East Orange Resident Faces an Uphill Battle After a Surprise Tax Foreclosure

by: Michael Realbuto
16 Dec 2021

Buying, owning, and securing property can be one of the most monumental and emotionally taxing periods in a person’s life. As John Adams once noted, “[p]roperty must be secured, or liberty cannot exist.” Discourses on Davila, in 6 Works of John Adams 280 (C. Adams ed. 1851). These principles are woven throughout the story of Lynette Johnson, a New Jersey woman faced with an unwarranted tax foreclosure sale by her local government.

Ms. Johnson emigrated to New Jersey from Guyana in 1993 and raised eight children with her husband. While on an extended trip back to Guyana in 2014, Ms. Johnson purchased a commercial property in East Orange for two of her adult children to share: one side of the property contained a deli-grocery store and the other side of the property operated as a shipping center.  At the time, Ms. Johnson bought the property for $55,000 and spent another $1,600 on architectural plans and permits.

Bureaucratic issues began when the Johnson family never received the property tax assessments for the first year that they owned the property. Notably, the local government never mailed any information to the family’s long-term residence where they lived and continuously paid taxes for three decades prior. Without the necessary information, the family did not realize that they missed a payment of the $4,621.98 property tax on the property. Unfortunately, the unpaid tax eventually became a lien on the property.

In 2018, the family was surprised to find out that the City of East Orange purchased the tax lien three years earlier and began foreclosure proceedings without ever contacting them. Ms. Johnson’s daughter rushed to pay the back taxes (which accrued to $20,000) but was advised by the City that they could not accept the payment because the City had obtained a final judgment of foreclosure making redemption no longer possible. Since the City had foreclosed and sold the property to a private investor for $101,000, Ms. Johnson was automatically divested of any ownership interest.

After the property tax debacle, Ms. Johnson fortunately connected with the lawyers at the Pacific Legal Foundation to fight back against the city for the overzealous sale that resulted in an $81,000 windfall to the City ($101,000 foreclosure sale minus the mere $20,000 owed in taxes). The Pacific Legal Foundation’s article about the case states as follows:

To be sure, the city government is vested with the authority to levy and collect taxes, and these taxes should be paid. But the power to collect taxes does not give the government the power to take more than it is owed.

The Takings Clause of the New Jersey Constitution, like its federal counterpart in the Fifth Amendment, protects an individual’s right to just compensation if the government takes their property. But this right was denied to Lynette. Instead, the government stole $81,000 worth of equity and left the family with nothing.

[The full article can be viewed here.]

The Johnson case is now pending in the Superior Court of New Jersey.  Stay tuned as we follow Ms. Johnson’s fight for her property rights…