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Attorney General Opines that the Tax Lien Foreclosure Law is Unconstitutional

Updated: Nov 7, 2023

Our last newsletter reported on the U.S. Supreme Court’s decision in Tyler v. Hennepin County, 598 U.S. 631 (2023), in which the Court held that the retention by local governments of the proceeds from tax title foreclosure sales that exceed the tax debt owed constitutes an unconstitutional taking of private property in violation of the 5th and 14th amendments to the Constitution. The Attorney General now opines that the Massachusetts Tax Lien Foreclosure law, G.L. c. 60, is sufficiently similar to the Minnesota state law invalidated in Tyler that it too is constitutionally infirm. The Attorney General’s opinion, issued as Guidance about Tax Lien Foreclosures Based on the Supreme Court’s decision in Tyler v. Hennepin County, directs municipalities to pay excess funds or excess value after a tax title foreclosure to the original homeowner. This is often not possible, as in many cases the property has been taken and foreclosed because the original owner cannot be found or is deceased, and no subsequent owner can be identified.

As mentioned in the prior article, current law provides that the excess funds are credited to the general fund. G.L. c. 44, § 53. Funds cannot be appropriated out of the general fund and paid to individuals without a Town Meeting vote. The Attorney General’s Guidance suggests that the municipality must surrender the excess funds irrespective of the statutory constraints on doing so. In the absence of correcting legislation, to ensure that the excess funds are available for payment in the event an owner can be identified, municipalities should adopt the option offered by the Division of Local Services in Bulletin 2023-05 to deposit such funds in an agency account. When a prior owner or his successor in title or interest is identified, the excess funds can then be paid out of the agency account without the need for Town Meeting action.



General Opines that the Tax

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