Independent · not a recovery company Public-record guide · Updated 2026-06-06

Tyler v. Hennepin County: The End of Home-Equity Theft

The Foreclosure Surplus Project Updated June 6, 2026 Cited sources
Steps of a courthouse, representing the Supreme Court ruling in Tyler v. Hennepin County
Direct answer In Tyler v. Hennepin County, 598 U.S. 631 (2023), the U.S. Supreme Court ruled unanimously that a government may not keep the surplus when it sells a home for unpaid property taxes. Taking more than the tax debt is an unconstitutional “taking” under the Fifth Amendment. The decision ended “home-equity theft” for tax sales and pushed many states to give owners a way to claim their surplus.

For anyone who lost a home over unpaid property taxes, one 2023 case changed everything. Here’s what happened and why it matters for your claim.

The facts

Geraldine Tyler, a 94-year-old Minneapolis woman, owed about $15,000 in property taxes, penalties, and interest. Hennepin County, Minnesota, seized her condo and sold it for about $40,000 — then kept the entire amount, including roughly $25,000 above what she owed. Under Minnesota law at the time, that was allowed.

What the Supreme Court decided

The Court ruled 9–0 in Tyler’s favor. Chief Justice Roberts wrote that while the government can collect the taxes it’s owed, it “may not extinguish a property interest that it has not paid for” — keeping the surplus is a taking of private property without just compensation, violating the Fifth Amendment’s Takings Clause.

The taxpayer must render unto Caesar what is Caesar’s, but no more.

What “home-equity theft” means

Before Tyler, about a dozen states let governments (or the investors who bought tax liens) keep the full value of a tax-foreclosed property — equity and all. Advocates called this home-equity theft: a homeowner could lose a $250,000 house over a few thousand dollars in taxes and receive nothing back. Tyler made clear that’s unconstitutional.

What it means for you

  • If you lost a home to a tax sale, the surplus above your tax debt belongs to you — you have a right to claim the excess proceeds.
  • States have updated their laws. Many have added or clarified a claim process and deadlines for tax-sale surplus since 2023.
  • Deadlines still apply. The right to the surplus doesn’t mean it’s automatic — you must file a claim, often within a set window. Check your state in the finder.

Tyler is about tax foreclosures. If you lost a home to a mortgage foreclosure, the surplus was already yours under longstanding law — see what surplus funds are.

Next steps

Whether your loss was over taxes or a mortgage, the path is the same: confirm the surplus, find who holds it, and file before your deadline. Start with the step-by-step claim guide, and read tax-sale overage for the tax-specific process.

Common questions

What did Tyler v. Hennepin County decide?
In 2023 the U.S. Supreme Court ruled unanimously that when a government takes a home for unpaid property taxes and sells it, it cannot keep the surplus above the tax debt. Keeping that surplus is an unconstitutional taking under the Fifth Amendment.
What is home-equity theft?
“Home-equity theft” describes the practice, once legal in some states, of a government or investor keeping the entire value of a tax-foreclosed property — including equity far beyond the unpaid taxes — instead of returning the surplus to the owner.
Can the government keep the surplus from a tax sale?
No. After Tyler, a government may collect the taxes, penalties, interest, and costs it’s owed, but the surplus belongs to the former owner. Many states changed their laws to provide a claim process for that surplus.
Does Tyler v. Hennepin apply to mortgage foreclosure?
Tyler was a property-tax case, so it directly addresses tax foreclosures. Mortgage-foreclosure surplus was already the former owner’s property under longstanding law. Either way, the surplus is yours to claim.

Keep reading

Tax-sale overage explainedHow to claim your surplusDeadlines by stateSources

This article is general information, not legal or financial advice. Foreclosure surplus and tax-sale overage laws, deadlines, and procedures vary by state and county and change over time. Always confirm the current rules with your county clerk, trustee, or treasurer, your state’s unclaimed-property office, or a licensed attorney before acting. Sources are listed on our sources page.