Property Rights

Does the 5th Amendment Protect Community Associations Against Uncompensated Government Takings?

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Writing at the blog of the Cato Institute, Ilya Shapiro and Trevor Burrus urge the U.S. Supreme Court to take up the case of Mariner's Cove Townhomes Assocation v. United States, which centers on a Takings Clause challenge to the federal government's uncompensated seizure of private property. They write:

This case arises from the federal government's taking 14 of 58 townhouses from one development in the wake of Hurricane Katrina. Mariner's Cove owned a right to collect dues that was appended to those 14 townhomes, and sued the government for extinguishing that valuable right without just compensation under the Fifth Amendment's Takings Clause.

In contrast to most lower courts, however, the U.S. Court of Appeals for the Fifth Circuit held that "the right to collect assessments, or real covenants generally" are not subject to Takings Clause analysis. In other words, the government can take those rights without paying anything to the owners….

The perverse implications of the Fifth Circuit's ruling are clear: it would allow for local governments to require the creation of a community association, benefit from the resulting private delivery of services while collecting taxes from its members, and later take the property without even paying back the very fees that enabled the government's benefit.

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  1. In contrast to most lower courts, however, the U.S. Court of Appeals for the Fifth Circuit held that “the right to collect assessments, or real covenants generally” are not subject to Takings Clause analysis.

    If the ability to collect more taxes is a public purpose for the purposes of Kelo, how can losing the ability to collect assessment not be a taking for the purpose of this case? Either indirect revenue derived from real estate has value or it doesn’t.

    1. The covenant for dues is a stick in the property rights faggot, I don’t see how it couldn’t be taking.

      1. Dude who taught me property when I was a 1L was openly gay. Definitely did not call property a faggot.

      2. I was almost offended on SD’s behalf for a second there until I read that a second time.

        1. I’m taking the word back!

          1. Just don’t be niggardly with it.

            1. I guess we could use fasces instead.

    2. Or it does for the rulers but not for the ruled, due to the little known FYTW doctrine.

  2. Well, it used to do that.

  3. Every zoning change that puts restriction on a property is a “taking” and should be compensated (unless each and every property owner effected agrees to the change.)

    1. I agree with that. But we’re not talking about the owners of the property here. We’re talking about the HOA for the townhomes sueing because they can’t collect dues from as many people.

      This is like saying the local cable monopoly should be able to sue the government over every house it seizes, because it has fewer customers.

      1. They owned the right to the fees. It has nothing to do with customers.

  4. Meh. This kind of logic could easily be stretched to saying that if you seize a group of townhomes the local Safeway can sue because you’ve taken away part of their customer base, thus reducing their profits.

    Is anything that negatively impacts an area organization or business considered a taking?

    Once you say that this kind of indirect effect is a taking, then you could easily say that other types of changes could be a takeng – i.e. changing the law so that HOA membership is voluntary, dergulating the cabbie business, etc.

    Suppose the government eliminated the raisin program. Would raisin farmers be able to sue and say that’s a taking because it harmed their business model?

    1. A covenant is a property right that they owned. That was taken away from them.

  5. Were they expecting the government to pay those 14 residences dues in perpetuity? If they don’t have to provide services for those 14 residences why should they get any fees?

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