A scheme uncovered by the Oakland County Treasurer and Clerk involving property taxes, probate court, and real estate is now facing scrutiny of state lawmakers. Legislation to crack down on a predatory practice to manipulate the law to cash in on probate estates came before the House Judiciary Committee Tuesday. Oakland County Treasurer Andy Meisner was on hand to underscore the urgency of the changes to legislators.
“Those working to resolve family affairs in the wake of a loved one’s death deserve the protections provided for in these bills. Additional time, notification, explanation, and opportunity to assert their interest as legal heirs can help prevent the hustle we’ve seen affect too many in Oakland County and the region.” said Meisner. “What we discovered, which has happened in at least two dozen documented cases, may be technically legal, but is clearly unethical. I’m grateful to be working with our legislators to put an end to this predatory practice.”
Called “the most significant” changes to Michigan estate law since the 1970s, House Bill 4821, sponsored by State Rep. Jim Runestad (R-White Lake) and House Bill 4822, sponsored by State Rep. Jim Ellison (D-Royal Oak) received a legislative hearing by the House Judiciary Committee. The Attorney General's Office, responsible for oversight of public administrators, has indicated support of the reforms as well. The bills changes to the estate law including enhanced notice, time, transparency, and deterrents, specifically:
• Lengthens the time-period for a public administrator to open a probate case on an estate from 42 to 93 days, giving rightful heirs more time to assert their legal interest.
• Provides for more detailed notice and explanation about heirs’ rights and the process by which to assert their interest.
• Stipulates additional reasonable steps for public administrator to locate heirs and provides additional court oversight of outreach.
• Instead of merely filing paperwork, public administrators now would be appointed in a formal proceeding by the court, again giving heirs additional opportunity to assert interest.
• Public administrators must get approval of probate court before sale of real property, allowing for additional scrutiny of dealings.
• Legal fees capped at 10% of proceeds of sale of real property.
• Misdemeanor penalties for infractions.
Since 2015, the Oakland County Treasurer’s Office detected and followed a pattern of action involving a well-known local real estate broker focused on properties involving deceased owners. Working with the Oakland County Clerk’s Office, it was revealed that the broker was colluding with a state-appointed public administrator and personal representative on probate cases opened on these estates.
“One of the rights guaranteed to us by the Constitution is the protection of personal property rights and the guarantee of due process for takings. In the Treasurer’s Office, we are charged with stewardship of the tax foreclosure process. It is a responsibility I and I know my fellow county treasurers from across the state take very seriously,” Meisner said.
“We spend an enormous amount of time and resources working with well-meaning property owners to address back taxes and treat tax foreclosure as the unwanted final option. It is precisely because we spend so much time trying to keep people in their homes that this scheme is so offensive to me.”
In addition to Meisner, the committee also heard from bill sponsors Runestad and Ellison, State Public Administrator Michael Moody, Oakland County Clerk/Register of Deeds Lisa Brown, and Judy D’Angelo of Rochester Hills who experienced the scheme firsthand.
“After my mother died in 2012, her home in Waterford was sold out from beneath my brother and me in a way that was deceitful and dishonest. Regular citizens with no experience or knowledge of probate court and real estate are at risk of being taken advantage of. That is what happened to me,” D’Angelo said. “It may be too late for my family but I hope to impress on the committee the urgency of this situation so it cannot happen to someone else.”
The hearing Tuesday marks a significant step forward for the legislation which was introduced in July. A majority of the thousands of bills introduced each legislative session fail to get a committee hearing. Upon receiving favorable approval by the committee, the legislation will go before the full Michigan House of Representatives, the Michigan Senate, and the governor to receive necessary approval to become state law. The committee is expected to vote on the bills in the upcoming weeks.
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