State governments or municipalities in New England and nationwide have the right to issue tax liens on real property if the owner fails to pay property taxes. In these situations, the government entity may ultimately be able to seize and sell off the property to recoup the unpaid taxes. However, this process may be subject to constitutional limitations, as demonstrated by a recent decision issued by the New Hampshire Supreme Court involving a case filed by a property owner challenging the city’s intention to sell his property and keep all of the proceeds, even those in excess of the unpaid amount of taxes.
The plaintiff in the recently decided case is a man who inherited a property in 2008, but failed to pay property tax on the property for three years following his inheritance. The city where the property is located issued several tax liens on the property in the amount of unpaid taxes and other fees. After the plaintiff failed to redeem the property and pay the past-due taxes, the city initiated proceedings to take title to the property and sell it at auction to compensate themselves for the unpaid taxes. In addition to the amount of unpaid taxes, the city relied on a New Hampshire law to keep any proceeds from the sale in excess of the past-due tax amount.
The plaintiff filed suit against the city, challenging their intention to take and sell the property without compensating him for the value of the property in excess of the amount of unpaid taxes. Although the plaintiff relied on several theories in his initial lawsuit, the trial court eventually ruled that his claim had merit, based on the argument that the law relied on by the city to keep all of the proceeds of the sale of the property violated the state constitutional provision protecting citizens from government taking of their property without just compensation. As a result of the court’s ruling, portions of the state law relied upon by the city to seek the full value of the plaintiff’s property will no longer be enforceable.
The Rhode Island Constitution Section 16 protects private property owners from the governments taking of their property without just compensation, and could be used to challenge the terms of the government’s sale of a property seized after the issuance of a lien for unpaid taxes or other reasons. Rhode Island property owners facing the seizure or forced sale of their property without their consent should seek the advice of a qualified Rhode Island real estate attorney to evaluate their rights and options in disputing the government’s action against them.
Finding an Experienced Rhode Island Real Estate Lawyer
If you are facing tax liens, an Rhode Island eminent domain claim or any other attempt by a state or municipal government to take or sell your property, you may be able to challenge the claim, or at east obtain more favorable conditions throughout the process. The skilled Rhode Island real estate attorneys at Bilodeau Capalbo, LLC, can ensure your rights are protected in any real estate dispute with a government entity or private party. Contact us to discuss your issue. Call our offices at 401-300-4055 and schedule a consultation with a Rhode Island real estate attorney at Bilodeau Capalbo today.