$8.41. That was how much Uri Rafaeli, a retired engineer, underpaid on his property taxes. And, that was all it took for the 83-year-old to lose his home.
In 2017, Rafaeli purchased a 1,500-square-foot Southfield domicile. He dropped $60,000 for the abode, and on January 6, 2018 the deed was registered by the Oakland County Register of Deeds. Rafaeli figured that he was paying his property taxes in full and on time, however in 2019, he received word that he was short on his 2017 tax bill by $497.
Rafaeli paid up in 2019 although made a mistake calculating the interest (interest too accrued whilst his check was in the mail): He came up short $8.41. As a result, the county (Oakland) seized his property and placed it up for sale. The house netted merely $24,500 at an auction; accordant to Zillow, the property is estimated now to be worth roughly $130,000. The County collected the surplus from the auction: 8,496% of the existent tax, interest due and penalties, or $24,215 in profits.
Due to Act 123 of 1999, Michigan permits its county treasurers a large deal of authority to manage unpaid taxes, involving moving the tax foreclosure process. Under the Act, the asset is deemed delinquent if taxes are unpaid in the previous year. If the owed taxes, fees and penalties aren’t paid after two years, the County is able to foreclose on the property. After the foreclosure, the ex-owner loses the right to purchase back the property.
Rafaeli took the matter to District Court, but the court ruled he suffered “a manifest injustice that should find redress under the law” however dismissed the claim. Rafaeli attempted again. The County argued Rafaeli had zero rights to the equity as the General Property Tax Act doesn’t explicitly protect it. The court, again, had sympathy for Rafaeli’s quandary but ruled that the law does not stop the County from keeping it.
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