Tax Sale Surplus Return Sufficient, Michigan County Tells SCOTUS

When government seizes and sells a home over unpaid taxes, returning to the owner the surplus proceeds from the auction fulfills its constitutional duty of “just compensation,” Isabella County, Mich., told the US Supreme Court on Monday.

The county’s brief rebutted a homeowner’s estate seeking the property’s full market value in a case that can define the limits of the court’s landmark ruling on foreclosure equity. The high court’s decision could also provide guidance to local governments nationwide on the financial obligations triggered by their tax foreclosures.

Isabella County said the requirement to return an auction’s “overplus” is deeply rooted ...