Nebraska Supreme Court rejects challenge to law that lets investors take property over unpaid taxes - Lincoln Journal Star
The Nebraska Supreme Court rejected an argument challenging the constitutionality of a state law that allows third parties to acquire properties by paying off the owner's tax debts.
Friday's decision in Continental Resources v. Fair brings an end to a yearslong fight by a Scottsbluff man to keep his home of 27 years. Kevin Fair, who argued that Nebraska's tax lien sale process is unconstitutional, will lose his house as a result of the decision.
Fair and his wife Terry, who died in 2019 during the ensuing legal battle, lived in a modest home valued at just less than $60,000, according to court documents. They owned the home outright.
In 2014, the Fairs failed to pay their property taxes to Scotts Bluff County.
When property taxes go unpaid, the county takes out a lien — a legal claim — on the property, which makes it unable to be sold or refinanced until the debts are paid. These liens are advertised in a local newspaper and sold to third parties.
Once a third party purchases the lien and pays the homeowner's debt, they begin paying taxes on the property. After three years of paying taxes, the third party can then apply for a tax deed. They also must notify the owner of their intent to obtain a tax deed so that the owner has the opportunity to pay the debt and keep the property.
The lien on the Fairs' home was advertised in an area newspaper in February 2015. A company called Continental Resources purchased the tax lien for $588 and started paying the property taxes on the Fairs' home, according to court documents. As a result, the county stopped sending the couple further tax bills and communications.
During that time, the Fairs never made a payment on their delinquent property taxes.
In April 2018, three years after Continental began paying taxes on the property, the Fairs were informed that they had three months to pay $5,268 if they wanted to keep their home. The pair originally owed only $588 in property taxes, a number that ballooned because of additional unpaid taxes, legal fees and a 14% annual interest rate.
The Fairs could not afford to pay the bill. In 2019, an attorney for the couple told the Omaha World-Herald that they had tried and failed to obtain a bank loan to pay off the lien and keep the house. Terry was diagnosed with multiple sclerosis and lost her job, and Kevin had taken an early retirement to become her caretaker.
After receiving no payment by July 2018, Continental applied for and received the tax deed for the Fairs' home.
A legal battle ensued. Legal Aid of Nebraska, a nonprofit providing civil legal help to low-income Nebraskans, provided legal representation to the Fairs, who alleged the entire process had violated their constitutional rights.
A district court judge ruled in favor of Continental, and the Fairs appealed. Because they challenged the constitutionality of the state's laws that allow for tax lien sales, the Nebraska Supreme Court added the case to its docket.
In September 2021, the court heard oral arguments in the case. Attorneys for Fair and his late wife argued that the tax certificate sale violated multiple rights guaranteed under both the U.S. Constitution and the Nebraska Constitution, including the right to due process and protection from excessive fines.
In part, Fair argued that his right to due process was violated because he was not made aware that the tax certificate was sold in 2015, and because the three-month notice to reclaim the home was insufficient.
The court disagreed with both of those arguments, writing that Fair "overstates the significance that the sale of the tax certificate has" and that he was given ample time to reclaim the property.
In the ruling issued Friday, the Supreme Court affirmed the lower court decision to award the tax deed to Continental. According to Legal Aid, Fair's attorneys are reviewing the decision and determining next steps, including potentially seeking review by the U.S. Supreme Court.
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source: https://journalstar.com/news/state-and-regional/crime-and-courts/nebraska-supreme-court-rejects-challenge-to-law-that-lets-investors-take-property-over-unpaid-taxes/article_8f587040-88d4-5231-809d-85c8f6f8b724.html
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