Michigan county treasurer rebuked for seizing retiree’s home over $8 tax debt

By Andrew O’Reilly,

Officials in one Michigan county are demanding answers from their treasurer amid concerns that the county could be on the hook for millions of dollars in payments to former homeowners whose properties were seized under a tough forfeiture practice.

Oakland County commissioners sent an angry letter last week to Treasurer Andrew Meisner after the Michigan Supreme Court rebuked the county’s decision to seize one homeowner’s house after he underpaid his taxes by $8.41.

The commissioners said that they are forming a special investigative committee to look into the forfeiture practices and “make recommendations to protect the Oakland County taxpayers.”

“It appears your actions as Treasurer to foreclose on an Oakland County retiree’s property for $8.41 has exposed the county to serious risk,” the July 21 letter to Meisner, signed by board Chairman David Woodward and commissioners Mike Gingell and Helen Zack, said, according to the Detroit News.

Meisner did not immediately return Fox News’ request for comment.

The Michigan Supreme Court’s rebuke centers on the case of Uri Rafaeli, a retiree in his 80s whose 1,500-square-foot house in the Detroit suburb of Southfield was seized in 2014 and then sold for $24,500, with the county keeping all the earnings.

While Rafaeli’s case was stunning at the time, it is hardly unique: more than 100,000 homeowners in the state have fallen victim to an aggressive property tax law that legislators in Lansing passed two decades ago. Similar statutes have been passed in more than a dozen other states.

Uri Rafaeli had his Michigan property seized, put up for auction and sold after a mistake in calculating his property taxes left Rafaeli’s account delinquent by $8.41. (Courtesy of the Pacific Legal Foundation)

Act 123 of 1999 was meant to speed up the redevelopment of blighted properties amid Michigan’s economic woes, but critics of the statute say it has allowed county officials to act as debt collectors and line their coffers by retaining the excess revenue made by selling houses with unpaid property taxes — no matter how paltry the debt.

“When the government takes property to settle a debt, they have to give the extra money they make back to you,” Christina Martin, a lawyer with the Pacific Legal Foundation who was representing Rafaeli in his case against Oakland County, told Fox News last year. “It doesn’t matter what law Michigan passes, they have the constitutional obligation to pay back any more than they are owed.”

The state’s Supreme Court ruled earlier this month that while Oakland County had the right to seize Rafaeli’s house to satisfy the tax debt and “any interest, penalties, and fees,” it was not entitled to the full value of the home that it sold.

“Defendants were required to return the surplus proceeds to plaintiffs, and defendants’ failure to do so constituted a government taking under the Michigan Constitution entitling plaintiffs to just compensation,” Justice Brian Zahra wrote in the 6-1 decision.

The property that was seized from Uri Rafaeli by Oakland County. (Google Maps)

The property that was seized from Uri Rafaeli by Oakland County. (Google Maps)

Oakland County officials – and those in other counties across Michigan – are now worried that the high court’s ruling will open the floodgates for litigation as former homeowners whose properties were seized look to get the money from the sale of their seized homes.

During a court appearance last year, William Horton and John Bursch, the county’s attorneys, argued that a ruling in favor of Rafaeli would set a precedent that could ultimately bankrupt Michigan counties by forcing local governments to compensate all homeowners in similar situations. He estimated it would cost around $2 billion.

Michigan Supreme Court Justice Richard Bernstein did not appear to agree with the county lawyer’s assessment of the situation.

“The interpretation you gave was very dramatic: that this is going to end schools, and the counties are going to crumble, and society is just going to implode,” Bernstein said. “You have a situation where a person owed $8 and lost their house. I mean, how is that equitable?”

Martin, Rafaeli’s lawyer, had voiced hope that a ruling in favor of Rafaeli would not just be a victory for the retiree, but set a precedent in Michigan and across the nation — possibly leading to a ruling by the U.S. Supreme Court on a similar case in the future.

There are 14 other states in the U.S. that have statutes on the books similar to Michigan, and five of those states – Arizona, Colorado, Illinois, Massachusetts and Nebraska – allow private investors to make money off the sale of foreclosed homes.

“The government should not be making a windfall … when collecting unpaid taxes,” she said last year. “This is a practice that needs to come to an end.”

 

Source: https://www.foxnews.com

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2 thoughts on “Michigan county treasurer rebuked for seizing retiree’s home over $8 tax debt”

  1. State of WI. County of Langlade,..
    In 1981 a retired widow woman in her mid fifties, using the money she and her 4yrs earlier deceased husband had saved as a retirement nest egg, buys a lake property as retirement home, on a lake she’d grown up on as a child in northern WI.. This cottage sits on an approx 100×280 foot lake frontage lot. She is charged on real estate property taxes over the next nearly 40 years between $2800 to $3500 annually…
    This woman, an artist in her retirement, paints her heart out, traveling the state every summer to sell her paintings at craft shows to supplement her meager Social Security Retirement income, to be able to pay her real estate taxes which are, an extraordinary burden…
    After her passing at age 94, her family, in the process of selling the estate property, is required to do an appraisal and survey of the property, and of course go through all the paperwork on the estate. It is uncovered in county records by the buyer, that the property description, listed in the tax books with the county, was in error, and she had been charged annually, for a second lot, the same size as the first, which did not, actually exist (the original survey in 1929 was apparently, an error) and it was found thereby, she had been annually taxed, for two,, such lake lots of 100×280, not, one,, 100×280 ft lot…
    Upon checking with the (local) attorney handling the estate, the family is told that there is no recourse on this…that the county would do nothing, and once the annual tax year is closed, there cannot be any refunds, even though it was the county that was in error in over taxing this woman by 100% for near 40 years…
    This woman, was my mother.

    The State of Wisconsin County of Langlade, is in my opinion, at least,, I feel by any measure of what is right and wrong in this world, criminally liable, over this for stealing,, 2x the property taxes billed annually, for near 4 decades.
    The total (double) taxes paid by her during the near 40 years, equaled 50% of the property’s, sale value, at the time of sale, in 10-2019.

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  2. I have passed by the property in question many times. The property value in that area has skyrocketed many times over the years. Nothing new to see Oakland County is filled with money grabbing wannabe dictators. Everything is a money grab. Don’t catch a ticket in that County. They tax their residence almost out of existence and if you are unfortunate enough to own an older rural property that they have their eyes on get ready for trouble. First they will come in and low ball you. If that fails they will start fining you for every little thing they can create out of thin air. Bottom line these lying scum bags are on par with the same ilk that runs our country. Time to start thinking of retiring abroad.

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