Supreme Court ruling may force Maine to change its foreclosure law

A version of this article was originally published in The Daily Brief, our Maine politics newsletter. Sign up here for daily news and insight from politics editor Michael Shepherd.

An increasingly divided U.S. Supreme Court was united on one issue this week, siding with a 94-year-old Minnesota woman whose condominium was seized by her county over a relatively small tax bill.

Most states allow local governments to sell tax-delinquent properties after a certain period. But only Minnesota, Maine and 10 other states allow them to keep the amount above and beyond the amount due in a practice that the Pacific Legal Foundation, the conservative group representing the Minnesota woman, calls “home equity theft” by the government.

The context: In the Minnesota case, the woman owed $2,300 in taxes, plus nearly $13,000 more in penalties, but the county kept the $40,000 that it got for the home. Between 2014 and 2021, 43 Maine homes were taken like this, with owners losing 88 percent of equity, the Pacific Legal Foundation said.

Maine’s high court upheld the law in a 1974 case over a $399 tax bill in Auburn. Lawmakers added protections for seniors in 2018. Republican lawmakers led by Rep. Chad Perkins of Dover-Foxcroft have introduced a bill this year that would require municipalities and the state in unorganized areas to let homeowners to claim the excess money.

The Maine Municipal Association, which represents cities and towns, has opposed eroding the existing law, as their counterparts across the country did in the Minnesota case. The group said it was monitoring the high court’s decision, which was handed down quickly after last month’s arguments made clear justices were sympathizing with the plaintiff.

What’s next: Now it looks clear that the Legislature will have to move some sort of fix to the existing law similar to one proposed by Perkins. The Democratic-led chambers have let the bill languish in a committee since a February hearing, but they may have to pick it up soon to avoid leaving cities and towns in legal limbo.