What Happens to Surplus Proceeds from Foreclosure Sale?

On July 17, 2020, the Michigan Supreme Court issued an important decision in Rafaeli, LLC and Andre Ohanessian v. Oakland County and Andrew Meisner that will impact county budgets and tax-foreclosure protocols.

In the case, Plaintiff Rafaeli owed $8.41 in unpaid property taxes from 2011, which grew to $285.81 after interest, penalties, and fees. Oakland County and its treasurer foreclosed on Rafaeli’s property for the delinquency, sold the property at public auction for $24,500, and retained all the sale proceeds in excess of the taxes, interest, penalties and fees. Plaintiff Ohanessian owed approximately $6,000 in unpaid taxes, interest, penalties, and fees from 2011. Like Rafaeli’s property, defendants foreclosed on Ohanessian’s property for the delinquency, sold his property at auction for $82,000, and retained all the proceeds. Plaintiffs claimed that the defendants’ retention of the surplus proceeds constituted a taking of their properties without payment of just compensation as required by Michigan’s Constitution. They filed a lawsuit and asserted a claim referred to as “inverse condemnation” against the defendants.

Find out how the court ruled in this particular case here!

Have questions about your rights? Contact PSED, to real estate lawyers in Ann Arbor schedule an initial consultation! 734-665-4441

Michigan Supreme Court Rules That Oakland County Treasurer Cannot Retain Surplus Proceeds From Tax-Foreclosure Sale

On July 17, 2020, the Michigan Supreme Court issued an important decision in Rafaeli, LLC and Andre Ohanessian v. Oakland County and Andrew Meisner that will impact county budgets and tax-foreclosure protocols. In a detailed opinion by Justice Zahara joined by 5 other justices (Justice Viviano wrote a separate concurring opinion), the court unanimously ruled that Oakland County unlawfully retained the surplus proceeds from the tax-foreclosure sale of plaintiffs’ properties that exceeded the amount they owed in unpaid delinquent taxes, interest, penalties and fees. The court found that defendants’ retention of those surplus proceeds is an unconstitutional taking without just compensation under Article 10, Section 2 of the 1963 Michigan Constitution (referred to as the “Takings Clause”).

Learn more here!

Have questions about your rights? Contact an experienced real estate lawyer in Ann Arbor to schedule an initial consultation! 734-665-4441

Everything You Need to Know About Limited Liability Company and Subchapter S Corporation

Both entities are created under the laws of the State of Michigan. Articles of Organization are filed to create an LLC; the end of its name must use “LLC.” Articles of Incorporation are filed to create a Corporation; the end of its name must use “Inc.” or “Corp.” Please note that a Michigan Corporation becomes an S Corp when it files an election for tax status with the IRS.

Owners of an LLC are called “members” whereas owners of S Corp are called “shareholders.” Members can choose to manage the LLC themselves. On the other hand, shareholders must elect a board of directors, who then choose the officers to manage the S Corp. The shareholders can elect themselves to the board and then choose to become the officers of the S Corp.

Learn more here!

If you’re interested in learning more about business law or whether LLC or S Corp is best for your new business, please call Marty Bodnar at 734-665-4441 or email him at mbodnar@psedlaw.com. 

Starting a Business? How to Choose Between Limited Liability Company and Subchapter S Corporation

People often contact PSED to start a business after a career in corporate America. Usually, these people just want to keep it simple and want an entity that will have limited liability, meaning that creditors can’t go after their personal assets but can only go after the assets of the new entity.

The two types of legal entity that offer simplicity along with limited liability are Limited Liability Companies (“LLC”) and Subchapter S Corporations (“S Corp”). 

Learn more!

For more information or to speak with us about your legal issue or business law questions, please contact us in Ann Arbor at 734-665-4441. To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.

What Are the Payroll Protection Program Rules on Payroll?

The Application confirms the PPP rules on payroll. Payroll includes cash compensation, employer contributions for group health insurance and retirement plans, and state and local taxes assessed on employee compensation. Under PPP rules and the Application, payroll doesn’t include compensation in excess of $100,000, qualified sick leave under the Families First Coronavirus Response Act or federal income taxes and FICA withheld from an employee. 

Learn more!

Have Questions About the Payroll Protection Program?

If you have questions about the Payroll Protections Program legislation, or need advice about your business, please contact us today at (734) 665-4441. 

What Are the Payroll Protection Program Loan Forgiveness Rules?

The Application confirms the public rules on PPP forgiveness. Loan forgiveness depends on how the loan proceeds are spent over an 8-week period. To qualify for forgiveness of the entire PPP loan, at least 75% of it must be spent on payroll, while up to the remaining 25% of it must be spent on mortgage interest, rent, and utility payments incurred before February 15, 2020.

Read more here!

Have Questions About the Payroll Protection Program?

If you have questions about the Payroll Protections Program legislation, or need advice about your business, please contact us today at (734) 665-4441. 

Is Mortgage Relief Available?

Are you struggling to pay your mortgage?

There may be some relief available!

Upon a simple affirmation that the borrower is experiencing a financial hardship due, directly or indirectly, to the Covid-19 emergency, and submitting a request to the loan servicer, the borrower may obtain a forbearance without a fee or penalty.  Section 4022(b)(1).  In fact, the statute states that the servicer “shall,” with no additional documentation and with no fees or penalties, provide the forbearance.  Section 4022(c)(1).  As such, it is a broad order that allows many borrowers to obtain a loan forbearance.  The period of the forbearance is 180 days, which may be extended upon the borrower’s timely request for an additional 180 days.  Section 4022(b)(2).  This forbearance is available even if the loan had been delinquent.  The borrower can also shorten the forbearance period upon request.

In a typical forbearance, a borrower would not have to pay principal and interest payments on a loan.  The legislation states that during the forbearance period, no other fees, penalties, or interest shall accrue other than what would otherwise apply.  Section 4022(b)(3).  The legislation, however, provides no further details about the forbearance.  Congress may pass clarifying legislation or Fannie and Freddie may issue guidelines for servicers regarding the forbearance details.

Nevertheless, a forbearance does not reduce or forgive the principal owed, and interest would typically continue to accrue at the loan rate.  Moreover, a forbearance would not typically excuse payment of taxes or insurance, so if those are included in a monthly payment which is made to an escrow account, the borrower should consider continuing to make that portion of the monthly payment.

Have Questions About Your Mortgage?

If you have questions about your rights under the federal stimulus legislation, or need advice about negotiating the terms of your lease, please contact a real estate lawyer in Ann Arbor at PSED. 734-665-4441