Lansing, Michigan; December 4, 2017: Michigan has turned the collection of unpaid property taxes into a system of official plunder, allowing bureaucrats to fatten their coffers by taking far more than what they are owed. Under the Michigan General Property Tax Act, officials can seize and sell the homes, businesses, and land of delinquent taxpayers—and keep all of the proceeds, not just the amounts needed to satisfy the owners’ tax debts.
Now, two victims—Uri Rafaeli and Andre Ohanessian—have asked the Michigan Supreme Court to hear their constitutional challenge to the abusive law. They are represented free of charge by Pacific Legal Foundation.
“We are taking this case to the state Supreme Court to stop bureaucrats from twisting the foreclosure process into a form of government sanctioned theft,” said PLF attorney Christina Martin. “Bureaucrats are kicking people out of their homes and stealing life savings to collect on debts as small as $8. This is not fair and it is not constitutional.”
Uri Rafaeli, 82, bought a modest rental home in Oakland County in 2011 as a family investment. After paying his 2012 and 2013 property taxes in full and on time, he was surprised to learn that taxes were owed for part of 2011. Miscalculating the interest due, he sent a payment that was short by $8.41. His penalty for this slight shortfall was huge: The county confiscated his property, sold it at auction for $24,500—and pocketed every penny.
Andre Ohanessian, 63, experienced a similar bureaucratic mugging. In 2003, he bought a vacant lot in Oakland County where he planned eventually to build two homes—one for his family and the other to sell. When he later moved to California, his tax bills weren’t forwarded and he fell behind. The county responded by auctioning his property for $82,000 and keeping all the money—even though his debt was less than a tenth that amount, just $6,000.
“It’s outrageous that they would steal all that money beyond what I owed,” said Andre. “The courts need to do justice and order this thievery to stop.”
“Michigan’s foreclosure racket is a particular threat to the elderly, sick, and people in economic distress,” said Martin. “This could happen to your grandparents. This could happen to you.” Indeed, in a separate federal court case this year, PLF represented a financially strapped church that had its youth-camp property seized and sold; an elderly couple who lost their home when they could not satisfy the tax debt; and an impoverished bus driver who lost his farm when his hospital bills swallowed the money he would have used for property taxes. Utilizing Michigan’s foreclosure law, Van Buren County sold all these properties for far more than the amount of unpaid taxes—and kept all the proceeds.
“Pacific Legal Foundation fights for individual liberty, including the Constitution’s protection against government theft of private property,” said PLF President and CEO Steven D. Anderson. “Secure property rights are the foundation of everyone’s freedom, and we look forward to vindicating this vital principle.”
The case is Rafaeli, LLC v. Oakland County. More information can be found at: pacificlegal.org/Rafaeli.
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Pacific Legal Foundation is a national nonprofit legal organization that defends Americans threatened by government overreach and abuse. Since our founding in 1973, we challenge the government when it violates individual liberty and constitutional rights. With active cases in 39 states plus Washington, D.C., PLF represents clients in state and federal courts, with 12 victories out of 14 cases heard by the U.S. Supreme Court.