Supreme Court Upholds Private Property Rights

Earlier this week, the Supreme Court issued two favorable decisions upholding private property rights. Read NAR’s reaction to the two victories.

In Tyler v. Hennepin County, an elderly homeowner lost her condo to foreclosure and alleged that the county violated the constitutional ban on takings without just compensation when it kept the excess proceeds from the state sale of her property that exceeded the tax debt owed. NAR, along with the American Property Owners Alliance and the Minnesota REALTORS®, filed an amicus brief in support of the property owner’s entitlement to the surplus equity, arguing the state statute effectuates an unconstitutional taking of private property under the Fifth Amendment. In a unanimous holding, the Court held that the homeowner had plausibly alleged a violation of the Takings Clause. “History and precedent dictate that, while the County had the power to sell Tyler’s home to recover the unpaid property taxes, it could not use the tax debt to confiscate more property than was due. Doing so effected a “classic taking in which the government directly appropriates private property for its own use.””

In Sackett v. Environmental Protection Agency (EPA), two Idaho homeowners fought to develop a lot near a lake, but the EPA prohibited them from moving forward, stating the land was protected wetlands under the Clean Water Act (CWA). The “significant nexus” test was applied, which looks at whether there is a “significant nexus” between the wetlands and waters that are covered by the CWA, and whether the wetlands “significantly affect” the quality of those waters. The Court held in favor of the property owners, rejecting the “significant nexus test” and narrowing the definition of what constitutes a wetland under the CWA. In rejecting the broader view held by the EPA, the Court stated that the CWA applies only to wetlands that are "as a practical matter indistinguishable from waters of the United States." “By the EPA’s own admission, nearly all waters and wetlands are potentially susceptible to regulation under [the significant nexus] test, putting a staggering array of landowners at risk of criminal prosecution for such mundane activities as moving dirt.” NAR is a party to ongoing litigation as part of a larger coalition seeking to stop a “waters of the United States” (WOTUS) rulemaking based on the significant nexus test and on a broader definition of jurisdictional wetlands. This recent decision will likely impact the future enforcement of that regulation and the outcome of that litigation.

Stay tuned to nar.realtor for more information on the impact of these decisions and NAR’s advocacy for private property rights' protections.