Home Theft Via Uncle Sam

Did you know in certain states that if one of your taxes is not paid, the local politician will seize your house and make all the profit.

Really.

Tawanda Hall was late on her taxes. Although she was following a payment plan, she had already missed $900. Southfield in Michigan took her entire home. She was surprised. She owed $286,000 less for it.

“I’m still in shock,” says Tawanda Hall in my new video. “They took my whole house, my whole family’s livelihood.”

John Bursch, a lawyer for the county, says while this practice may sound unfair (yes, it sure does), “It’s also unfair to force those who pay their taxes to subsidize those who don’t.”

“I pay taxes!” Hall responds. She is a nurse’s assistant. “I lift people. “I bathe people.” I work hard.”

Hall tried to get rid of the debt when she found out that her home was being sold.

“I went to the mayor’s office, I went down to the city county building,” she says. “They didn’t want our money. They said no.”

She was their dream house.

You should never take it.

“I think it’s unconstitutional,” says Christina Martin, senior attorney at the Pacific Legal Foundation. “The government can’t take more than it’s owed.”

This type of theft is being pursued by the Foundation against six local government officials.

Martin was awarded one case by Michigan’s highest court. Oakland County had taken over an entire property to pay $8 in debt.

Matthew Hodges, the county’s lawyer, argued, “There couldn’t be anything more fair than informing property owners of what is going to happen, giving them time to act and then letting them make an informed choice.”

Martin’s response: “Do you think if he knew he owed $8, he would have paid it? It’s true! He didn’t know, and there wasn’t the proper incentive to let him know.”

Actually, the town offers an incentive for him not to tell. Officials rarely tell people: “Pay! Or we’ll take your home!” Towns that do this write notices in legalese: “a tax lien acquired under a certain Instrument of Taking from the Collector of Taxes for the city … said instrument of Taking covers a certain parcel of land … “

Hall doesn’t remember receiving “anything other than, ‘Get out.’”

Hall lost her case despite the Michigan Supreme Court decision. This was because Hall claimed that the government had not made the profit. She was granted her house by the city to a private firm. The Southfield Neighborhood Revitalization Initiative sold her house, but kept the cash.

According to the business, it makes use of donations from the community in order to keep neighborhoods safe and attractive as well as protect and increase property values.

“Government shouldn’t be able to steal from its own people and then give it over to their friends,” says Martin.

I ask her how she knows Southfield Neighborhood Revitalization officials are “friends” of the politicians.

She replies, “The company is literally run by the mayor and the city administrator!”

I was interested in interviewing them. I asked them both to speak to me.

This type of home-theft by government officials is quite common, I find it surprising. 11 states permit local governments in eleven states to offer their homes for sale if you’re behind on your taxes.

In Massachusetts, a 66-year-old grandmother is “sleeping in her car right now,” says Martin. “The city took her property, turned around and sold it within days of evicting her.”

Despite her $30,000 debt, she was able to sell her home for $242,000 and keep the rest.

The Pacific Legal Foundation got three states to cease engaging in this type of home equity theft. Good.

We have eleven more.