DETROIT (WXYZ) — Thousands of Detroiters may be owed money if they lost a home to tax foreclosure between 2015 and 2020, and the clock is ticking to claim funds.
In 1979, Sheila Gibson's family moved to a home on Vinewood Street in Detroit. After her mother passed, she said her father tried to keep up with the home with a very low income.
“Poverty level almost. He tried to do everything he could to receive help from the city, and he wasn't able to,” Gibson said.
This eventually led to the home going through foreclosure in 2015 before being sold at auction.
“We were very surprised by it. All the time we spent trying to avoid the situation,” Gibson said.
Donovan McCarty, a staff attorney with the Detroit Justice Center, said, typically, counties would keep surplus proceeds when foreclosed homes were auctioned.
“That means if you lost your home to taxes for $5,000 and the county then sold it for $100,000, they were keeping that $95,000 in addition to the $5,000 you owed,” McCarty said.
In 2020, the Michigan Supreme Court ruled that was unconstitutional.
“The Supreme Court said no. Under the Michigan Constitution, under the U.S. Constitution, that's a taking. Effectively, they can't keep that money. It's your money,” McCarty said.
The ruling is also retroactive to tax foreclosures between 2015 and 2020. However, legal advocates say many may not know they're eligible.
“Either people don't know it's a thing or they're severely miseducated about what it is,” said Sonja Bonnett, a community legal advocate with Detroit Justice Center.
Bonnett said it's estimated that around 2,700 people in Detroit alone are owed money.
To receive those funds, the deadline to submit a claim form is March 31st.
“Some people are owed maybe $1,000, but then we've seen numbers in the $20,000s, even the $100,000s,” Bonnett said.
But she warns that the claim form is just one step in a lengthy process.
“It's not simply you go hand in your form and you get handed a check. This is a legal process, so there are steps and paperwork, but it's worth it,” Bonnett said.
Sheila Gibson said she was glad there was some light during a difficult situation.
“It doesn't take the place of what was taken away, but I think it's a good thing,” Gibson said.
For assistance, Detroiters who have experienced foreclosure are encouraged to text REPORTER to 67485.
