Protecting Home Equity: House Bill 1056
The 2024 legislative session is more than halfway completed, but numerous bills regarding affordable housing strategies are still being debated. Property taxes are another top issue, with a Property Tax Commission meeting weekly to advance bipartisan solutions. Amid all this activity, one bill was described by Rep. Bob Marshall as, “one of the most important bills no one likely has heard of for this entire session.”
HB24-1056, Issuance of Treasurers’ Deeds, introduced with 39 pages, is not a quick or light read. If enacted, the bill will make sweeping changes to tax liens and the public auction process. In a feat of collaboration, every county treasurer across the state reviewed and contributed to the proposal. While AARP Colorado hopes that homeowners don’t wind up in either process, legislators appear to recognize that Colorado laws need to comply with United States Constitutional requirements for foreclosure. This bill has the goal of bringing our state into compliance with the U.S. Supreme Court's recent decision (Tyler v. Hennepin County), affirming a property owner's constitutional right to the value of their property more than their tax debt.
Last year, in a 9-0 decision, the U.S. Supreme Court declared Minnesota’s foreclosure process unconstitutional for violating the 5th Amendment against taking private property without just compensation. When reading about the decision, Ron Litvak, AARP Advocacy Volunteer amusingly noted, “I doubt they can usually agree on what coffee to stock in their break room, so this is a resounding statement. And where else can you get a decision that cites the Magna Carta and Blackstone on English Common Law, only to conclude by paraphrasing Jesus: ‘The taxpayer must render unto Caesar what is Caesar’s, but no more.’”
The impetus for this court decision is heartbreaking. In 2010, a 94-year-old Minnesota woman, Geraldine Tyler, was prompted by her family to move into a retirement community. For failing to pay $2,300 in property taxes on her one-bedroom condo, she was hit with over $12,000 in interest and penalties, then owing $15,000. Hennepin County, Minn. sold her property for $40,000 and kept the surplus of $25,000.
Colorado’s system is a little different, in that it involves private investors bidding for tax lien certificates as opposed to the government. However, Colorado is one of 12 states where this illegal taking of personal property can still happen. The Pacific Legal Foundation has been a strong leader and AARP partner in addressing home equity theft. Their website even details a startling map, showing specific Colorado cases: https://homeequitytheft.org/colorado.
This bill revises the tax foreclosure process to ensure no foreclosure in Colorado will ever lead to home equity theft. While the bill has not yet completed the legislative process or been signed into law, it has wide bipartisan support. The bill passed its first committee with an 11-0 vote. On 2/28, it passed the House with only one vote against it. On 3/25, it was unanimously approved by the state Senate. AARP Colorado testified in support of the bill and applauds the legislative collaboration from both sides of the aisle.
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_Karen Moldovan is AARP Colorado Associate State Director of Advocacy
