Did you know that in some states, if you miss one tax payment, local politicians will take your home, sell it and keep all the profits?
Really.
Tawanda Hall was behind on her taxes. She was on a payment plan but had missed $900. She didn’t expect Southfield, Michigan, to take her entire house because of that. It was worth $286,000 more than what she owed.
“I’m still in shock,” says Tawanda Hall in my new video. “They took my whole house, my whole family’s livelihood.”
John Bursch, a lawyer for the county, says while this practice may sound unfair (yes, it sure does), “It’s also unfair to force those who pay their taxes to subsidize those who don’t.”
“I pay taxes!” Hall responds. She works as a nursing assistant. “I lift people. I bathe people. I work hard.”
When Hall found out she was going to lose her home, she tried to pay off the debt.
“I went to the mayor’s office, I went down to the city county building,” she says. “They didn’t want our money. They said no.”
They wanted her house.
Taking it should be illegal.
“I think it’s unconstitutional,” says Christina Martin, senior attorney at the Pacific Legal Foundation. “The government can’t take more than it’s owed.”
The Foundation is suing local governments in six states for this type of home theft.
Martin won one case in Michigan’s supreme court. Oakland County had taken an entire home over an $8 debt.
Matthew Hodges, the county’s lawyer, argued, “There couldn’t be anything more fair than informing property owners of what is going to happen, giving them time to act and then letting them make an informed choice.”
Martin’s response: “Do you think if he knew he owed $8, he would have paid it? Of course! He didn’t know, and there wasn’t the proper incentive to let him know.”
In fact, the town has an incentive not to let him know. Officials rarely tell people: “Pay! Or we’ll take your home!” Towns that do this write notices in legalese: “a tax lien acquired under a certain Instrument of Taking from the Collector of Taxes for the city … said instrument of Taking covers a certain parcel of land … “
Hall doesn’t remember receiving “anything other than, ‘Get out.'”
Despite the Michigan Supreme Court ruling, a judge dismissed Hall’s case because the government itself did not make the profit. In her case, the town gave her home to a private business. That business, the Southfield Neighborhood Revitalization Initiative, sold the house and kept the money.
The business says it uses the town’s donations to maintain attractive, safe neighborhoods, protect and raise property values.
“Government shouldn’t be able to steal from its own people and then give it over to their friends,” says Martin.
I ask her how she knows Southfield Neighborhood Revitalization officials are “friends” of the politicians.
She replies, “The company is literally run by the mayor and the city administrator!”
I wanted to interview them. Neither would agree to talk to me.
I’m surprised how common this kind of government home theft is. If you are behind on taxes, even just $10 behind, 11 states allow local governments to sell your home and keep all its value.
In Massachusetts, a 66-year-old grandmother is “sleeping in her car right now,” says Martin. “The city took her property, turned around and sold it within days of evicting her.”
Although her debt was just $30,000, they sold her house for $242,000 and kept the difference.
The Pacific Legal Foundation has gotten three states to stop engaging in this home equity theft. Good.
Eleven more to go.
Pirates 🏴☠️ That’s just not right. Something has got to be done to help people in this situation.😍🤬☠️
Property taxes turns home owners into home renters. The state owns our properties, and they hold our properties and taxpayers hostage. It is legalized plunder that is promoted by corrupt politicians and state lawmakers. Liars and thieves believe in such unjust laws. The corrupt legal system scarcely trembles at this corruption. They also use our properties as collateral in their dishonest business deals. Without taxpayer knowledge or approval.
Congress needs to change this law
How about the great state of Texas where our property taxes are enormous? My county taxes homeowners 2.3% of the current value of their primary home, not what was paid at the time of purchase. And the value of homes is determined each year by a hi-tech process known as smoke and mirrors. I’ve lived in my current home 6 years and my taxable value has increased 57% since then. In theory, it’s worth more now, but only if I sell it. And if I sell it I’ll have to pay capital gains taxes on my ostensible profits. And don’t say it’s justified by the fact that we don’t pay state income tax – I’ve done the math, and we’re not coming out ahead.
We have this in NJ too. I was once called by the town telling me I was late and that they were going to send me to a tax lien sale within 10 days. I wasn’t late and I’ve never been late ever. I make sure I pay electronically and get a receipt. In NJ property taxes are as much as a mortgage payment, I own my home but I still have a tax mortgage. How do we stop this? It’s bad enough our taxes are outrageous but to sell the home and keep the profit too? Wow I always assumed they had to paid you the difference.
I admit that I am not a trained Constitutional attorney, but wouldn’t this be in direct contravention of the Takings Clause (Amendment V) of the US Constitution? It would -also- violate Amendment IV, against unreasonable (searches and) seizures, -and- Amendment VIII against excessive fines and bail and/or cruel and unusual punishment. I don’t think there even exists a potential interpretation of the law, no matter how torturous and risible the logic, that could possibly allow the courts to -lawfully- rule that taking a multi-hundred thousand dollar property over a < $10 public debt could possibly be permissible.
How have these jurisdictions been allowed to get away with this for as long as they have?
This is _not_ a call for violence, but is this sort of overreach exactly and specifically why the Founders included the Second Amendment in the Constitution? I am reasonably certain that, Federalist or Anti-Federalist, they'd have agreed that it would be the citizen's right to use even deadly force to protect against such a monstrous tyrannical abrogation of justice. They'd have been horrified such a thing could even have been contemplated.
This story either does not have all the facts, or the township/city is breaking Michigan law. In fact, this story sounds fishy to me. If the taxpayer is two years delinquent in their property taxes, Michigan law requires that the county treasurer take jurisdiction. Michigan law requires certified mail to notify the taxpayer of the delinquency over one year before forfeiture, a later visit to post a notice to, or on, the property, and the taxpayer’s name and address advertised in the local newspaper twice. A second certified mailing gives them at least thirty days to go to court to make their case before a judge. A provision added in 2021 allows the former taxpayer to collect the difference between the sale price and the taxes owed after it is auctioned off. In this case it sounds like it was put in a “Land Bank,” and sold, not auctioned. Even so, the land bank would still be run by the county, not the township.