Lawsuit alleges Mpls. collected excessive property taxes

A lawsuit alleging some Minneapolis homeowners paid excess property taxes can go forward in tax court, ruled the Minnesota Supreme Court.

Attorneys are seeking class action status for the case, which alleges the city of Minneapolis wrongly inflated home values for homeowners in three neighborhoods: Near North, Camden and Phillips. The case alleges the city willfully ignored foreclosure sales in these neighborhoods, which led to inflated tax appraisals.

Attorney John Braun represents homeowners in the case and says an estimated 10,000 people paid millions of dollars in illegally collected taxes.

"That's several thousand dollars a year that they are collecting that they shouldn't be. Our argument is that in some of these cases their tax bill was so high that it helped to force people into foreclosure," Braun said. "They couldn't continue paying for their home because at least one, maybe two mortgage payments a year were being sucked up by illegal taxes."

Homeowners in the suit are asking for their money back and for the city to change its appraisal practices to reflect homes' current value.

City attorneys deny the allegations in the case.