Michigan Property Owners Are Entitled to All Tax Sale Proceeds

Foreclosing tax authorities can’t deduct legal expenses for post-sale litigation when disbursing remaining proceeds of tax sales to former property owners, the Michigan Court of Appeals ruled.

The case raised an issue of first impression on the interpretation of Michigan’s General Property Tax Act. The relevant parts of the statute, “when read in harmony,” don’t authorize foreclosing governmental units to recover attorneys’ fees, Judge Kirsten Frank Kelly wrote in a Monday opinion.

The ruling answers one of the many open questions following the Michigan Supreme Court’s 2020 ruling that former owners of properties sold at tax sales have a ...