For years, Oakland County — like others in the state — foreclosed on properties that owed back taxes, sold them and kept the proceeds.

But a new legal standard says some of the money from those sales actually belongs to the property owners, not the county. So a growing number of suits across the state seek to recover the funds for property owners — meaning millions could drain out of county coffers.

The new standard springs from a 2020 Michigan Supreme Court ruling and was followed by a settlement in a lawsuit last year, in which Oakland County agreed to start paying out $38 million to people whose property was sold in foreclosure auctions. They’re entitled to every penny beyond the taxes, interest fees and penalties they owed on the properties, the high court decided. Lawmakers also established rules in 2020 for property owners to file claims to recover profits made by counties on sales from tax foreclosures.

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