In Arizona, citizens can still lose their houses over minuscule tax bills, despite a unanimous 2023 Supreme Court ruling that was supposed to paralyze the practice nationwide.
A disturbing chasm is growing between the letter of the law and the spirit of justice. Christine Searle, a 70-year-old retiree, faces the loss of her home—valued at hundreds of thousands of dollars—over a mere $1,607.68 in back taxes. Sadly, her story is not uncommon in Arizona.
For nearly two decades, Searle's home in Gilbert, Arizona, has been more than walls and a roof—it has been a haven of happy memories. But because she owed taxes to Maricopa County, a tax lien was placed on her home a few years ago. Arizona law then allowed the company that purchased the lien to foreclose on her home, meaning Searle lost her home and all its equity. The notion that a home can be auctioned off and ultimately acquired for a fraction of its value over a minor tax dispute is terrifying.
The government appraised her home at $376,800.
Arizona is not the only state that has permitted local governments to transfer tax liens, along with the accompanying power to foreclose on the property, to private entities. In Nebraska, for example, private investors have been known to buy out tax debt without formal correspondence with the homeowner. Once notified, those unable to satisfy their debt in full—plus interest and fees—have watched as the county treasurer gave the deed to their property away to the investor, effectively evicting them and robbing them of any equity in surplus of their debt.
The situation brings us face to face with the victims of complicated law. Searle's plight is a stark example of everyday people who are often ill-equipped to navigate the complexities of tax law and real estate regulations. And the consequences for an ill-informed action can be life altering. The issue here is not some clerical error—it is the framework of state law.
Thankfully, in 2023, the Supreme Court issued a unanimous ruling in Tyler v. Hennepin County, vindicating a woman similarly-situated to Searle and sending a message to governments that the status quo was no longer tolerable under the Constitution. In 2010, Geraldine Tyler, who was then in her early 80s, moved out of her Minneapolis condo after some disconcerting neighborhood incidents left her wanting more security. But she was not able to afford both her rent at a retirement home and her property taxes on the condo, accruing a $2,300 tax debt with an additional $13,000 tacked on in penalties, interest, and fees.
Tyler did not dispute that she owed the government that money. What she did dispute was that public officials could seize her condo, sell it for $40,000, and keep the $25,000 in excess of what she owed them.
The Supreme Court agreed with her. Despite the fractious divisions among the justices these days, they reached a consensus in Tyler that the government cannot sell a person's home to satisfy a tax debt and then pocket the surplus from the sale. This seemingly common-sense holding underscores a fundamental principle in our country—the law must serve justice, not facilitate a financial windfall.
"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," wrote Chief Justice John Roberts. "The taxpayer must render unto Caesar what is Caesar's, but no more."
In Arizona, Tyler hasn't yet reverberated. But the only real "distinction" between the scheme that was invalidated in Tyler and Arizona law is who reaps the windfall: In Tyler, it was the government. In Arizona, it's the purchaser of the tax lien. But that's hardly a meaningful legal difference. One would think that the attorney general, or the Maricopa County treasurer, would step in and announce that state law can no longer stand up to scrutiny. Indeed, Colorado's Attorney General made such an announcement last year regarding Colorado law after Tyler was issued.
And while the Arizona legislature, to its credit, is considering amending the law, that won't do much to help Searle, who is already suffering. So, my firm, Mountain States Legal Foundation, has stepped up to represent Searle. We're suing in federal court because we believe that the law should be the first line of defense for homeowners, not a weapon that takes away their property. As Roberts wrote in Tyler, the taxpayer must render under Caesar only what is truly owed to Caesar—not more.
The value of a home extends beyond its market price—it is immeasurable in the comfort, security, and belonging it provides. For Searle, and for countless others in her position, the true cost of Arizona's law is incalculable. Her fight should be a catalyst for change. While the legislature figures out how to fix this problem, Searle's fight will continue in the courtroom, where she seeks the justice that every homeowner deserves.
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