Tyler v. Hennepin County
The Unanimous Ruling That Changed Tax Sales
In 2023, the Supreme Court ruled 9-0 that counties cannot keep surplus equity after tax sales. But the opinion left open a critical question that Pung v. Isabella County (2026) will answer.
Geraldine Tyler's Story
Geraldine Tyler, 93 years old
Owned a one-bedroom condo in Hennepin County, Minnesota. Fell behind on property taxes after moving to a senior community.
The Taking
Hennepin County kept the entire $25,000 surplus under Minnesota law. Geraldine Tyler received nothing beyond the statutory redemption period. She sued, arguing this violated the Fifth Amendment Takings Clause.
Supreme Court Ruling
Unanimous SCOTUS ruling (9-0) authored by Chief Justice Roberts. Counties must return surplus equity above the tax debt. Keeping the $25,000 was an unconstitutional "taking" requiring just compensation under the Fifth Amendment.
The Impact Timeline
Key Quote from the Opinion
The taxpayer must render unto Caesar what is Caesar's, but no more. A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed. The Takings Clause "was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."
Mid-Atlantic States: Tyler Compliance Status
| State | Sale Type | Tyler Status | Notes |
|---|---|---|---|
| Washington, DC | Tax Lien | Affected | 18% statutory rate. Surplus rules under review post-Tyler. |
| Maryland | Tax Lien | Affected | 6-20% by county. County-level surplus practices vary. |
| Virginia | Tax Deed (judicial) | Affected | Judicial sale process. Surplus distribution rules apply. |
| Delaware | Sheriff's Sale | Affected | 9.3% delinquency rate. Surplus treatment post-Tyler unclear. |
| Pennsylvania | Upset/Judicial Sale | Affected | Two-phase sale process. Upset sales first, then judicial. |
Compliance status reflects ArrearIQ's assessment as of February 2026 and does not constitute legal advice. Consult counsel for jurisdiction-specific guidance.
The Question Tyler Left Open
How do we calculate "fair market value"?
Tyler established that surplus equity must be returned. But the opinion didn't specify whether "fair market value" is the auction price or an independent appraisal. This critical question will be answered in Pung v. Isabella County (oral arguments February 25, 2026).
See What's at Stake in the Next RulingWhat This Means for Investors
Post-Tyler, every tax sale has potential surplus exposure. ArrearIQ provides the FMV intelligence you need to assess risk before you bid.
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