The Buckeye Institute: Even Citizens of That State Up North Deserve to Have Their Property Rights Protected

Apr 25, 2019

Columbus, OH – On Wednesday, The Buckeye Institute filed an amicus brief asking the Supreme Court of Michigan to rule in favor of Uri Rafaeli in the case Rafaeli, LLC v. Oakland County and stop the government from taking his private property to pay a negligible tax bill. Mr. Rafaeli is represented by the Pacific Legal Foundation.

“This case is absurd! The fact that the government would sell Mr. Rafaeli’s property for an $8.41 mistake and then sell it for $25,500 and keep the profits is unconscionable, not to mention unconstitutional,” said Robert Alt, president and chief executive officer of The Buckeye Institute. “Even citizens of That State Up North deserve to have their property rights protected from government abuse and overreach.”

Rafaeli, LLC v. Oakland County stems from an underpaid property tax bill—of $8.41. Before Mr. Rafaeli was able to fix the mistake, Oakland County, Michigan sold his property for $25,500 and pocketed the profits, which is currently allowed under Michigan’s tax foreclosure law.

As The Buckeye Institute argues in its brief, any profits above the cost of the unpaid tax bill and the costs associated with the foreclosure should be paid back to the property owner, just as is required in the private sector when a mortgage company forecloses on a property. Mr. Rafaeli should have been paid $25,401.59 minus the actual cost of the sale incurred by Oakland County.

In a similar case challenging Michigan’s foreclosure laws before the United States Court of Appeals for the Sixth Circuit, Judge Raymond Kethledge wrote in dissent that confiscation of tax sale profits was the “sort of behavior [that] is called theft.”

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UPDATE: July 17, 2020, the Michigan Supreme Court declared unconstitutional a Michigan law that previously allowed Oakland County, Michigan, to sell Mr. Rafaeli’s property for $25,500 and pocket the profits after he underpaid his property tax bill by $8.41.