(CN) – A group of Detroit homeowners claimed the city overtaxed thousands of residents in a class action filed in federal court on Thursday.
Flossie Byrd, Deborah Howard, Jeffrey Stevenson and William and Billie Hickey sued the city, Mayor Michael Duggan, Wayne County and other city and state officials for allegedly violating their due-process rights.
“The city failed to notify any Detroit homeowners of their brand-new property assessments until it became virtually impossible for any homeowner to appeal the determination,” the complaint states.
As a result, many homeowners were allegedly forced “to pay more than they should owe, face delinquency, or even fall prey to property tax foreclosure.”
After discovering that the notices would be sent late, “the city of Detroit scrambled to announce remedial measures that were so poorly communicated that they deprived all Detroit homeowners of meaningful notice and an opportunity to appeal,” the complaint states.
According to the lawsuit, residents who want to appeal their assessments must go through three levels of review boards, starting with the Board of Assessors.
Facing a Feb. 18 deadline, 260,000 homeowners received their assessments and notices of the right to appeal no earlier than Feb. 14, 2017, according to the lawsuit.
“Knowing they sent all notices late, the Detroit defendants made halfhearted — and constitutionally inadequate — attempts to remedy the situation that sowed layer upon layer of legal error and public confusion,” the complaint states.
The second level deadline was March 13, 2017. The final appeals level, the Michigan Tax Tribunal, had a July 31 deadline that year.
The plaintiffs asked the court for a declaration that their rights were violated, along with an order allowing them to appeal their 2017 taxes retroactively.
They also seek a requirement that the notices be sent with enough time for an appeal, with a 30-day extension given to homeowners who receive late notices.
When home values plummeted in 2008, Detroit did not adjust its tax assessments, according to the complaint.
“As a result, most of the city’s property taxes remained dramatically inflated. These excessive taxes violated the Michigan Constitution, which caps property tax assessments at 50 percent of a property’s true cash value, otherwise known as fair market value,” the complaint states.
The plaintiffs additionally accused Wayne County of unjust enrichment by foreclosing on delinquent homeowners who were unable to appeal their assessments. Stevenson’s home is one of those in danger of foreclosure.
With this in mind, the lawsuit calls for a moratorium on Wayne County foreclosures, as well as damages in the amount of the assessed value of foreclosed properties.
The 2017 reassessment came as a result of the state taking over Detroit’s Assessment Division in 2014. The plaintiffs also cited a Detroit News article estimating that the city’s homeowners were overtaxed by $600 million from 2010 to 2019.
Rami Fakhouri of the Chicago law firm Goldman Ismail Tomaselli Brennan & Baum is representing the plaintiffs. Fakhouri said he looks forward to litigating the claims of “Detroit homeowners who are seeking to vindicate their constitutional right to fair and adequate notice of their property tax obligations.”
“Many Detroiters were deprived of a realistic opportunity to appeal their improperly-assessed taxes, leading them to face excessive tax bills, delinquency, and even foreclosure,” he said.
The Detroit Ombudsman did not immediately respond to an email request for comment.