Tax foreclosure under Michigan’s General Property Tax Act (the GPTA); Whether defendant-county violated plaintiff’s Fifth Amendment constitutional rights by retaining excess foreclosure funds; Tyler v Hennepin Cnty.; Rafaeli, LLC v Oakland Cnty (MI); Hall v Meisner; Nelson v City of NY; Whether plaintiff followed the necessary procedures under the GPTA; MCL 211.78t(2); Whether a 5% sales commission was reasonable

[This appeal was from the ED-MI.] The court held that because plaintiff-taxpayer (Howard) never undertook the Michigan GPTA’s procedures to recover the surplus from the sale of her foreclosed property in excess of her unpaid taxes on it, she forfeited her claim. Howard failed to pay her property taxes, and defendant-county foreclosed. She claimed that it kept the money from the sale that was over and above what she owed, and she sued alleging a “taking” under the Fifth Amendment. The district court dismissed the case for failure to state a claim. The court noted that in 2020 “the Michigan Supreme Court ruled in Rafaeli “that Michigan’s failure to compensate property owners for the gap between their tax debts and the price realized from foreclosure sales of their property violated the Takings Clause of the Michigan Constitution.” And the court later held in Hall “that the same law violated the Takings Clause of the U.S. Constitution.” Michigan amended the GPTA to allow taxpayers to recover “any surplus value in their foreclosed properties.” In this case, defendant complied with the required notice and followed the required procedures. The court concluded that because Howard never undertook the statutory procedure to claim surplus proceeds set forth in MCL 211.78t(2), she “forfeited her claim to” them. The court also found that the “key question implicated by the 5% sales commission” that is subtracted from the surplus “is not whether it deprives the owner of just compensation; it is whether the amount gives the State more than its due. It does not.” It determined that nothing in the complaint showed that this 5% commission was “anything more than a reasonable fee to compensate the county for this real estate work or to incentivize the county to sell the property at the highest price possible. The fee also finds company among historical and modern precedents.” Affirmed.