VLA Files Lawsuit Against Town of Barton + Village of Orleans for Unconstitutional Taking
PRESS RELEASE — January 23, 2024
Vermont Legal Aid Files Lawsuit Against Town of Barton and Village of Orleans for Unconstitutionally Taking Five-Bedroom Home for $6,550 at Tax Sale Without Compensating Owner for Tens of Thousands of Dollars of Equity
Vermont Legal Aid, Inc. (VLA) has filed a federal lawsuit on behalf of Penny Flynn against the Town of Barton and the Incorporated Village of Orleans for unconstitutionally taking a five-bedroom home she owned for only $6,550 via property tax sale. The Town and Village assessed the home at nearly $80,000 for tax purposes and, given market conditions, the home’s actual value was likely greater.
After taking title to the property for the small tax debt, the Village successfully pressured Ms. Flynn’s daughter and her partner to vacate the home into unstable housing. The Village failed, however, to compensate Ms. Flynn for the tens of thousands of dollars of property value she lost in excess of the $6,550 tax delinquency for which it was taken. Ms. Flynn is a 66-year-old, retired Vermonter living on Social Security Retirement benefits who lost both a valuable asset and the ability to pass down the generational wealth that the home represented to her heirs.
The lawsuit seeks monetary damages against the two municipalities for violations of the Takings, Excessive Fines, and Due Process Clauses of the U.S. Constitution, comparable provisions of the Vermont Constitution, and Vermont common law against unjust enrichment. It comes on the heels of the U.S. Supreme Court’s unanimous decision in Tyler v. Hennepin County, Minnesota last summer which found a constitutional takings violation where a municipality took property at tax sale without compensating the owner for the equity in the home in excess of the taxes due.
Attorney Grace Pazdan, who heads VLA’s Homeowner Legal Assistance Project and is representing Ms. Flynn along with Attorney Greg Fox, says “many towns understand the gravity of the situation when a resident falls behind on taxes and use tax sales sparingly as a means of collection. In fact, of 166 towns that replied to VLA’s 2021 public records survey, 112 reported that they had conducted zero tax sales in the two-year reporting period. Unfortunately, a minority of towns such as Barton appear to use tax sales systematically and indiscriminately against Vermont’s least affluent and most vulnerable residents. Indeed, we have seen Barton noticing and conducting tax sales of properties for less than $300 of delinquent taxes. This only exacerbates the crushing affordable housing crisis Vermonters are facing.”
This is why VLA is committed to working with the legislature and other stakeholders to improve the tax sale system via House Bill 629, an act relating to changes to property tax abatement and tax sales, to ensure appropriate notice and procedural guardrails that drive solutions to get property taxes paid without older, disabled, and other vulnerable low-income Vermonters losing their homes. These include a standardized and workable tax abatement process, reasonable repayment plans, and minimum required tax-debt thresholds prior to tax sale. In circumstances where a property is sold at tax sale, VLA believes that the Constitution and basic notions of fairness demand that the owner be justly compensated for the equity being taken from them in excess of the tax debt. This lawsuit is necessary because the current law provides no process for Vermonters like Ms. Flynn to be compensated for their loss of tens of thousands of dollars of property value following a tax sale.
The case is Flynn v. Town of Barton et al., Case No. 2:24-cv-00076 (D. Vt.)