Snoozing Michigan Property Owner Forfeits Title To Vacant Lot Over Failure To Pay $7 Late Fee On Her Local Real Estate Taxes

In Hillsdale County, Michigan, Michigan Capitol Confidential reports:

• A vacant lot owned by a Jackson woman was foreclosed by Hillsdale County because she failed to pay a $7 late fee on her property taxes.
  
  A Freedom of Information Act request found that Pam Baker, a Jackson resident, owed Hillsdale County $7.70 in interest and late fees for delinquent taxes from 2013 on land she owned near Lake LeAnn in Somerset Township.
  
  The 2013 taxes on the property, which she owned since 2000, were due on Feb. 14, 2014. Baker says she paid her taxes two weeks late because she was in a car crash seven days before the due date.
  
  Hillsdale County Treasurer Gary Leininger confirmed that Baker paid her taxes, albeit late. He said Baker likely paid the taxes to the township where the property is located, and then the township treasurer turned the payment over to the county treasurer, which is responsible for collecting delinquent taxes.
  
  Baker paid $161.29 on March 18, 2014, according to Leininger. The $7.70 was, he said, a balance due from interest and a four percent late fee.
  
  “That’s standard operating procedure for county treasurers all over the state,” Leininger explained. “She would have received a paid receipt, but it clearly showed it was a partial payment and there was a balance due."
  
  Leininger said the receipt would have shown a balance of less than $10 and Baker never responded.
  
  Baker claims she didn’t receive any notices stating that a failure to pay the late fee would result in a forfeiture of the property. Baker’s property was forfeited on March 1, 2015.(1) According to documents included in the FOIA, a notice of judgement of foreclosure was issued Feb. 26, 2016, which stated the foreclosure would become final on March 31, 2016.
  
  Baker said she called the county clerk to find out what she owed on the property, and that’s when she found out it had already been foreclosed.
  
  “I called there and couldn’t believe my property was foreclosed,” she said. “I couldn’t believe it. I didn’t receive anything.” “I was just calling to see what I owe, but I didn’t know what it was for,” she said. “I never signed anything.”
  
  Leininger disputed Baker’s claim that she did not receive any notifications. Documents received from the FOIA request show that Hillsdale County sent delinquent tax notices in 2014, postmarked June 1 and Sept. 1, to Baker's home address in Jackson. The notices said she owed $7.70. If she paid after Aug. 31, the fee would go up to $9.16. The second notice stated the fee would go up to $24.39 if the bill were paid after Nov. 30.
  
  Documents also show that the county sent a notice of forfeiture to Baker’s Jackson residence on June 30, 2015, through certified mail.(2) Tracking information indicates that the mail was not signed for, so a notice was left at Baker’s home and the mail was returned to the Hillsdale County treasurer's office.
  
  The county also posted a notice on the Somerset Township lot and published notices in the Hillsdale Daily News three weeks in a row in January 2016. But Baker said she rarely visited the property, which is why she never saw any notices posted there, and she doesn’t receive the Hillsdale Daily News.
  
  “The thing that gets me is, I have a phone number and they know what it is,” she said. “Why didn’t someone call me?”
  
  “I had a 'for sale' sign on the property with my phone number on it,” she added.
  
  Leininger, who sent an agent to post a notice on the property on Jan. 15, 2016, said county treasurers are not required by law to call delinquent taxpayers, nor did the county know Baker’s phone number.
  
  He also said the last time the county heard from Baker, who has not paid her 2014 or 2015 property taxes, was March 18, 2014, when the county processed her payment on the delinquent 2013 taxes, absent the interest and late fee. “We never heard from her since, until after the foreclosure was final,” he said.
  
  “In my view, the lady doesn’t have a leg to stand on,” Leininger said.

For the story, see County Takes Michigan Woman's Property Over $7 Late Fee (Treasurer: 'Lady doesn't have a leg to stand on').

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(1) In a similar case (see Federal Court Green-Lights Elderly, Dementia-Stricken Veteran's Lawsuit (Accuses D.C. Of Violating His 5th Amendment Rights By Swiping His $200K Free & Clear Home Over Unpaid $134 Tax Debt & Refusing To Fork Over The Proceeds For His Surplus Home Equity From Tax Sale), a Washington, D.C. homeowner is currently suing the District, and is advancing the argument that the process it used for foreclosing on homes for unpaid tax debt violated the U.S. Constitition's Fifth Amendment’s maxim that government cannot take property unless it pays just compensation for the property (i.e. the government may keep what it's owed when selling property to pay a tax debt, but it must pay the property owner for the surplus equity it takes. See Challenge to Washington, D.C.’s tax scheme moves forward.

If, in fact, the tax foreclosure process in Hillsdale County, Michigan operates as a forfeiture of property and where the foreclosed homeowner gets nothing for any accumulated equity for her home (the way it did in the aforementioned Washington, D.C. case), the tax-foreclosed Michigan homeowner may have similar grounds for a lawsuit against the county for taking her property without paying her just compensation in violation of her 5th Amendment rights.

(2) Ibid.