Tax foreclosure suit: Detroit issued key notices weeks later than it claimed

February 16, 2020, 2:05 PM by  Violet Ikonomova

The Duggan administration is walking back its initial rebuttal to a lawsuit that alleges the city didn't give over-taxed homeowners enough notice to appeal their property assessments in 2017.

On Thursday, the city claimed notices went out on time that year, but now concedes the date they provided media was wrong. Information obtained by Deadline Detroit suggests the notices went out weeks after the city claimed.

Filed in federal court Thursday by the Coalition for Property Tax Justice, the class action targets the State Tax Commission, Wayne County and Detroit on behalf of residents who allegedly received late tax property tax appeal notices. The suit seeks to halt the foreclosure of properties affected and allow owners to appeal their assessments and win damages.

The suit comes as debate rages over whether the city should compensate homeowners over-taxed as a result of years of inflated assessments. The assessments collectively cost residents at least $600 million between 2010 and 2016, according to an investigation by The Detroit News. Of the 63,000 Detroit homes with delinquent debts last fall, 90 percent were overtaxed by an average $4,000 — more than the average debt remaining on the homes.

Detroit Mayor Mike Duggan has conceded the assessments were too high and ordered a citywide reappraisal that was completed in 2017.

Properties are foreclosed when the taxes go unpaid for three years. Residents each year are given the chance to appeal their assessments in a several step process, beginning with a February assessors review.

In a statement to Deadline Detroit Thursday, city assessor Alvin Horhn said the 2017 notices alerting residents of their right to appeal were mailed Jan. 24, in "an appropriately timely manner," and that the suit was "frivolous" and could "be proven false with a simple Google search." 

In fact, media outlets at the time reported that the city issued the notices late and would therefore extend the reassessment deadline by two weeks. A 2017 story by the Free Press, for example, quotes the city as saying the notices went out Feb. 8.

But the notices appeared to go out even later, according to a United States Postal Service receipt obtained by the group bringing the suit and reviewed by Deadline Detroit. The form shows third-party vendor Renkim Corp. sent out 263,000 pieces of mail on behalf of the city on Feb. 14.

An email provided to Deadline Detroit shows Horhn asked an account manager with the company to “please mail all the notices” on Feb. 7. Mailings were to go to about 245,000 addresses. 

Duggan spokesman John Roach apologized for providing the inaccurate information, saying it was done in error. The city, he said, corrected it Friday with the Detroit News, "which was the only outlet we saw that published the Jan. 24 date." On Sunday, Roach corrected the date with Deadline Detroit after a reporter inquired. 

"If we missed anyone else that published it that was an oversight," he said.

As of Sunday, the inaccurate statement remained in reports by the Free Press and Michigan Radio. 

"The facts will be borne out in the lawsuit," Roach said when asked whether the city could confirm the notices indeed went out Feb. 14. 

“The city complied with the law, and we will prevail in court,” Chuck Raimi, deputy corporation counsel for Detroit, added in a statement.

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