The town grabs, then sells property for failure to pay property taxes. The sales price is more than the tax lien. Does the town have an obligation to give the owner the difference, or can it keep it unless the owner sues?
Thanks to a colleague who sent us the case, we know that was the issue facing the New Hampshire Supreme Court in Polonsky v. Town of Bedford, No. 2019-0339 (Apr. 24, 2020). Short story: yes, the town needs to affirmatively give the extra money back, and no, the town can't keep it unless and until the owner sues to get it. To read the statutory scheme otherwise would result in an unconstitutional taking.
Check it out (quick read, only 13 pages).
A couple of notes:
- The owner asserted his rights under part I, article 12 of the New Hampshire Constitution ("no part of a man’s property shall be taken from him, or applied to public uses, without his own consent, or that of the representative body of the people").
- This is a case interpreting a statute, not a "pure" constitutional claim for just compensation.
- The court recognized that the takings clause isn't so much an owner's right to go get compensation, as it is about the government's obligation "to provide compensation[.]" Slip op. at 11 ("The takings clause, however, does not require a former owner to take any action to receive that compensation, and the Town points to no other constitutional provision that imposes such a requirement. Thus, there is no constitutional mandate for the remedy the Town seeks."). A critical difference.
The court affirmed the trial court's equitable order compelling the town to give the former owner the excess, rejecting the town's argument that the owner had "unclean hands" because of his delay in seeking to redeem the tax lien.
More on the decision here ("Supreme Court rules that towns can't profit off sales of tax-deeded properties").
Polonsky v. Town of Bedford, No. 2019-0339 (N.H. Apr. 24, 2020)
