Denha & Associates, PLLC Blog


By: Lance T. Denha, Esq.

According to a new consumer group report, outdated tax laws are allowing investors to seize homes from residents that owe as little as $400.00 in back taxes. These laws then allow banks and similar investors to purchase tax liens on these properties and make significant profits through the subsequent sale of these same properties.

By seizing and selling homes that are behind on their taxes, governments can better balance already tight budgets through this additional revenue. However, the laws that govern such practices, which start with the auction of a lien on a property to investors, allow this to take place for virtually any amount of back taxes. Educating homeowners about these laws, and ultimately updating them, is the best way to protect the general public against this unfortunate consequence.

According the Michigan Bar website, “Under Michigan law, if the taxes are not paid by the redemption deadline, and any post judgment challenge to the foreclosure process is unsuccessful, the treasurer will attempt to sell the property. The sale process includes a series of auctions in which the property is offered to the state, local and county governments and then to the general public, first for certain minimum bids, and then if still not sold, without a minimum bid.”

Under current law, it is very difficult for homeowners to retake their homes after a tax lien sale. There is usually heavy interest and penalties investors can charge without any real court intervention or supervision. Additionally, there aren’t many local government organizations to educate homeowners and to create installment plans to better warn homeowners regarding the lien process. As such, which many property owners are unaware of what could happen if they fail to pay this expense.

It goes without saying that one of the best solutions is to have enough money saved for your annual property taxes and also understanding the millage rate and market value to determine upcoming payment. However, in the event you have fallen behind, it is highly advisable to discuss this matter with legal professionals as well as your local taxing authority who can help assist greatly with property tax issues. Be certain to explain your situation and the manner in which you are seeking assistance so that you can be informed and potentially negotiate a settlement with the taxing authority on the property tax balance.