Government abuse

Billy Binion | From the November 2024 issue

In 2021, on April Fools' Day, Manistee County, Michigan, took the title on Chelsea Koetter's home because of a small debt she owed on her 2018 property taxes. Unfortunately, this wasn't a prank.

Four months after seizing her home, which she shared with her two sons, the government auctioned it off for $106,500. It kept the profit.

All told, Koetter owed the government $3,863.40, which included her initial tax debt as well as penalties, interest, and fees. She does not contest she was obligated to pay that. At issue is whether the county acted lawfully when it pocketed the remaining $102,636 after selling her house, a practice known as home equity theft.

The issue may sound familiar. In 2020, the Michigan Supreme Court ruled the practice unconstitutional after the government seized Uri Rafaeli's home, then sold it and kept all the proceeds in excess of what he owed. His initial tax debt was $8.41.

The U.S. Supreme Court weighed in on the issue last year in Tyler v. Hennepin County, ruling unanimously........

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