Michigan tax foreclosure remaining proceeds: the claim steps and dates

1. Who the statute calls a claimant

MCL 211.78t(12)(a) defines a claimant as a person with a legal interest in the property immediately before the judgment of foreclosure became effective under section 78k, who seeks recognition of that interest in remaining proceeds. Under subsection (8), the claimant must affirm that it did not transfer, and was not otherwise divested of, its interest before that judgment was effective.

Subsection (1)(b) is a separate gate for older sales. For property sold before July 18, 2020, a claim may be made only if the Michigan Supreme Court orders that Rafaeli, LLC v Oakland County, docket no. 156849, applies retroactively.

2. The notice of intention, due July 1

For property transferred or sold under section 78m after July 17, 2020, subsection (2) requires notice to the foreclosing governmental unit by the July 1 immediately following the effective date of the foreclosure. The notice uses a form prescribed by the Department of Treasury. It is given by personal service acknowledged by the unit, or by certified mail, return receipt requested. It must be notarized.

The notice includes the claimant’s name, telephone number, and service address; the parcel identification number and the property address if available; an explanation of the claimant’s interest; other known interests, including a lien or mortgage; and a sworn statement that the information is accurate.

3. The foreclosing unit’s January notice

By the January 31 immediately succeeding the sale or transfer, subsection (3) has the foreclosing governmental unit send certified mail to each claimant who notified it under subsection (2). That notice includes, among other items, the minimum bid, the amount of the sale or transfer, a sale cost recovery equal to 5 percent of that amount, any remaining proceeds or shortfall, the case number, the judge, and how to reach the clerk.

The January notice uses the words “sale cost recovery.” Subsection (12)(b) and the court order in subsection (9) use “sale commission.” Subsection (12)(b) defines remaining proceeds as the amount paid, minus the minimum bid, minus other section 78m fees and expenses that were not included in the minimum bid, minus a sale commission equal to 5 percent of the amount paid.

4. The motion after that notice

After the claimant receives the subsection (3) notice, subsection (4) says the claimant may file a motion in the same proceeding. The motion period begins on the February 1 immediately succeeding the date of the sale or transfer and ends on the immediately succeeding May 15. The same subsection says the motion may not be filed after that May 15 if notice was provided under section 78i of the show cause hearing under section 78j and of the foreclosure hearing under section 78k before those hearings.

The motion must state whether the claimant, or an entity in which the claimant held a direct or indirect interest, purchased the property, and whether the claimant holds a direct or indirect interest at the time of the motion.

Under subsection (9), the court sets a hearing and gives notice at least 21 days before the hearing. The court determines the relative priority and the value of each claimant’s interest immediately before foreclosure. The burden of proof is on the claimant. The court shall require payment to the foreclosing governmental unit of a sale commission equal to 5 percent of the amount for which the property was sold. Under subsection (10), the unit pays the amounts ordered within 21 days of the order, pursuant to section 78m.

5. Transfer and the exclusive mechanism

• Exclusive mechanism. Subsection (11) says this section is the exclusive mechanism to claim and receive remaining proceeds under Michigan law.
• Succession only. The same subsection says the right to claim is not transferable except by testate or intestate succession. See heirs versus owners for why a skip trace does not decide that question.
• Sales before July 18, 2020. Subsection (1)(b) allows a claim only if the Michigan Supreme Court orders retroactive application of Rafaeli, LLC v Oakland County.

Have counsel review how these limits apply to a particular agreement. This page does not.

6. Finding the person with the legal interest

Start with the person who held a legal interest immediately before the judgment, as the foreclosure case names that person. If the owner of record was a company, see how to find who owns an LLC. Locate Next “does not file claims, hold funds or decide who’s owed money.” Check each number’s Do Not Call status before outreach. A status does not decide what contact is allowed. See DNC scrubbing.

Ohio and North Carolina use different statutes. See Ohio excess proceeds and North Carolina tax foreclosure surplus.

Common questions

Sources

1. MCL 211.78t, Michigan remaining proceeds claims. Read October 22, 2026.

This page is general information, not legal advice. Have counsel review the statute before you rely on it.