Reclaiming Surplus Proceeds from Property Tax Foreclosures in Michigan
Over 120 years of combined legal experience advocating debt resolution for our clients.
We look forward to earning your trust.
In the July 2020 ruling of Rafaeli, LLC v Oakland County, the Michigan Supreme Court unanimously agreed that foreclosing government units that auction off property to satisfy tax debts must return all surplus proceeds to the title owners at the time of the foreclosure.
The court held that when the county failed to return the difference between the sale proceeds and unpaid taxes, interest, penalties, and fees, they violated the Michigan Constitution’s Takings Clause.
Having concluded that the county committed a taking, this landmark ruling effectively struck down the practice of home equity theft in Michigan. It was a crucial victory over the government’s abuse of power and unjust forfeitures.
In December 2020, the Michigan Legislature amended the General Property Tax Act to create procedures for tax-foreclosed property owners to claim any surplus proceeds.
File for Surplus Proceeds
If you had a property that sold in a tax foreclosure after July 17, 2020, you may notify the foreclosing governmental unit, or “FGU,” that you intend to claim any surplus proceeds from their sale. You may also be able to claim surplus proceeds if your property was foreclosed in previous years but was not sold until after July 17, 2020.
The deadline for filing a claim is July 1, 2021. In 2022 and going forward, the July 1 deadline will remain, but only allow properties foreclosed at the start of that year.
The deadlines and paperwork can be confusing. There are motions that need to be filed with the applicable court in order to recover proceeds. There are also strict deadlines when those motions need to be filed. One of our attorneys at Acclaim Legal Services can help you through the process of claiming your surplus proceeds, making sure you have the correct information for your property and meet all of the deadlines.
Retroactive Proceeds
What about properties that went into foreclosure before the Michigan Supreme Court ruling? There is potential for retroactive payments to foreclosed properties that pre-date the court ruling. The General Property Tax Act established a separate procedure for retroactive payments in the legislator. If the Court decides to enforce that ruling, many previous tax foreclosures could receive proceeds from their sale.
Get Help from Acclaim Legal Services
Given the several procedural requirements and deadlines that must be met to potentially recover surplus proceeds from a tax foreclosure sale, you should seek knowledgeable legal counsel.
That’s where Acclaim Legal Services can help. Our attorneys are experts at handling property tax situations.
With 7 offices spread throughout Michigan, we have helped over 14,000 clients find a positive resolution to their problems. We are more than happy to help you too!
Give us a call on 866-261-8282 to speak to one of our attorneys or schedule a free, confidential consultation to learn more about your rights after a tax auction.
I would like to take the opportunity to Thank Acclaim for the way that they handled my Chapter 13. A very special Thank you goes out to Cindy, she handled everything in a very timely matter always answer my questions so that I understood.
She is one of…
Acclaim Legal Service is an outstanding firm to use for your bankruptcy need. The team of employees are courteous and knowledgeable. Attorney, Chris Jones, is thorough, consistent and resilient. He will stand up for you and with you through the entire bankruptcy…
I along with my husband would like to thank our attorney and Acclaim Legal Services for their outstanding service during our Chapter 13 bankruptcy. Stacy was able to push our home modification through smoothly and rapidly after failed attempts by my husband and me to work with our mortgage company…
In looking back, the best decision I made was to go with Acclaim – a bankruptcy only law firm. I was extremely stressed because of the financial situation I was in when I saw an advertisement for Acclaim. After my first visit I could finally feel hope.
I…