2018-04-05 / Front Page

Tax-foreclosure in county moves from none to rare

By Eric Carlson
Of The Enterprise staff


COUNTY TREASURER John Gallagher says Leelanau has fewer property tax foreclosures than other counties in Michigan. COUNTY TREASURER John Gallagher says Leelanau has fewer property tax foreclosures than other counties in Michigan. With the 2017 tax season ending, Leelanau County has come out on top of yet another list — the fewest number of property tax foreclosures in the State of Michigan.

The deadline for paying off delinquent property taxes was Monday because the usual deadline, March 31, fell on a weekend. If an owner’s property taxes go unpaid for more than three years, the county can seize the property.

Leelanau County Treasurer John A. Gallagher III reported that the owners of three properties whose back taxes were approaching the three-year delinquency mark showed up at his office in person on Monday to pay off just enough of their 2015 taxes to avoid foreclosure this year.

“Last year, I got a call from the Michigan Department of Treasury asking that I double-check my figures because we had tax foreclosures on exactly zero properties in 2017,” Gallagher said. “That’s unprecedented. We were lowest in the state and may be again this year.”

For 2018, Leelanau County has foreclosed on just two properties for failure to pay off property taxes from 2015 or earlier. Once the county acquires them through foreclosure, the properties then go through a process that often ends in the properties being sold at a public auction. The auction is usually later in the summer, with proceeds used to pay off back taxes, penalties and interest.

The two properties the county gained ownership of through tax foreclosure as of Monday are both small, vacant parcels. One is a triangular parcel of less than one-quarter acre in size near the intersection of M-22 and Overlook Road in Leelanau Township.

The parcel is bank-owned and was likely overlooked entirely by the bank because it is part of a larger 673-acre parcel that is also vacant. The bank has been paying just enough taxes on the larger parcel to keep it from being seized by the county.

The second tax foreclosed parcel is closer to a half-acre in size and may be buildable even though it is in a wet area, according to Gallagher. It’s located off Detzer Road in Leland Township, close to several waterfront parcels on north Lake Leelanau. Before the county acquired it through tax foreclosure this week, the parcel belonged to a family trust. The county has been unable to track down its principals for years.

“I think it says a lot about our community that it’s been a long time since anybody lost their home to tax foreclosure here, and that our rate of tax foreclosure is so low,” Gallagher said. “Practically any lot in Leelanau County that’s buildable is worth at least $25,000 and is easy to sell.”

Gallagher also noted that the Treasurer’s Office takes extra steps to ensure that families residing in Leelanau County don’t lose the home they’re living in.

“There’s plenty of money in this community – and property values are high,” Gallagher said. “That’s probably why our rate of property tax foreclosures is so low here.”

The only other county that came close to Leelanau County’s low tax foreclosure rate in 2017 was tiny Keweenaw at the top of the Upper Peninsula. County officials foreclosed on just one property last year.

Not surprisingly, the highest number of tax foreclosed properties last year, 7,268, was in downstate Wayne County, in and around Detroit. Closer to home, Grand Traverse County foreclosed on 22 homes and Benzie County foreclosed on 45 homes last year for non-payment of three or more years of property taxes.

In Leelanau County and statewide, trends have been improving since the 2008 economic recession. For several years, the number of tax foreclosures occurring each year remained steady at around 30,000, statewide, peaking at 38,000 in 2015. In 2017, however, only 14,197 property tax foreclosures occurred statewide.

Leelanau County peaked at 102 tax foreclosures in 2012, but most of those were associated with the bankrupt Suttons Point Development project in the Village of Suttons Bay. Since then, tax foreclosures have ranged between 11 in 2016 to none last year.

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