Local governments can't keep extra cash in tax foreclosures

Jul 20, 2020

DETROIT, MI (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.