Northern Michigan Counties Face Class Action Lawsuit Over Collection of Back Property Taxes

Counties and treasurers across the state of Michigan are facing a class action lawsuit over the way they collect taxes that are long overdue.

59 counties and treasurers have been notified they’re facing the lawsuit so far.

There’s a hearing on Friday in Charlevoix for the northern Michigan counties involved.

Attorney Philip Ellison says when counties foreclose on and sell property to collect taxes people have owed for a while, the county should only keep the amount that’s owed to them and not the excess.

Ellison has been filing the lawsuits against Michigan counties including Wexford, Osceola and Missaukee.

He says for example if someone owes $2,000 in property taxes, but their foreclosed property sells for $50,000, the $48,000 difference should go to the property owner, not the county treasurer.

Treasurers argue they give people multiple notices and opportunities to pay back taxes before resorting to the option of foreclosure.

“It’s our position with these class action lawsuits, is that the county treasurers need to make refunds to folks who have had their property foreclosed upon where the value of the property is worth more and sold for more than what the tax debt actually is, it’s not the government’s to keep the balance,” said Ellison.

We did reach out to the attorney who’s representing many of the counties in northern Michigan but have not heard back.

The Michigan Supreme Court is currently hearing a case surrounding the same issue.