05/03/2026
TAX SALE ANNOUNCEMENT
Good Morning All! So there has been a post floating around by Andy Young that has a lot of misinformation in it that I want to clear up.
There are two cases that he "analyzes" that I want to make clear on what they mean.
Tyler v. Hennepin - This is a US Supreme Court ruling that found that it was unconstitutional for the county holding a tax sale to retain the surplus funds following a sale. For instance if you bid $100,000 on a property and the taxes were only $5,000, the extra $95,000 went to the county, not the original owner. This is unconstitutional. It is also not how Indiana Operates so there is no fear of this case impacting Indiana in this regards.
Kidd v. Pappas (incorrectly cited as Bell v. Pappas) - This is a federal decision that ruled that Illinois's tax sale system, specifically Cook County, was unconstitutional. In Illinois, while the surplus does not go directly to the state, the state gets to hold a hearing to see what percentage the former owner gets from the surplus amount. They base this decision on many factors but most importantly, level of culpability of owner. In theory they could forfeit the entire surplus if they wanted to; again, this is unconstitutional, you cannot have a policy that does anything besides gives the entirety of the surplus to the former owner. To make it worse, the average payout time for the surplus requests that are approved is roughly 6 years.
Mr. Young comments that some county's are requiring bidders to agree that they may be responsible to reimburse the former owners for the difference in their bid and the FMV of the property. This is true, however this is Illinois's attempt to keep the surplus and pass the burden to the bidders. There is no formal requirement to do this, it is simply Illinois being greedy.
Indiana statutes are clear - 100% of the tax sale surplus goes back to the former owner (less 1 year of property taxes that accrue during the redemption period where the owner is still on title).
Hopefully this clears things up but if you have any questions at all please do not hesitate to reach out.