Legislation creates foreclosure exemption for homeowners owing de minimis delinquent property taxes, supports homeowners impacted by COVID-19
LANSING, Mich., July 16, 2020 – State Rep. Robert Wittenberg (D-Huntington Woods) introduced House Bill 5935 this week, which would amend Michigan tax foreclosure law to allow county treasurers and tax assessors discretion over foreclosing on homeowners who owe de minimis (minor) delinquent property taxes on their principal residence. Current law allows for county treasurers to withhold properties from the foreclosure process under certain circumstances. No discretion is currently allowed based solely on the actual amount of delinquent taxes, interest, penalties and fees owed by the property owner. In light of the COVID-19 pandemic, Wittenberg also introduced HB 5936, which would allow county treasurers to waive up to 75 percent of interest fees associated with delinquent property taxes for homeowners who lose employment and make less than 200 percent of the federal poverty income standards.
“Foreclosure can derail a person’s life, exacerbating their financial hardships and leaving them without a home or hope,” Wittenberg said. “Providing this discretion to county treasurers and tax assessors will help protect Michigan homeowners from having their lives uprooted by foreclosure.”
Wittenberg developed HBs 5935 and 5936 with input from county treasurers across the state, including Oakland County Treasurer Andy Meisner.
“The COVID-19 pandemic has placed incredible strain on homeowners across Oakland County and throughout Michigan,” said Meisner. “During these uncertain times, it is critical that we provide immediate relief to taxpayers, and these bills will give county treasurers the discretion to do just that.”
The General Property Tax Act currently provides three circumstances in which county treasurers and tax assessors have discretion to avoid foreclosure on homeowners with delinquent taxes:
- Where the owner is unable to manage their own affairs due to age, incompetence, or mental disability, until a guardian is appointed to manage their affairs;
- Where the owner is undergoing substantial financial hardship, a standard developed and adopted by the foreclosing government; or
- Where the property holder has entered an approved delinquent property tax payment plan or tax foreclosure avoidance agreement.
HB 5935 would establish a fourth circumstance in which county treasurers and tax assessors have discretion to avoid foreclosure on homeowners. Under this bill, homeowners who owe de minimis delinquent property taxes, interest, penalties and fees would also be eligible for exemption from tax foreclosure proceedings. The de minimis standard will be determined according to the policies developed by the county treasurer or tax assessor.