Michigan property owners challenge unconstitutional home equity theft claims process

In 2019, a dying friend gave Kari Beeman a small home in Michigan’s Muskegon County. Although the property had significant tax debts, Kari worked to pay them off, hoping to eventually own the property outright. Kari thought she paid the taxes in full, but in 2021 the County foreclosed over a $4,000 debt she didn’t know she owed. The County sold the property for $46,250—then took everything for itself. In other words, the government pocketed over $42,000 more than Kari owed.

In 2020, the Michigan Supreme Court held that it is unconstitutional for the government to take more than it is owed in taxes, penalties, interest, and fees. The U.S. Supreme Court echoed that finding in 2023 in the landmark case Tyler v. Hennepin County. Rather than abide by these rulings and honor Michiganders’ constitutional rights, the State enacted a convoluted claims process to evade those rules and enrich the government. Under this state law, property owners must precisely follow the claim process to recover surplus proceeds from the forced sale of their property—and they must stake their claim before the property is even sold.

In practice, the process looks like this:

1. The clock starts each year on March 31 when the government takes the title to tax-delinquent properties.
2. The former owners have until July 1—a three-month window that closes before most owners even realize what has happened—to track down, fill out, notarize, and properly file a specific form that serves as formal notice of intent to claim remaining proceeds.
3. The government sells the property between August and November, after which the County treasurer notifies former owners of any excess proceeds.
4. The former owners must then file a motion in circuit court between February 1 and May 15 of the following year to recover any excess proceeds—a year or more after losing their property.
5. Only then is the County obligated to return property owners’ rightful surplus to those who have survived the claims process.

Failing to exactly follow any part of the process—even if every other step is done correctly—allows the government to keep the entire sum. Most Michiganders inevitably make a misstep while navigating the opaque system, allowing counties to claim they kept the money legally and that property owners just flubbed their opportunity to recover their own money.

Predictably, counties across the state are confiscating millions of dollars from property owners. For example, Manistee County pocketed over $102,000 more than it was owed after a single mother—who was given incorrect information on her tax debt by a government employee—mistakenly underpaid and lost her home. And in Alger County, the local government foreclosed on a 53-year-old woman’s home just 10 days after her sudden death, then denied her daughter’s appeal by claiming that state law allowing deadline extensions after a death somehow applied only to pre-death claims.

In Muskegon County, Kari only learned she could claim the surplus proceeds after a lawyer contacted her. Although she tried to follow the State’s labyrinthine process, it failed her—and enriched the government at her expense—in violation of the U.S. Constitution. She submitted a claims form four months after the County sold her property, but because the State’s deadline came two months before her home had even been sold, the County told her she had filed the form six months late and forfeited her chance to claim the money.

When Kari sued to challenge the State’s rigged system, the Michigan Court of Appeals claimed that the County hadn’t violated her rights because she technically had the chance to claim her money through the State’s convoluted claims process—the very process she is challenging as unconstitutional.

But the government cannot escape its duty to pay just compensation when it takes private property by forcing property owners to chase down their own money through complicated processes with unreasonably short deadlines. The Constitution explicitly requires the government to pay just compensation when it takes private property to collect unpaid taxes.

Represented at no cost by Pacific Legal Foundation, Kari and four other former property owners from Muskegon County petitioned the U.S. Supreme Court to strike down Michigan’s illegal claims process and affirm property owners’ constitutional right to just compensation. Unfortunately, the U.S. Supreme Court denied the petition for certiorari on January 12, 2026.