UPDATE 9:30 p.m.
After the U.S. Supreme Court’s decision last week, many property owners across the state who were foreclosed on might be getting some money back in their pocket.
Forty-three counties across the state, and many of them in Northern Michigan will be forking out thousands of dollars to property owners who were foreclosed on for delinquent taxes. Grand Traverse County is one of the many counties that will be paying back property owners.
Grand Traverse County Treasurer Heidi Scheppe said there has been multiple lawsuits over the years about the legality of the property tax foreclosure process, so they are prepared.
“We’ve seen this coming. We have been reserving our excess proceeds since 2018. So, anything over and above that was foreclosed we have holding and waiting for the claims to come through,” Scheppe explained.
Typically counties will foreclose a property and use the money from the sale to pay the unpaid taxes on the property -- if any money was left over from the sale the county would pocket it instead of giving it back to the property owner -- something last week’s Supreme Court decision says is unconstitutional.
However, in Grand Traverse County prior to the lawsuits, any excess proceeds were transferred into their housing trust fund. The trust fund is used by organizations like Habitat for Humanity who utilize the funds to help existing homeowners renovate essential appliances.
Counties all over Northern Michigan will be paying up. Wexford County has $1.01 million set aside for an estimated 150 properties while Grand Traverse County has about $700,000 set aside for around 35 properties.
“It’s kind of up in the air with how the process is going to go. It may take some time, but we’re ready to do the right thing,” Scheppe said.
People who have been foreclosed on for delinquent taxes since 2013 are eligible to file a claim.
1:02 p.m.
Several counties in Northern Michigan and the U.P. now owe money to property owners who didn’t receive compensation from foreclosures.
This settlement comes after a verdict in a related Supreme Court case. The unanimous Supreme Court decision gave a 94-year-old Minneapolis woman a chance to recoup some money after the county kept the entire $40,000 when it sold her condominium over a small unpaid tax bill. The justices ruled that the county violated her constitutional rights by taking her property without paying “just compensation.”
The class action lawsuit in Michigan claims that counties in the U.P. and Western Lower Peninsula did the same thing to property owners here. The lawsuit alleges that these counties violated owners’ rights by not giving them the money from the sale of their foreclosed properties that exceeded the unpaid taxes, fees and other costs associated with them. These claims have become known as “surplus-proceeds claims.”
A website has been set up under guidance from the United States District Court for the Western District of Michigan to help people get their compensation. Under the settlement, the counties are not considered “guilty” but agree to pay compensation to avoid a court case.
If you think you are owed surplus-proceeds claims from a foreclosed property, click the link here. You can see the full list of counties below:
Alger County
Allegan County
Antrim County
Baraga County
Barry County
Benzie County
Berrien County
Calhoun County
Cass County
Chippewa County
Delta County
Dickinson County
Eaton County
Emmet County
Gogebic County
Grand Traverse County
Hillsdale County
Houghton County
Ingham County
Ionia County
Iron County
Kalamazoo County
Kalkaska County
Kent County
Lake County
Leelanau County
Mackinac County
Manistee County
Marquette County
Mason County
Menominee County
Missaukee County
Montcalm County
Muskegon County
Newaygo County
Oceana County
Ontonagon County
Osceola County
Ottawa County
Saint Joseph County
Schoolcraft County
Van Buren County
Wexford County
