The Michigan Court of Appeals ruled on June 18, 2026, regarding the claims for surplus proceeds from tax foreclosure sales. The decision affects several former property owners who sought to recover funds from the sale of their properties due to unpaid taxes. The court's ruling clarifies when these claims can be made and sets important precedents for future tax foreclosure cases in Michigan.
The case, titled In Re Petition of State Treasurer for Foreclosure for Unpaid Tax (Docket No. 376481), involves the State Treasurer of Michigan as the petitioner and multiple former property owners, including Gordon Beck, as respondents. The central issue was whether the claims for surplus proceeds from tax-foreclosure sales accrued in 2014, when the properties were sold, or at a later date.
The dispute arose after the State Treasurer foreclosed on properties in Livingston County in 2014 due to unpaid property taxes. When these properties were sold, they generated surplus proceeds, which the State Treasurer retained. In 2024 and 2025, the former property owners sought to recover these surplus funds under a statute enacted in 2020, which established a procedure for such claims.
The former property owners argued that their claims did not accrue until the Michigan Supreme Court ruled in 2024 that the new statute applied retroactively. They believed this ruling allowed them to pursue their claims even though the sales occurred in 2014. However, the State Treasurer contended that the claims were time-barred because they should have been filed within three years of the sales.
The court ruled that the claims for surplus proceeds accrued in 2014 when the properties were sold. Judge Michelle M. Rick wrote the opinion, stating, "Respondents’ claims accrued in 2014 and became time-barred in 2017." The court emphasized that the former property owners had a vested property right to the surplus proceeds from the tax-foreclosure sales, which existed at the time of the sales.
The court's decision reversed the trial court's earlier ruling that had allowed the former property owners to pursue their claims. The trial court had determined that the claims were timely based on the 2024 Supreme Court ruling. However, the Court of Appeals clarified that the right to recover surplus proceeds was established before the enactment of the new statute.
This ruling has significant implications for former property owners in similar situations. It establishes that claims for surplus proceeds from tax-foreclosure sales must be filed within a specific timeframe, which is typically three years from the date of the sale. The decision also reinforces the importance of understanding the timing of claims and the legal rights of property owners following foreclosure.
Moving forward, this ruling will likely affect how former property owners approach claims for surplus proceeds. It serves as a reminder that property owners must act quickly to assert their rights after a tax foreclosure sale. The ruling also clarifies the legal landscape regarding tax foreclosures in Michigan, potentially influencing future legislation and court decisions.
As for what’s next, the former property owners have limited options for appeal since the court ruled on the merits of the case. There are no indications of related cases pending that would affect this ruling. The court's decision is final, and the former property owners will not receive the surplus proceeds they sought.