Investigations & Cases

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ACTIVE CASE

Lawsuits Filed to
Reclaim Surplus
Kept in Tax
Foreclosure Sales

Kohn Swift has filed three class-action lawsuits in federal court in Oregon and New York on behalf of former property owners who had their home seized and sold through tax foreclosure sales.

The lawsuits alleges that the Defendants and the Defendant Class engaged in the unfair and illegal practice of retaining all proceeds from tax foreclosure sales of properties above and beyond the amount of property taxes and associated costs owed, rather than returning the surplus proceeds to the former property owners. The retention of the surplus proceeds violates the Takings Clauses of the Oregon and New York Constitutions and the U.S. Constitution’s prohibition on excessive fines.

The Plaintiffs seek declarative and injunctive relief and compensation for former property owners.

The two lawsuits in Oregon are Lynch et al v. Multnomah County et al 3:2023cv01502 and Sawyer et al v. Marion County et al 3:23-cv-01971. The New York lawsuit is Merckx et al v. Rensselaer County et al 1:2023cv01354.

For more information, or if you are a former property owner who lost property at a tax foreclosure sale, you should contact Elias Kohn at ekohn@kohnswift.com or 215 238 1955 or Zahra Dean at zdean@kohnswift.com for a free consultation.

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CASE STATUS ACTIVE
DATE FILED OCTOBER 12, 2023
DEFENDANTS Multnomah County, Lane County, Yamhill County, the Attorney General of Oregon, the Director of the Oregon Department of Revenue, and a Defendant Class of all counties in Oregon
COURT District of Oregon

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CASE OVERVIEW

When a home is seized due to nonpayment of property taxes and sold by the government, what happens to any money beyond the amount of taxes owed? Can the government keep the surplus?

No. Some states have allowed their governments to retain the surplus in tax foreclosures, but a recent U.S. Supreme Court case has changed that.

Kohn Swift has filed a class-action lawsuit in Oregon for homeowners in this position. Each person had a home seized by the county; the county sold their home for significantly more than the amount of taxes owed; the homeowner never saw a penny of the money from the sale.

Kohn Swift attorney Elias Kohn stated that “this case seeks to end the unconstitutional taking of property and the compensate former property owners who lost every penny of equity in their homes over unpaid taxes. As one client explained, regaining some of those proceeds would be ‘life changing.’”

Read the formal press release here. The lawsuit, Lynch, et al. v. Multnomah County, et al., can be read here.

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