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Barton woman regains home in tax sale settlement, sparking legal reform

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BARTON — A federal lawsuit challenging the constitutionality of Vermont’s tax sale process has been settled, with the Village of Orleans agreeing to return a home to its original owner and cover legal costs.

The case, Flynn v. Town of Barton and Village of Orleans, was filed by Vermont Legal Aid, Inc. (VLA) on behalf of Penny Flynn, a 66-year-old Social Security recipient. Flynn lost her home, valued at nearly $80,000, for $6,550 in unpaid taxes and fees.

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The lawsuit alleged that the tax sale process violated the Takings, Excessive Fines, and Due Process Clauses of the U.S. Constitution, as well as the Vermont Constitution. It claimed that Flynn’s loss of significant equity in the home through a low-bid tax sale was unconstitutional.

This settlement follows the U.S. Supreme Court’s unanimous 2023 decision, which ruled that local governments violate the Constitution’s Takings Clause when seizing and selling property worth significantly more than owed taxes.

The case prompted legislative action, resulting in Act 106, signed by Governor Phil Scott on May 13, 2024. The new law requires municipalities to offer homeowners reasonable repayment plans before initiating tax sales and consider homeowners’ financial circumstances.

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Greg Fox, Flynn’s attorney, expressed satisfaction with the outcome.

“We are thrilled that Ms. Flynn will be getting her property back and the financial security that it represents,” Fox said.

Grace Pazdan, Director of VLA’s Homeowner Legal Assistance Project, added that the case “should put cities and towns on notice that taking taxpayer’s equity via tax sale comes with significant legal risk.”

Act 106 also establishes a working group to consider further reforms, including potential equity recovery for homeowners whose properties are transferred through tax sales. VLA continues to advocate for additional protections for low-income, disabled, and older homeowners facing tax-related property loss.

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