County Says Seizing Home Over $8.41 Tax Debt Was OK Because Counties Need Money

Discussion in 'The BS Topic' started by danbrennan, Nov 9, 2019.

  1. danbrennan

    danbrennan Veteran Member Lifetime Gold Member

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    A case before the Michigan Supreme Court, making the national news. Hopefully the justices put a stop to this, and/or the legislature fixes this. The county's arguments are just silly. This is about a house in Southfield, that a guy bought as a rental.

    https://reason.com/2019/11/08/count...because-counties-need-money/?utm_medium=email

    "Arguing before the Michigan Supreme Court, attorneys for the county that pocketed nearly $25,000 from forfeiting Uri Rafaeli's property over a $8.41 tax debt argued that it's not really about the property—it's about the money."

    "Rafaeli's situation is awful but hardly unique: Under the terms of a state law passed in 1999, county treasurers in Michigan are allowed to seize properties with unpaid taxes, settle the debt, and keep the remainder for their own budgets. The Pacific Legal Foundation, a nonprofit law firm, is challenging that law, arguing it violates provisions in both the Michigan and U.S. Constitutions."

    ""A ruling for the plaintiffs will ruin local governments," warned Bursch. "That will come right out of schools, roads, firefighters, and other basic services.""

    ""You have a situation where a person owed $8 and lost their house. I mean, how is that equitable?""

    ""The counties don't want the property," argued Bursch. "They want the money." Bingo."

    "In Oakland County, for example, the special budgetary fund that contains revenue from tax foreclosed properties contained more than $196 million last year, according to the county's most recent comprehensive annual financial report."

    "The same document details plans to use the DTRF for a number of pet projects, including the construction of a new animal shelter and adoption center."
     
  2. Smokey15

    Smokey15 Veteran Member

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    All over the news here in Michigan. Judge Bernstein, who is presiding over the case, can't believe that the county stoops so low. BTW, Judge Bernstein is blind, as far as eyesight, but not to justice.
     
  3. dale68z

    dale68z Veteran Member

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    No one has tried to take my property. Why? I pay the taxes I owe on them. You cannot tell me the guy had no idea he owed taxes or had no opportunity to correct his mistake.
     
  4. roadrace2

    roadrace2 Veteran Member

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    Its one thing to owe taxes, its another for the government to infringe on your rights as an owner. Governments will do as they please and try and get a way with a frivolous argument such as "its about the money". You owe $8 grand in taxes? Ok........why can the government take a $25000 property, pay themselves off, then keep the rest? Is this not theft? Isn't the government supposed to assist the people? Not bully them with criminal activity and get away with it??? This is how I see it.
     
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  5. gramps

    gramps Veteran Member

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    At first I thought what’s the deal dude owes A f ton in back taxes. Gets what he gets. Once I read it again and realized it was $8.41 Literally 8 bucks and was not thousands or 8.4million, that’s just stupid. Granted I’m sure the dude got a letter, probably several, stating he was owing so he still kinda earned what he got. There has to be a line in the sand somewhere. I mean how much back taxes can be owed before they can take it? If you take that mark from $0 and raise it to say $10,000 then 10,000 will become the new “$0” as everybody will just let taxes go until they are behind $9,999.

    What I really don’t like about property taxes is that they keep going up. I paid x amount for my house, I should pay the tax on that amount and that’s it.
    If I go to Best Buy and purchase a 70” badass tv I pay the tax on it at the time of purchase. 2 weeks later B.B. raises the price, I don’t get a bill for an increase in taxes because the tv is now worth more. So why should a house be any different?

    Seems like the gov is worse than a child with money. Spending it fast or faster than they can get it, do as little as possible to earn it. Whine because they don’t have enough of it. Cry because they lost it. Then come back for more.
    At least most children learn from those mistakes and figure it out.
     
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  6. 70lt1z28

    70lt1z28 Veteran Member Gold Member

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    I think the argument, not that I'm on board with it, is that the services (police, fire, teachers, city-county-state, etc) the government provides don't stay set to when you bought your house. Those costs are going up. That's like saying the local cop will always get paid the exact same as when he got hired. Even worse,not just when he got hired, but what he got paid when you bought your house!

    The real problem is transparency. It's very difficult to tell what exactly the tax revenue coming in is and where its coming from and where it's going. Since I bought my house, they have built two major shopping centers in my city based on the tax revenue they will bring in. Since then, there has still been the never ending levy increases to provide for the police, fire, road, sewer etc. improvements required to support those malls. Not to mention the school levies. When you bring it up at the meetings, the usual answer is "think how bad it would be if those malls weren't there!".
     
