Michigan Tax Sale Precedent Applies Retroactively, Justices Rule

Michigan counties can’t get out of certain lawsuits to recoup profits from tax foreclosure sales after the state high court ruled Monday that a case banning the practice applies retroactively.

In 2020, the Michigan Supreme Court ruled in Rafaeli LLC v. Oakland Co. that the state constitution bars counties performing tax sales from keeping cash beyond the amount of unpaid taxes due. Three years later in Tyler v. Hennepin County, the US Supreme Court recognized the federal Constitution also prohibits governments from keeping excess proceeds.

“There is no basis for this Court to decline application of Rafaeli to ...