Minnesota Tax Forfeiture Surplus: The State Behind Tyler v. Hennepin
Minnesota doesn't run a lien or deed auction the way most states do — unpaid property taxes lead to forfeiture, meaning the state itself takes title, and the county then sells the property at public auction on the state's behalf. This is also the exact system that produced Tyler v. Hennepin County: Geraldine Tyler owed about $15,000 in back taxes on her Minneapolis condo, Hennepin County forfeited it, sold it for $40,000, and under the law at the time kept the entire $25,000 above what she owed. The Supreme Court ruled unanimously in 2023 that this was an unconstitutional taking, and Minnesota rewrote its own process for forfeitures from 2024 on.
How it works now: a mandatory auction, then a claim window
For any parcel that forfeited after December 31, 2023, the county must offer it at a public auction to the highest bidder, within six months of the later of two dates: the filing of the forfeiture certificate or the day the occupant moves out (Minn. Stat. § 282.005). For the first 30 days the price can't be below the property's estimated market value; after that it drops to the minimum bid, which is the delinquent taxes, special assessments, penalties, interest and costs. The minimum bid goes to the county's forfeited tax sale fund, and everything above it is surplus that belongs to the former owner and other interested parties, like a mortgage holder (§ 282.005, subd. 5).
Within 60 days after the sale, the county auditor must send every interested party a notice and an actual claim form by certified mail, and a second notice goes out between 90 and 120 days after the sale. Claims are due within six months of the first mailing. A single undisputed claim is paid once that period ends, several claims are split in proportion to each claimant's interest, and disputes go to district court. Surplus nobody claims goes back to the county fund (§ 282.005, subds. 6, 7, 9).
One limit catches people: only that initial auction creates a claimable surplus. If the parcel doesn't sell there, it goes into the county's regular inventory, and Hennepin and Washington counties both say later inventory sales are not eligible for surplus claims.
If this happened to you before the law changed: a separate settlement exists
Minnesota's story has a second layer most states don't have. For property forfeited before 2024, the state settled the surplus lawsuits instead of reopening each sale, and appropriated $109 million for the settlement in 2024 (Laws 2024, ch. 113, § 1, subd. 5). In 2026 the Legislature told the claims administrator to return up to $40 million of unspent settlement money on June 29, 2026 (Laws 2026, ch. 128). If your Minnesota property was forfeited years ago, check the settlement's status with the Minnesota Department of Revenue rather than assuming a claim is still possible — it covers a different group of former owners under different rules from the current six-month window.
Why Minnesota moved first, and moved hard
Most states that had a "county keeps the surplus" rule only fixed it after Tyler forced the issue nationwide. Minnesota didn't have the luxury of waiting — it was the defendant. That's part of why its fix is more structurally complete than a lot of what followed elsewhere: a mandatory auction (not "may hold one if convenient"), a hard 60-day notice deadline, an actual claim form mailed proactively rather than a former owner having to go looking for it, and a dedicated backward-looking remedy for people harmed under the old rule. Several other states' post-Tyler reforms — Colorado's 2024 public-auction requirement among them — cite Minnesota's case directly as the reason they had to act.
For investors
If you're bidding at a Minnesota tax-forfeited land auction, the mandatory-auction structure means every sale is now genuinely competitive rather than a quiet handoff — expect real bidding on properties with equity well above the delinquent tax amount, since that's exactly the scenario the reform was built around. The six-month proactive-notice process also means unclaimed surplus doesn't linger in legal limbo the way it can in states without a mailed claim form; if a former owner is going to claim it, they usually do so within that window rather than years later.
Looking for a list? Our directory doesn't have an official Minnesota county list yet, so for now ask the office that ran the sale. The counties that do publish one are in our directory of official surplus funds lists.
This article is general information, not financial or legal advice. Confirm current forfeiture, auction, and claim procedures — including settlement eligibility for pre-reform forfeitures — with the relevant Minnesota county auditor or the Minnesota Department of Revenue. See our broader guide on surplus funds after a tax sale and the Minnesota state page for forfeiture mechanics.