Local governments can’t keep extra cash in tax foreclosures

Michigan

The Michigan Hall of Justice, which houses the state Supreme Court and Court of Claims. (File)

DETROIT (AP) – The Michigan Supreme Court says local governments can’t keep surplus cash from the sale of tax-foreclosed properties.

It’s a sweeping decision that could lead to waves of payments to former owners.

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State law allowed county treasurers to keep money left over after overdue taxes finally are paid from a property sale.

The Supreme Court said the practice is illegal under the Michigan Constitution.

The case centered on two sales in Oakland County.

In one deal, a man’s land was sold for $82,000. He owed $6,000 in back taxes but wasn’t given the $76,000 surplus.

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