Michigan Supreme Court: Local Governments Can't Keep Extra Cash In Tax Foreclosures

Jul 18, 2020

FILE - This undated file photo shows a home in Southfield, Mich., that was foreclosed and sold for $24,500 after the owner failed to pay $285 in taxes, penalties and interest. Local governments in Michigan can't keep surplus cash from the sale of tax-foreclosed properties, the Michigan Supreme Court said Friday, July 17, 2020. The decision could lead to waves of payments to former owners across the state.
Credit (AP Photo/Ed White File)

DETROIT (AP) — The Michigan Supreme Court says local governments can't keep surplus cash from the sale of tax-foreclosed properties. It's a sweeping decision that could lead to waves of payments to former owners. State law allowed county treasurers to keep money left over after overdue taxes finally are paid from a property sale. The Supreme Court said the practice is illegal under the Michigan Constitution. The case centered on two sales in Oakland County. In one deal, a man owed $6,000 in back taxes, but the county also kept a $76,000 surplus from the land sale.