    Last edited: Nov 9, 2019
  7. Fbird

    Fbird Veteran Member Lifetime Gold Member

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    yeah I know the communication methods of many GOV's....send some bs letter to the home owner....send 2 more.... OK it's ours!!! Uh he dumbass.....you sent it to the wrong address....typo...XXXXX OAK ST........NOT XXXXX OAK ct.

    typical bs....but surely they will figure it out it is only difficult for those IN GOVERNMENT!!!...lol
     
  8. ol' grouch

    ol' grouch Veteran Member

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    I've been having fits with the county here. When I bought my house, I put a circle drive in. I made sure to get the proper permit and follow the county engineers requirements. When it was built, my house was on a slight rise above the road. Fast forward 70 years and frequent repaving has raised the road to where I'm below the level of the road. The ditch is long filled in. My yard floods after a heavy rain but my neighbors house floods. I've contacted them repeatedly to clean the ditch and each time, I've been told they don't have a permit for the circle drive. I've sent at least 5 copies of it to them via e-mail.

    So I can see the government being inefficient. As for seize a house for a little over $8, I think the argument against that is lack of due process of law. I can't imagine that much variance in value would be the test of law. I guess we'll see when the court rules.
     
  9. danbrennan

    danbrennan Veteran Member Lifetime Gold Member

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    This was an egregious action by the county. And not an isolated case.

    https://reason.com/2019/11/06/a-mic...ed-his-property-sold-it-and-kept-the-profits/

    "In August 2011, Rafaeli purchased a three-bedroom, 1,500-square-foot home in the predominantly African American community of Southfield, Michigan, a lower-middle-class suburb just north of Detroit. "The investment was good to the state economy, and [at] the same time, it may produce a good rent for my retirement. A 'win-win' situation," says Rafaeli, who lived in neighboring Macomb County at the time. (He no longer lives in Michigan.)"

    "The $60,000 purchase was recorded by the Oakland County Register of Deeds on January 6, 2012. About six months later, in June 2012, Rafaeli was notified that he had underpaid his 2011 property tax bill by $496. Rafaeli made subsequent property tax payments on time and in full—and, in January 2013, he attempted to settle the unpaid tax debt, according to court documents. "

    "But he made a mistake in calculating the interest owed, resulting in another underpayment of $8.41. "

    "A little more than a year later, in February 2014, Rafaeli's rental property was one of 11,000 properties put up for auction by Oakland County. It was sold for $24,500 in August of the same year—far less than what Rafaeli had paid for the property just three years earlier. "

    "Today, real estate service Zillow, which rates the Southfield region as a "hot" market in the Detroit region, estimates the property is worth $128,000, But Rafaeli has missed out on reaping a financial reward for being an early investor in the area."

    "At the root of those seizures is a 1999 update to Michigan's general property tax statute. That legislation, Act 123 of 1999, gave Michigan's 83 county treasurers the authority to act as the primary agents for handing the foreclosure and auction of properties with unpaid taxes. It also expedited the process for seizing and auctioning homes that owed taxes, allowing county treasuries to sweep aside liens and other speed bumps in the tax foreclosure process."
     
  10. danbrennan

    danbrennan Veteran Member Lifetime Gold Member

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    And,

    "The same thing happened to Romualdo and Erica Perez, a father/daughter duo who bought a four-unit apartment building and an adjacent, abandoned single-family home in Detroit in 2012. Even though they were living in New Jersey at the time, Romualdo would drive 11 hours to Detroit on weekends to fix up the properties in the hopes of eventually relocating there to be closer to other relatives. Romualdo and Erica planned to live in the house and earn a living by renting the small apartment building."

    ""Every bit of money we saved and every spare minute we had went to fixing the house," Erica says. "The plumbing, the electricity—everything.""

    "But the first year they owned the property, they underpaid their property taxes by $144. County tax records show that they made full payments, on time, every subsequent year. But Wayne County never informed them of the unpaid debt, they say, because the notices were sent to the wrong address. But the county should have known the correct address for the notices because more recent property tax payments indicated the proper address, says Martin."

    "In 2017, the county foreclosed on their property, sold it for $108,000, and kept the excess equity beyond the $359 owed in back taxes, fees, and interest. They, too, are suing the state with the assistance of the Pacific Legal Foundation, in a case that's separate from Rafaeli's."

    https://fee.org/articles/home-equity-theft-how-a-man-s-home-was-seized-over-841-in-unpaid-taxes/

    "In the American legal system, there is a maxim: the punishment must fit the crime. But when considering the small amount by which the Perez family underpaid their property taxes, this seems like a disproportionate punishment to receive."

    "The government is allowed to seize property in order to settle a debt owed by an individual. However, it isn’t allowed to take more than it is owed. And in the instance of the Perez family property, Wayne County kept every penny it earned from the sale of their property—a practice known as home equity theft."
     

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