Key facts
- The Supreme Court rejected an effort to change tax foreclosure sales.
- The ruling involved a Michigan family whose home was sold for less than half its market value to cover an unpaid tax bill of over $2,000.
- The family argued the foreclosure violated their rights because the house could have sold for nearly $200,000 on the open market.
- Isabella County argued that requiring foreclosure sales to match open-market prices would hinder tax collection.
- This decision contrasts with a previous ruling where the court stated counties cannot keep tax sale proceeds exceeding the amount owed in unpaid taxes.
The Supreme Court on Tuesday rejected an effort to change tax foreclosure sales, ruling against a Michigan family whose home was sold for less than half its open-market value to cover an unpaid tax bill of just over $2,000. The family argued the foreclosure violated their rights because the house would have fetched a higher price of nearly $200,000 if sold through typical real-estate channels. However, the county maintained that auction sale prices are typically lower than open real estate transactions, partly due to the requirement of full cash payment rather than a mortgage. Isabella County argued that requiring foreclosure sales to match open-market prices would essentially end them, making it harder to collect unpaid taxes. This case comes about three years after another major foreclosure case where the justices ruled against local governments, finding that counties cannot keep tax sale proceeds beyond what the owner owes in unpaid taxes. That prior case involved a Minnesota woman whose county government kept about $40,000 in proceeds from the sale of her condominium after she failed to pay about $2,300 in taxes.