Michigan Tax Foreclosure Surplus Settlement — 28 Counties

Tax Foreclosure · Claims Open

Current Status

Claims are open through November 23, 2026. The court extended the original July 16, 2026 claim deadline to that date in an order entered August 25, 2026. The court preliminarily approved the Fox settlement on August 21, 2025, and the final approval hearing is scheduled for January 22, 2027 at 3:00 p.m. in Bay City. No payments will be made until the court grants final approval and any appeals are resolved.

What Is This Settlement About?

Until late 2020, Michigan’s General Property Tax Act let counties sell tax-foreclosed homes and land at auction and keep any money left over after the unpaid taxes, interest, penalties and fees were paid — what courts call “surplus proceeds.” Federal courts have since held that this part of the law could not stand. Two class actions in the U.S. District Court for the Eastern District of Michigan, Fox v. County of Saginaw, No. 1:19-cv-11887, and Arkona v. County of Cheboygan, No. 1:19-cv-12372, alleged that the counties violated former owners’ rights by keeping that surplus.

The counties deny wrongdoing, in part because the state statute in effect at the time did not authorize them to return the surplus. Both sides agreed to settle to avoid further litigation, and the court has not decided who is right. The settlement survived a later motion by plaintiffs to vacate the preliminary approval order, which the court denied in December 2025 while granting the counties’ motion to enforce the agreement.

Who Qualifies?

The class is all persons, and the estates of persons who are bankrupt or deceased, who owned property in fee simple in a participating county that, from January 1, 2013 through December 31, 2020, was foreclosed through a real property tax foreclosure and sold at tax auction for more than the minimum sale price, and to whom the county did not refund the surplus proceeds. Heirs of a deceased owner, and people authorized to act for an owner or an owner’s estate, can file.

The settlement website lists 28 participating counties:

• Fox case (26 counties): Alcona, Alpena, Arenac, Bay, Clare, Crawford, Genesee, Gladwin, Gratiot, Huron, Isabella, Jackson, Lapeer, Lenawee, Macomb, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Sanilac, St. Clair and Tuscola.
• Arkona case (2 counties): Cheboygan and Monroe.

Washtenaw County was named as a defendant in the Fox case, but it is not one of the participating counties listed on the settlement website or in the class notice.

How Much Can You Get?

According to the court-approved notice, each class member who submits a valid claim will usually receive 125% of the surplus proceeds from the sale of their former property, less the attorneys’ fees and costs the court awards. Interim class counsel has asked the court for a fee of 20% of the amounts paid; its fee motion notes that 80% of 125% leaves most claimants with a net recovery of about 100% of their surplus. The court will decide the fee at the final approval hearing.

The notice says a payment can be smaller, or nothing, in some situations:

• If someone else with an interest in the property sought the surplus through Michigan’s Public Act 256 process, the class member may receive nothing under the settlement, or a limited amount in some circumstances. The notice says it usually makes sense to file a settlement claim even if someone else has brought a Public Act 256 claim.
• If a county receives an unexpectedly large volume of claims, recoveries against that county may be reduced.

Class members who stay in the settlement give up the right to seek more money from the county over these issues, including any larger recovery that later changes in the law might allow based on the foreclosed property’s value, the notice says.