The decision requires Sandra Nieveen and Kevin Fair to be compensated for the additional equity they lost when investment companies bought the tax liens on their homes. Lancaster and Scotts Bluff counties gave investors the deeds to Nieveen and Fair’s homes, each worth about $60,000, leaving the homeowners empty-handed.

Fair owed $5,268 in unpaid taxes, fees and interest, while Nieveen owed $3,796.

Thanks to the U.S. Supreme Court’s May 2023 ruling in Tyler v. Hennepin County, the couple were entitled to cash out the excess equity in their homes.

In that case, the court ruled that Hennepin County, Minnesota’s seizure of a woman’s $40,000 condominium to pay a $15,000 tax debt violated the Takings Clause of the Fifth Amendment, which states that private property may not be taken for a public purpose without just compensation.

But even after this ruling, the question remained open in the two Nebraska cases as to who would have to compensate the homeowners for their lost equity.

“The investor says the county is liable. The county says the state is liable. And the state says the investor is liable,” said attorney Christina Martin of the Pacific Legal Foundation – a nonprofit legal organization that advocates for property rights – during the hearing on the issue before the Nebraska Supreme Court in February.

In their ruling Friday, a majority of the justices found that Continental, the company that acquired the tax lien on Fair’s property, was liable.

Likewise, they concluded that Tax 106 and Vintage Management, LLC, the limited liability companies that acquired the tax lien on Nieveen’s property, were liable and had deprived Nieveen of her equity in the property.

Both Scotts Bluff and Lancaster County complied with the law and helped Continental, Tax 106 and Vintage Management issue the tax deed for Nieveen and Fair’s properties, but they did not receive any windfall gain from the transaction, the court ruled.

“This is a victory for all Nebraskans, who can now sleep easy knowing that their home equity belongs to them and them alone,” Martin said in a press release about the decision.

Nebraska Supreme Court Justice Jonathan Papik agreed that Fair and Nieveen had a protected property interest and thus a legitimate claim to fair compensation.

However, he disagreed on the question of who should be held liable.

“In my view, Scotts Bluff County should pay appropriate compensation,” Papik wrote in his dissenting opinion in Fair’s case.

Papik pointed to the fact that Continental had acquired the tax lien from the county and that by acquiring the tax certificate, Continental had also acquired the right to request a tax deed and to retain the property unconditionally if Fair could not pay its existing debts.

When Fair did not buy back the property, Continental demanded a tax deed. In return, the county treasurer gave Continental a “deed of transfer” for the property.

“It is my understanding that the county in this case took advantage of a tax debt to confiscate all of Fair’s property claims,” ​​Papik said.

In Nieveen’s case, Papik believed Lancaster County should be held liable for the same reasons, rather than Tax 106 and Vintage Management. Judge Lindsey Miller-Lerman, who was not involved in the Fair decision, joined his dissent.