Alfano Law attorney, John Hayes, successfully challenged a provision of the tax-deeding statute that permitted municipalities to profit from the sale of tax-deeded properties. While the tax deeding statute required municipalities to distribute profit to former owners if they sold the property within three years, the law does not require municipalities to sell tax-deeded properties within that time-frame.
In the case of Polonsky v. Town of Bedford, the Town of Bedford took a house by tax deed and did not sell the property within three years. The Town planned on selling the property and keeping all proceeds from the sale of the house even though the value of the house far exceeded the amount of taxes owed. After John Hayes brought suit on behalf of Richard Polonsky, the N.H. Supreme Court ruled that the statute permitted municipalities to retain proceeds for properties after three years.
In a second appeal, the N.H. Supreme Court considered the constitutionality of the three-year limitation on the obligation of municipalities to return the profit. The Court made it clear that municipalities could not use the tax deeding process to keep more from the sale of tax-deeded properties than was owed in taxes, penalties and interest. The Supreme Court ruled that the three-year limitation on a municipality’s obligation to pay a former owner the profit received from the sale of proceeds violated the New Hampshire Constitution which prohibits government takings without compensation.
You can reach John Hayes at john@alfanolawoffice.com or (603) 715-8395. You can also contact the office here.