May 10, 2016

by Caleb J. Shureb
Orlans Associates, P.C. – USFN Member (Michigan)

Michigan property tax foreclosure occurs when the property owner fails to pay their annual property tax assessment for three years. For example, delinquent 2013 property taxes would be foreclosed in 2016. As the delinquency progresses, the county treasurer is obligated to provide notice to both property owners and others who maintain interests in the property (such as mortgagees) through first-class, certified letters; newspaper notices; personal property visits; and postings upon the subject property. Lawsuits have been, on behalf of homeowners, asserting allegations that Wayne County failed to provide the required notices of tax foreclosure.

The Wayne County treasurer’s office has processed more than 100,000 tax foreclosures in the last decade. Often, mortgagees are not in the best position to determine if they have received all of the tax foreclosure notices under the law. While a lienholder will endeavor to protect its position from a tax foreclosure, it is not inconceivable that a security interest can be lost due to a homeowner’s failure to pay their property taxes. When this occurs, local legal counsel should be consulted.

The first step in determining whether the proper notices have been submitted by the county is the submission of a Freedom of Information Act (FOIA) request. Once those results are received, legal counsel can advise whether a post-foreclosure settlement is possible; whether a civil action should be filed; or if attendance at the auction to reclaim the property as the new owner is the best remaining option.

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