A Michigan retiree won a partial victory when the state Supreme Court lambasted Oakland County officials, who seized his house after he underpaid his taxes by $8.41, then sold it and kept the entire proceeds for themselves.
The court ruled that while state law allows local politicians to snatch and sell homes for unpaid tax debt, even if it is as little as $8.41, the homeowner is entitled to any net proceeds from the sale after the debt is paid.
In the case of Uri Rafaeli, who filed the suit, the amount will be settled by a lower court, but it could be around $24,500, which is around what Oakland County pocketed after they evicted him from his home and auctioned it off his over the $8.41 underpayment.
A retired engineer, Rafaeli purchased the home in 2011 for $60,000 as a rental property. He made his usual tax payments to Oakland County but miscalculated the interest by $8.41.
Oakland County pounced on the math error, seizing the home and selling it for only about a third of what he paid for, and pocketing the cash for themselves.
Not only did Rafaeli have his property stolen over $8.41 and lost a stream of rental income, Zillow estimates the property to be worth $128,000, meaning he loses out on hundreds of thousands of dollars in future income from selling his property.
Reason magazine reports a 1999 state law allows county treasurers to evict citizens from their homes, seize the property and auction it to settle tax debts. There is no lower limit on what can trigger the seizure, leading to Rafaeli losing his property after underpaying his taxes by $8.41.
The law was intended to give local governments the power to seize abandoned properties that pose a public hazard, such as the glut of abandoned homes littering Detroit.
But local officials appear to be using the law, and the lack of a measure requiring them to return surplus funds, to flood local government coffers with cash by seizing homes over ridiculously small debts.
In all, Oakland County has snatched and sold 11,000 properties.
Oakland County defended the decision to pocket the cash for themselves, comparing taxpayers to messy children who need to be disciplined and claiming the prospect of losing your home, and being left penniless is necessary to keep people paying taxes.
Other Michigan counties were just as cruel and shameless.
“When Cass County was going through the process of seizing a multi-million-dollar home over a small, unpaid tax bill, the county treasurer and other officials exchanged emails joking about using the lakefront property for cookouts,” Reason reports.
The United States Constitution prohibits governments from seizing property without just compensation. The Michigan Supreme Court’s 6-1 ruling found that keeping $25,000 sale amount for themselves, instead of the $8.41 owed, was unjust and the “plaintiffs are entitled to the value of those surplus proceeds as just compensation.”
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Michael Brigham
Michael Brigham has written for American Action News since the summer of 2019. His areas of expertise include foreign affairs, government, and politics, but regardless of the subject matter, he has a nose and an insatiable appetite for news. In his free time, he enjoys reading nonfiction, watching a mix of comedies and true crime documentaries, and spending time away from the swamp hiking in the foothills of the Appalachian Mountains.
So how is $25,000 just compensation for property worth over $120,000? In addition, did the county notify him of the tax deficiency and how long was it overdue?
I’ve hear of banks and counties auctioning off properties for a pittance of what they’re worth to cronies which pocketing the proceeds while billing the original owners for the remainder owed. It’s a criminal racket.
Even if he got the $25,000 from the sale it is NOT Just compensation but THIEVERY. Local government offices with such underhanded tactics by personnel need to be shut down and the officials indicted for grand theft.
i agree these thieves need to give his house back to him and go to jail
whAt briAn sAid i’m stunned thAt A person cAn eArn $8890 in 1 month on the . hAve you reAd this site
Ok, returning the $25,000 is A step, now about punitive damages…….
The City Manager, who is a lawyer, fully aware of the US Constitution, knowingly violated the “Taking Clause” of the Fifth Amendment of said Constitution. Civil penalties must be assed, including restitution, and Treble Damages. $24,000 restitution, $72,000 in Treble Damages, court costs, and relief from further tax payments should set the City back on it’s collective heels!
Fix your damn webpage. A stupid weathertech ad covers the article and prevents me from reading it.
Only you are affected it appears. Virus or malware issue? FIX YOUR PC!
Me too. Very annoying.
Michigan is a terrible state, bad laws, the most unfriendly people. I lived in Lansing, it was a snake pit!
Michigan–a great place to leave.
These “officials” are a criminal RICO organization. Round them up, try them, and hang them like in the old days when justice was swift.
EVERY person in the tax assessor’s office needs to have their tax records audited, and if any of their taxes are under paid by even ONE CENT, take their houses out from under them and put all their belongings out on the street.
Well said Cindy.This is why “we the people “” do NOT trust politicians. Some years ago the two contestant for a New Jersey state seat ,each spent over $500,000 on their campaigns.We presumed the winner expected to get his money back with a profit . The looser was really a LOOSER.
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I’m not familiar with Michigan law, but surely there are provisions that allow the owner the opportunity to pay back taxes without snatching the property away form the owner in the middle of the night.
I live in one of the most corrupt states there is, NJ. I also have family and friends in many other states. Every state we all live in, including corrupt NJ all have every law you mention above. Plus one additional law that states the owner MUST be notified when and where the auction will take place, so the owner can participate in the auction to try to get his property back. There also must be multiple public notices given in the news print and local radio, if there is one,and local TV, if there’s a locally broadcast station. Notice must be given 3 times, after the seizure is finalized in court, After the home owner is notified a minimum of 3 times. I’d also check out who bought the house, public record. And most auctions of this type must be a cash sale. No waiting for a mortgage approval. who’s family member or friend bought the house at that ridiculously low price.
Grand Theft House???
This poor guy had a piss poor attorney.
Have any of the officials been charged with grand larceny? If not, why?
Seems as if the State Legislature is to blame here, having enacted seizure legislation without obviously needed safeguards. As to the antics of local officialdom/officialdumb, who is kidding who, regarding a case of what could, in polite terms, be properly described as “overkill”.
It’s government overreach such as this that can eventually lead to revolutions. Remember, it was for similar stunts such as this that the American colonists back in the 1700s took up arms against their government and ended up founding the United States. For any government, whether federal/state/local, to find ways to legally steal a citizen’s property for their own gain is reprehensible and definitely something that deserves massive changes come election time.
Typical Democrat thieves; took advantage over eight bucks.
The home owner had someone downtown angry at him.
These assholes need to have their homes taken without just compensation and see they yell about how wrong this is. A bunch of f::ken scabs who think they can do as they please! Throw them out and beat them with bats! Nuff said!
This is how Democrats govern. They are either oblivious to those who don’t pull their own weight or they persecute those who do. Did they confiscate his property in order to give a sweetheart deal in its subsequent sale to a friendly Democrat? Or did they just overreact because they could and because they had control?