Detroiters Who Lost Homes to Tax Foreclosure May Be Owed Millions

If you’re reading this, chances are good that you haven’t been pushed out of Morningside due to tax foreclosure. But many of your former neighbors were. If you know anyone who did lose a home to tax foreclosure, please let them know that they may be eligible for a substantial refund, thanks to rulings by the Michigan Supreme Court.

Between 2013 and 2020, Detroit properties were widely over assessed, leading to inflated tax bills that residents couldn’t afford. Then Wayne Co. auctioned them off for much more than the tax bills; in other words, they made a profit every time they sold a foreclosed property.

Thanks to the years-long efforts of organizations like the Coalition for Property Tax Justice, the Michigan Supreme Court ruled in 2020 that government entities can’t profit from the sale of tax-foreclosed private properties. This summer they also said the ruling applies retroactively to homes that were lost prior to December 22, 2020. Wayne Co. may be forced to pay out millions of dollars to residents and investors. These refunds do not fully compensate residents who lost their homes, but they are helpful. The money won’t be paid out automatically, though. You have to apply by March 31, 2025 to see if you qualify and how much you are owed.

It may turn out that speculators are the biggest winners under this ruling, but that’s a subject for another time.

For the details on who qualifies for the compensation and how to apply for it, read Outlier Media’s excellent article about it.

Due to unpaid taxes, Alicia Fernnadze was evicted from her childhood home. Image courtesy of Cydni Elledge/Outlier Media