Property Owners Beware: You Could Be in Risk of Property Tax Foreclosure and Government-Sanctioned Theft
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Property Owners Beware: You Could Be in Risk of Property Tax Foreclosure and Government-Sanctioned Theft
The Michigan Supreme Court has a tough call to make involving property tax foreclosures and the amount of money the government can legally “take'' from you. According to the Michigan Department of Treasury, Michigan counties can foreclose on homes after property taxes are delinquent for three years. This means that if you are a property owner and are behind on your property tax payments, you can be at risk of having your property foreclosed and a lawful taking, or an attorney, Christina Martin calls it: “government-sanctioned theft.”
Consequences of Property Tax Foreclosure (in Michigan)
As of right now, the law allows the state of Michigan and its counties to foreclose and auction off homes that have property tax debt. What’s worse is if the property sells for more than the homeowner originally owed in debts, the government will keep the surplus amount and when counties collect back property taxes, the law allows them to tack on hefty interest — up to 18% — plus fees! This violates the “fairness and justice” principles of the Takings Clause from the Fifth Amendment.
According to Cornell Law School, The Fifth Amendment of the United States Constitution “requires the government to compensate citizens when it takes private property for public use.” Within that Fifth Amendment, there is a provision known as the ‘Takings Clause’, which states that "private property [shall not] be taken for public use, without just compensation."
While the Fifth Amendment by itself only applies to actions by the federal government, the Fourteenth Amendment extends the Takings Clause to actions by state and local government as well.
Another “Government-Sanctioned Theft”
This is exactly what happened to Chantae Fowler, who found herself $10,000 behind on her property taxes on her home in Wayne County, Michigan. Fowler tried getting an extension through the Wayne County Treasurer, unfortunately, she was too late, and her home had already gone into foreclosure. Someone offered $43,000 for her home, which covered the $10,000 debit balance she owed, but the county pocketed the remaining $33,000 leaving her with nothing. Unfortunately, Fowler’s situation is not the first time that this has happened. Cases of government “takings” have affected thousands of Americans within the United States—and sadly, many of them lose. Many property owners affected by this are outraged and feel this is unfair, (as they should). Luckily dedicated attorneys such as Christina Martin wasn't going to allow that.
Taking a Stand
According to the case Rafaeli LLC v Oakland County, the Takings Clause “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. Justice is the government collecting only what it was owed. Fairness is the return of any excess equity monies to those who have had their properties taken and sold. Neither exists here”.
The 2017 lawsuit led attorney Christina Martin to state that Michigan’s property tax foreclosure laws are unconstitutional and amount to “government-sanctioned theft.”
She also told the Supreme Court justices that these cases break the Takings Clause which according to Martin “means that when the government is collecting on a debt, a property tax debt included, the government can take the property and sell it, but then they can only keep as much as it’s rightfully entitled to.”
The case of Rafaeli LLC v Oakland County concluded with the court ruling against them “dangerously expanding civil asset forfeiture law to include non-criminal activities, and upholding this bureaucratic theft.” The case is still pending.
Tell us your thoughts in the comment box below about tax foreclosure, do you feel they are unfair, or unjust?
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