The New Hampshire Supreme Court affirms the ruling of the Hillsborough Superior Court that the three-year limitation on the duty of a municipality to pay excess proceeds from the sale of tax deeded property is unconstitutional.
When the New Hampshire Supreme Court originally heard this case it determined that the Town had correctly tax-deeded the property in favor of the Town and held that the statutory scheme spanning RSA 80:88 - :90 prohibited a prior owner from claiming excess proceeds from any future sale of the property after the three year period lapsed. Polonsky v. Bedford, 171 N.H. 89 (2018) (Polonsky I). The Court then sent the case back to Superior Court to address whether RSA 80:89, VII constituted an unconstitutional taking in violation of Part I, Article 12 of the New Hampshire Constitution. Under RSA 80:89, VII the duty of a municipality to provide excess proceeds from the sale of property acquired by tax deed terminates three years after the recording date of the deed.
Agreeing with the Superior Court, the Supreme Court ruled that the three-year limitation on the town’s duty to pay excess proceeds under RSA 80:89, VII is an unconstitutional taking under Part I, Article 12. Excess proceeds that were not returned because the three-year redemptive period expired can be recovered by the former owner. Based on the Court’s prior rulings in Estate of Ireland v. Worcester Ins. Co., 149 N.H. 656 (2003) and in Lee James Enterprises v. Town of Northumberland, 149 N.H. 728 (2003) this decision will have a retrospective application of 10 years under RSA 80:78.