The Michigan Supreme Court has ruled in Nick Yono v. County of Ingham, a case examining constitutional property rights in tax foreclosure proceedings. The decision, announced July 16, 2025, addresses whether property owners retain enforceable rights to surplus equity when their real estate is foreclosed for unpaid taxes.
Nick Yono filed the lawsuit in Ingham Circuit Court against Ingham County, the Ingham County Treasurer, and the Ingham County Land Bank Fast Track Authority. Yono alleged the defendants unconstitutionally took his property without just compensation, violating Michigan's Takings Clause under Article 10, Section 2 of the state constitution.
The case arose after Yono failed to timely pay property taxes owed on commercial real property he owned in Lansing. Following standard procedures under the General Property Tax Act, the Ingham County Treasurer, acting as the foreclosing governmental unit, foreclosed on the property and offered it for sale at public auction.
When the real property failed to sell at auction, the Treasurer deeded the property to the Land Bank for $1, a common practice under Michigan's tax foreclosure system. This transfer sparked Yono's constitutional challenge.
Yono's central argument focused on what he characterized as his "vested property right" in the equity of his real property. He contended this right equaled the property's fair market value minus the amount of unpaid property taxes and costs related to the tax foreclosure. Under this theory, Yono argued he was entitled to just compensation for any surplus equity beyond the tax debt.
The case highlights ongoing tensions in property tax enforcement between municipalities' need to collect delinquent taxes and property owners' constitutional rights. Michigan's General Property Tax Act provides specific procedures for tax foreclosure, but questions remain about how these procedures interact with constitutional protections.
Defendants moved for summary disposition, likely arguing that existing statutory procedures provide adequate due process protections and that no constitutional violation occurred. The specific arguments and reasoning from both sides were presented during oral arguments heard by the Michigan Supreme Court on April 10, 2025.
The Michigan Supreme Court's decision comes amid broader national discussions about property rights in tax foreclosure cases. Several states have faced similar constitutional challenges over whether surplus equity must be returned to former property owners after tax debts are satisfied.
The case involves the intersection of two important legal areas: property tax collection and constitutional takings law. Michigan's Takings Clause mirrors the federal Fifth Amendment's requirement that private property not be taken for public use without just compensation, but states may provide broader protections under their own constitutions.
The Land Bank Fast Track Authority, created to address blight and manage tax-foreclosed properties, has become a significant player in Michigan's approach to handling delinquent tax properties. These authorities typically acquire properties that fail to sell at tax auctions and work to return them to productive use.
Property tax foreclosure affects thousands of Michigan property owners annually, particularly in areas with declining property values or economic distress. The outcome in Yono v. County of Ingham could establish important precedent for how surplus equity claims are handled statewide.
The Michigan Supreme Court heard arguments under Chief Justice Megan K. Cavanagh, with Justices Brian K. Zahra, Richard H. Bernstein, Elizabeth M. Welch, Kyra H. Bolden, Kimberly A. Thomas, and Noah P. Hood participating in the decision.
While the full opinion details remain to be analyzed, the case represents a significant examination of property rights in the context of tax enforcement. The court's ruling will likely provide clarity for property owners, local governments, and land banks throughout Michigan regarding constitutional requirements in tax foreclosure proceedings.
The decision may also influence how other jurisdictions handle similar constitutional challenges to tax foreclosure procedures. As property tax collection remains a critical revenue source for local governments, balancing enforcement mechanisms with constitutional protections continues to generate litigation.
Legal practitioners specializing in property law, municipal finance, and constitutional law will closely examine the court's reasoning to understand its broader implications for property rights and government authority in tax collection matters.