GREENFIELD — City lawyers appeared before City Council Wednesday night in an attempt to offer clarity around the tax title-taking process following a Supreme Court ruling that could change the way the state, and therefore city, proceeds in the event of a property or home foreclosure.

Earlier this year, a unanimous U.S. Supreme Court decision ruled that local government can only retain tax debts owed, and no more, when seizing and selling private property, thus putting an end to what critics have dubbed “home equity theft.”

Before this ruling, Massachusetts, along with 11 other states, allowed local governments to foreclose on private property when taxes were overdue and keep all the proceeds, even if the taxes owed were a fraction of that amount.

“The Legislature has to review our process because while it may be comparable [to the Tyler v. Hennepin County (Minnesota) ruling], it’s not necessarily exactly the same,” said Iris Leahy, Holyoke-based tax title attorney. “In that Supreme Court case, they mentioned New York has a similar tax-title process but does not violate the [United States] Constitution, because they allow people to answer the court and claim their surplus equity. There’s a lot of uncertainty here. There are a lot of things the Legislature is going to have to address, and likely make amendments to [Massachusetts General Law] Chapter 60, but without that happening, the current Chapter 60 general laws are that the surplus is to be retained by the municipality.”

She added that, in light of the “uncertainty” around the process going forward, municipalities have been granted the authority to put future funds that are in excess into an “agency fund,” or temporary fund, until municipalities receive further instruction from the state on the foreclosure practice.

Joined by Tax Collector Kelly Varner, the attorneys, however, were met with resistance from residents, who argued that based on a statement from the Massachusetts Land Court, homeowners who are undergoing tax-taking foreclosure and have excess value in their equity have a right to receive compensation for that loss.

“The property owners who have already had their home equity stolen illegally from them are not going to wait for a directive from the state courts on this matter,” said resident Joan Marie Jackson, one of three activists who have been vocal on the matter in recent months. “These victims of home equity theft have waited years for their just compensation. We want Greenfield to admit these actions have been declared by the Supreme Court to be unconstitutional and to show there is a path for restitution for these victims.”

Jackson pushed councilors to move forward on two proposed ordinances relating to the tax title-taking process. The first would require the city to contact all property owners who fall within the statute of limitations and who were subject to unconstitutional surplus equity taken and to offer compensation. The second ordinance would direct the tax collector to use the power of sale to enforce a lien for taxes, rather than the power of taking, which is the process used by banks when foreclosing and selling a property to cover an outstanding mortgage balance.

Resident Gary Seldon called the city’s current practice “just plain wrong.”

“The way to stop stealing is to stop stealing,” he said.

Still, Varner emphasized that, until the Legislature makes changes, she is bound by Massachusetts General Law as it is currently written.

“We cannot create any ordinance that goes against Mass General Law,” she said. “At this time, the only thing we can do is wait and see what the state does as far as updating the statutes for tax title, which I do believe they will make changes.”

Attorney Jesse Belcher-Timme echoed a similar sentiment.

“This is something a lot of people want to change,” he said. “Boston seems to be working toward that. … Cities and towns across the state are waiting to see what the Legislature is going to let us do because that’s the power dynamic between the Legislature and municipalities.”

As far as excess funds, he added, “that same state law essentially determines that once that state property is sold, the proceeds all become public funds.”

In a back-and-forth that lasted roughly an hour, councilors asked questions of Varner and the lawyers, seeking further clarification.

“I hear each of you stating Mass General Law does not allow us to stop taking people’s home equity, but can you cite those laws?” asked Precinct 1 Councilor Katherine Golub.

Varner responded that the chapter she was referencing, Chapter 60, Section 87, doesn’t address home equity, but rather addresses whether a municipality creates a bylaw that dictates how taxes are collected.

“It means you can dictate I have the power to sell that lien, or I have the power to enforce it, as I do now,” she said.

Golub also asked the lawyers to respond to the Massachusetts Land Court statement referenced by Jackson earlier. Leahy said she hadn’t seen it, though it wasn’t clear to her if it was a decision or something non-binding.

“I don’t think there’s been a case before the Land Court that’s been decided in Massachusetts following the Supreme Court decision,” Leahy said. “I only know the Legislature is taking it up to review and I’m not sure it has been decided that the way it’s written is unconstitutional.”

At-Large Councilor Christine Forgey said she thinks everyone knows it’s “time for reform.”

“I don’t think any of us are against reform. The question in my mind is how do we affect that reform?” she said. “We can’t override state legislation. The state is working on it. We’ve heard that from a number of speakers this evening. I think the appropriate action … is to wait until we get guidelines to come down from the state. I don’t think it’s going to be a process that takes 10 minutes to solve while we deliberate what is best for Greenfield and for our citizens here.”

Reporter Mary Byrne can be reached at mbyrne@recorder.com or 413-930-4429. Twitter: @MaryEByrne.