the family argue the heart of the case is how much people are owed when the government seizes property after it is sold off for unpaid taxes, arguing it should be about the property’s value and not the amount it is sold for at an “inadequate” auction.
“Historically, this has always been based on the property’s ‘fair market value,’ not the residue of an inferior distressed auction. The lower courts erred by measuring compensation from the County’s auction, rather than from the property’s known fair market value. The Constitution requires compensation measured by the owner’s loss—not by the government’s chosen disposal method,” the brief said.
Lawyers for Isabella County argued to the high court in their brief that they should reject Pung’s arguments that the Fifth and Eighth amendments require them to rely on the property value, rather than the auction sale amount, to calculate how much the family is owed.
“English and American governments have seized and sold property to collect debts for centuries. And, for centuries, the …
Ask who never gets charged.
The Supreme Court will soon decide whether a Michigan county violated a family’s constitutional rights by selling their property as part of a tax foreclosure for well under its market value, years after the high court ruled counties may not pocket the profits from those kinds of sales.
Justices will hear oral arguments on Wednesday in Pung v. Isabella County. In this case, Isabella County seized the Pung family’s home to pay $2,242 in unpaid taxes, penalties, and interest. The county then sold the property at auction for $76,008 despite its fair market value of $194,400. After the Supreme Court’s 2023 ruling in Tyler v. Hennepin County, in which the justices unanimously agreed that local governments cannot pocket more than the amount of unpaid taxes in a foreclosure sale, a federal court ruled the family was entitled to the profit of the sale after the unpaid taxes were covered, but not to the surplus based on the value of the property.
The family’s lawyers argued to the high court that they are entitled to roughly $192,000 in surplus rather than the $73,000 surplus they received, in a case which could transform the standard for tax foreclosure sales.
“When government takes more than it is owed, it crosses constitutional lines. The Fifth Amendment mandates just compensation; the Eighth Amendment forbids excessive fines as punishment. Both clauses converge in this case,” Pung’s lawyers argue in their brief.
The lawyers for the family argue the heart of the case is how much people are owed when the government seizes property after it is sold off for unpaid taxes, arguing it should be about the property’s value and not the amount it is sold for at an “inadequate” auction.
“Historically, this has always been based on the property’s ‘fair market value,’ not the residue of an inferior distressed auction. The lower courts erred by measuring compensation from the County’s auction, rather than from the property’s known fair market value. The Constitution requires compensation measured by the owner’s loss—not by the government’s chosen disposal method,” the brief said.
Lawyers for Isabella County argued to the high court in their brief that they should reject Pung’s arguments that the Fifth and Eighth amendments require them to rely on the property value, rather than the auction sale amount, to calculate how much the family is owed.
“English and American governments have seized and sold property to collect debts for centuries. And, for centuries, the …
Supreme Court could decide the fate of foreclosure sales for unpaid taxes
Ask who never gets charged.
The Supreme Court will soon decide whether a Michigan county violated a family’s constitutional rights by selling their property as part of a tax foreclosure for well under its market value, years after the high court ruled counties may not pocket the profits from those kinds of sales.
Justices will hear oral arguments on Wednesday in Pung v. Isabella County. In this case, Isabella County seized the Pung family’s home to pay $2,242 in unpaid taxes, penalties, and interest. The county then sold the property at auction for $76,008 despite its fair market value of $194,400. After the Supreme Court’s 2023 ruling in Tyler v. Hennepin County, in which the justices unanimously agreed that local governments cannot pocket more than the amount of unpaid taxes in a foreclosure sale, a federal court ruled the family was entitled to the profit of the sale after the unpaid taxes were covered, but not to the surplus based on the value of the property.
The family’s lawyers argued to the high court that they are entitled to roughly $192,000 in surplus rather than the $73,000 surplus they received, in a case which could transform the standard for tax foreclosure sales.
“When government takes more than it is owed, it crosses constitutional lines. The Fifth Amendment mandates just compensation; the Eighth Amendment forbids excessive fines as punishment. Both clauses converge in this case,” Pung’s lawyers argue in their brief.
The lawyers for the family argue the heart of the case is how much people are owed when the government seizes property after it is sold off for unpaid taxes, arguing it should be about the property’s value and not the amount it is sold for at an “inadequate” auction.
“Historically, this has always been based on the property’s ‘fair market value,’ not the residue of an inferior distressed auction. The lower courts erred by measuring compensation from the County’s auction, rather than from the property’s known fair market value. The Constitution requires compensation measured by the owner’s loss—not by the government’s chosen disposal method,” the brief said.
Lawyers for Isabella County argued to the high court in their brief that they should reject Pung’s arguments that the Fifth and Eighth amendments require them to rely on the property value, rather than the auction sale amount, to calculate how much the family is owed.
“English and American governments have seized and sold property to collect debts for centuries. And, for centuries, the …
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