County Seizes 83-Year-Old Retiree's Home Over $8.41 Debt
An 83-year-old Michigan man is fighting for his livelihood after his county government seized and sold his house over a debt of $8.41 he owed the state.
Uri Rafaeli bought a house in Southfield, Michigan, in 2011, fixing up the property and turning it into a rental, according to Fox News.
Less than three years later, Oakland County seized the house and sold it at an auction for $24,500. Rafaeli had bought the house for $60,000.
Rafaeli’s misfortune is the result of a Michigan property tax law that allows the state to sell houses with unpaid property taxes.
Now, Rafaeli’s case is before the Michigan Supreme Court.
Christina Martin, a lawyer with the nonprofit Pacific Legal Foundation, is representing the 83-year-old in the case.
Martin has argued that the county’s actions are unconstitutional.
Judge at our Michigan Supreme Court argument last week:
“You have a situation where a person owed $8 and lost their house. I mean, how is that equitable?”
Oh wait, we know this one! It isn’t! @CMM123https://t.co/02jBOOrMyq pic.twitter.com/V5MyY5OPU6
— Pacific Legal ?⚖️ (@PacificLegal) November 18, 2019
The Fifth Amendment’s Takings Clause states that private property shall not “be taken for public use, without just compensation.”
Oakland County has offered Rafaeli no compensation for seizing his house — which is now estimated to be worth over $120,000, according to Fox News.
“When the government takes property to settle a debt, they have to give the extra money they make back to you,” Martin told the network.
“It doesn’t matter what law Michigan passes, they have the constitutional obligation to pay back any more than they are owed.”
Rafaeli’s trouble with the state was the result of a simple calculation.
The county had notified him he had underpaid his 2011 property taxes by $496.
After that, Rafaeli paid his taxes on time and tried to repay his debt in 2013.
Since his interest calculations were off, however, he ended up $8.41 short.
And while Oakland County sent notices to Rafaeli’s rental property and another Michigan address multiple times, Rafaeli never received them, as he had moved out of state.
In 2014, the county seized and sold the property — without Rafaeli even knowing.
He would only discover that his house had been sold when he stopped receiving rent payments from his former tenants.
“You shouldn’t have to rely on the mercy of a tax collector to have your constitutional rights protected,” Martin said. “No amount of mail should allow the government to steal your property.”
Oakland County’s lawyers contested Martin’s claims of unconstitutionality.
“When a taxpayer relinquishes property by failing to pay back taxes and failing to redeem the property before auction, the taxpayer no longer possesses an interest for the government to ‘take,’” they wrote in a legal brief.
“But tax collections are not the taking of private property for public use in the constitutional sense.”
In oral arguments before the court, county attorney John Bursch argued that a precedent of repaying homeowners for seized property could eventually bankrupt the county.
Justice Richard Bernstein expressed skepticism of that argument in his response.
“The interpretation you gave was very dramatic: that this is going to end schools and the counties are going to crumble and society is going to just implode,” Bernstein said.
“You have a situation where people owed $8 and they lost their house. I mean, how is that equitable?”
Rafaeli’s case will be decided before the end of July 2020, according to Fox News.
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