KALAMAZOO, MI (WKZO AM/FM) — About half of Michigan’s counties have been named in a class-action lawsuit over profits from the sale of tax foreclosed homes. Allegan, Barry, Calhoun, Cass, Kalamazoo, Ottawa, St. Joseph, and Van Buren counties in Southwest Michigan are on the list.
Plaintiffs in the lawsuit are claiming that the counties owe money for the sale of foreclosed homes prior to July 2020.
Before then, individual counties were permitted to act as the Foreclosing Governmental Unit (FGU) rather than the state, meaning that the FGU held the responsibility for inspecting, providing due process notifications, and eventually, the resale of the tax foreclosed property. Officials are saying in this case however, that properties were sold for more than the taxes owed on them.
The Michigan Supreme Court, on July 17, 2020, issued an opinion in which tax sale profits retained by the county FGUs were are required to returned to the Plaintiffs. And now as of Friday, April 8, a lawsuit that seeks to recover those funds is now underway.
In an interview with News 10 (WILX-Lansing), Eaton County Treasurer Robert Roberson said that county treasurers have only been following the law.
“Michigan’s General Property Tax Act requires treasurers to foreclose properties that are three years tax delinquent,” said Roberson. “State law enacted in 1999, and updated in 2020, dictates how foreclosure operates, including the use of funds from property tax auctions. County treasurers do not.”
Roberson went onto say that county treasurers make every effort to help residents stay in their homes, even if they are sometimes required to deal with foreclosures.
“It is the constitutional responsibility of treasurers to facilitate the law. But the way a tax foreclosure proceeds matters a lot to us,” said Roberson. “County treasurers do not heartlessly foreclose on property when it can be avoided. We provide extensions for those who have lost work, become ill, or are disabled. We offer payment arrangements for taxpayers to pay over time. Treasurers don’t do all of this because it’s required by law. We do it because it’s the right thing to do.”
Counties named in the lawsuit include: Alger, Allegan, Antrim, Baraga, Barry, Benzie, Berrien, Calhoun, Cass, Charlevoix, Chippewa, Delta, Dickinson, Eaton, Emmet, Gogebic, Grand Traverse, Hillsdale, Houghton, Ingham, Ionia, Kalamazoo, Kalkaska, Kent, Lake, Leelanau, Mackinac, Manistee, Ontonagon, Osceola, Ottawa, St. Joseph, Schoolcraft, Van Buren, and Wexford.
