Michigan Keeps Surplus in Tax Sales of Properties Class Action

If a person owns a property and falls behind on the tax payments on it, the property can be seized by the government entity to which the taxes are owed and sold to pay the taxes owed. This class action brings suit against a number of Michigan counties—Huron, Sanilac, St. Clair, Lapeer, and Genesee—alleging that that when they seize and sell properties for amounts greater than the taxes owed, the counties do not return the excess amounts to the former owners.

The class for this action is all property owners who, during the relevant statutory period, had property seized by a county treasurer of Huron, Sanilac, St. Clair, Lapeer, or Genesee and sold at tax auction for more than the amount owed and who was not refunded the excess equity.

The plaintiff in this case is Walter Puchlak Revocable Trust Agreement Dated February 24, 2010, through its trustee, Tammy Puchlak. Named as defendants are the counties listed above and their individual treasurers.

The Puchlak Trust owned a property at 11172 Oatman Road in Brockway, Michigan. It owed roughly $9,600 to the county, consisting of unpaid taxes, additional compounding interest, fees, penalties, and other costs.

Because the $9,600 remained unpaid, county treasurer for the County of St. Clair, seized the property and had it sold at auction for $150,000.

The complaint alleges two things about this. First, it says, “The Oatman Road property had a value and a state equalized value of $117,500.00, meaning that the county government believes that said property had a fair market value greater than $235,000…”

Second, the amount of the sale was far greater than the tax delinquency owed: “Defendant Kelly Roberts-Burnett, as a county treasurer, destroyed equity existing when selling the Oatman Road property at the highly reduced, non-fair market value price of $150,000.00, and then kept … $140,000.00 as the difference between the tax auction price and the total tax delinquency owed for the benefit of County of St[.] Clair.”

What does this add up to? The complaint alleges that the Trust’s “equity of $225,400.00 was taken or destroyed by Defendants Kelly Roberts-Burnett and/or County of St[.] Clair.” Also, “No refund of the excess or surplus equity was provided by Defendants Kelly Roberts-Burnett and/or County of St[.] Clair.”

The counts begin with inverse condemnation, with the complaint alleging that the county has taken the property “in the form of equity and/or monies beyond the amount of unpaid taxes and administrative expenses, costs, and interest owed, and have appropriated said monies for public use without using the mandatory processes outlined” in the law. The other count is excessive fines, a violation of the Eighth Amendment to the US Constitution and also of Michigan law.

Article Type: Lawsuit
Topic: Taxes

Most Recent Case Event

Michigan Keeps Surplus in Tax Sales of Properties Class Action

December 14, 2020

If a person owns a property and falls behind on the tax payments on it, the property can be seized by the government entity to which the taxes are owed and sold to pay the taxes owed. This class action brings suit against a number of Michigan counties—Huron, Sanilac, St. Clair, Lapeer, and Genesee—alleging that that when they seize and sell properties for amounts greater than the taxes owed, the counties do not return the excess amounts to the former owners.

Michigan Keeps Surplus in Tax Sales of Properties Class Action

Case Event History

Michigan Keeps Surplus in Tax Sales of Properties Class Action

December 14, 2020

If a person owns a property and falls behind on the tax payments on it, the property can be seized by the government entity to which the taxes are owed and sold to pay the taxes owed. This class action brings suit against a number of Michigan counties—Huron, Sanilac, St. Clair, Lapeer, and Genesee—alleging that that when they seize and sell properties for amounts greater than the taxes owed, the counties do not return the excess amounts to the former owners.

Michigan Keeps Surplus in Tax Sales of Properties Class Action
Tags: Property Sale for Unpaid Taxes, Tax Charges, Tax Overcharges