Southfield man underpaid his property taxes by $8.41, lost home and money

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Uri Rafaeli, a former Michigan resident, mistakenly underpaid his 2011 property tax bill. When he was notified, he corrected his payment, but still owed $8.41.

Oakland County then seized Rafaeli’s Southfield home and sold it for $24,500 in August 2014, according to Reasons magazine. He originally paid $60,000 for the property.

Zillow estimated that the property is now worth $128,000, as the Southfield area is now popular for real estate.

"The investment was good to the state economy, and [at] the same time, it may produce a good rent for my retirement,” 83-year-old Rafaeli told Reasons regarding his initial decision to purchase the home. “A 'win-win' situation."

According to the University of Michigan, the 123 Act of 1999 gives Michigan’s primary agents the authority to foreclose, auction, and seize properties that have unpaid taxes. Organizations have called the law unconstitutional, inequitable, and unreasonably harsh "home equity theft."

Rafaeli’s attorneys allege that over 100,000 properties (and their equities) have been seized by Michigan since 2002.

Christina Martin, an attorney for the nonprofit law firm Pacific Legal Foundation, has represented Rafaeli and other homeowners in front of the Michigan Supreme Court for class action lawsuits.

"Michigan is currently stealing from people across the state," she told Reason. "Counties have been authorized to take not just what they are owed, but to take people's life savings."

The goals of the 123 Act of 1999 were to prevent blight and preserve property — but the majority of the outcomes have left homeowners like Rafaeli without a home, profit, or equities.

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