Michigan Counties Keep All Proceeds from Tax Sales of Properties Class Action

If a person does not pay the taxes owed on a piece of property, the property itself may be seized and sold to generate money to pay the taxes. What this class action objects to is the practice it alleges against Michigan counties who keep the entire sum generated by the sale, even if it is considerably more than the taxes owed. The complaint names as defendants the counties of Alcona, Alpena, Arenac, Bay, Clare, Crawford, Genesee, Gladwin, Gratiot, Huron, Isabella, Jackson, Lapeer, Lenawee, Macomb, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Sanilac, St Clair, Tuscola, and Washtenaw, along with their individual treasurers.

The class for this action is all owners of real property in the following counties, whose real property, during the relevant statutory period, was seized in a tax foreclosure, which was worth more than the total amount owed as a tax delinquency or which was sold for more than that amount, and who was not refunded the value above that amount. The counties are Alcona, Alpena, Arenac, Bay, Clare, Crawford, Genesee, Gladwin, Gratiot, Huron, Isabella, Jackson,
Lapeer, Lenawee, Macomb, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Sanilac, St Clair, Tuscola, and Washtenaw.

Plaintiff Thomas A. Fox owned property at 109 Court Ave., Alma, Michigan, in Gratiot County. He owed the county $3,091.23 in taxes. In February 2017, Michelle Thomas, the treasurer for Gratiot County, seized the property on behalf of the county.

The State Equalized Value of the property at the time was $25,200. The complaint claims, “Because the fair market value of a property is at least twice the amount of its State Equalized Value, this means that the government would have known or should have known that said property had a fair market value of at least $50,400.00.”

However, the complaint alleges, instead, that treasurer Thomas sold the property in August 2017 for $25,500. The difference between what Fox owed in tax delinquency and this sale price was $22,408.77. The difference between what he owed in tax delinquency and the minimum fair market value of the property, the complaint says, was $47,308.77.

The complaint alleges that Fox thus had at least $47,308.77 in equity in the property; and that, even if the amount was calculated as the different between the sale price and the tax bill, Fox had at least $22,408.77 in equity in the property. However, no money was returned to Fox after the sale. “Thus,” the complaint says, “the County of Gratiot and Defendant Michelle Thomas took or destroyed all of [Fox’s] Equity in the Property.”

According to the complaint, other counties have done the same thing to other property owners, and these actions are “a voluntary policy, custom, and/or practice…” and deserving of damages and other relief.

Counts include inverse condemnation, violation of due process, and Constitutional violation, among other things.

Article Type: Lawsuit
Topic: Taxes

Most Recent Case Event

Michigan Counties Keep All Proceeds from Tax Sales of Properties Complaint

September 4, 2020

If a person does not pay the taxes owed on a piece of property, the property itself may be seized and sold to generate money to pay the taxes. What this class action objects to is the practice it alleges against Michigan counties who keep the entire sum generated by the sale, even if it is considerably more than the taxes owed. The complaint names as defendants the counties of Alcona, Alpena, Arenac, Bay, Clare, Crawford, Genesee, Gladwin, Gratiot, Huron, Isabella, Jackson, Lapeer, Lenawee, Macomb, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Sanilac, St Clair, Tuscola, and Washtenaw, along with their individual treasurers.

Michigan Counties Keep All Proceeds from Tax Sales of Properties Complaint

Case Event History

Michigan Counties Keep All Proceeds from Tax Sales of Properties Complaint

September 4, 2020

If a person does not pay the taxes owed on a piece of property, the property itself may be seized and sold to generate money to pay the taxes. What this class action objects to is the practice it alleges against Michigan counties who keep the entire sum generated by the sale, even if it is considerably more than the taxes owed. The complaint names as defendants the counties of Alcona, Alpena, Arenac, Bay, Clare, Crawford, Genesee, Gladwin, Gratiot, Huron, Isabella, Jackson, Lapeer, Lenawee, Macomb, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Sanilac, St Clair, Tuscola, and Washtenaw, along with their individual treasurers.

Michigan Counties Keep All Proceeds from Tax Sales of Properties Complaint
Tags: Property Sale for Unpaid Taxes, Tax, Tax Overcharges