Tuesday, September 15, 2020

What Happens to Surplus Proceeds from Foreclosure Sale?

real estate lawyer Ann Arbor

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

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