The answer to your question is controlled by the language of section 78g, MCL 211.78g, added to the General Property Tax Act (GPTA or the Act), 1893 PA 206, MCL 211.1 et seq., by 1999 PA 123 (PA 123).  In 1999, the Legislature entirely rewrote the process for foreclosing liens for unpaid real property taxes.  Before the adoption of PA 123, the GPTA described two detailed processes for foreclosure of liens for unpaid property taxes, one process for liens purchased by private tax lien buyers at the annual tax sale, and a second process where no private buyer acquired the tax lien and the lien was bid to the State Treasurer by default at the annual tax sale.  Public Act 123 eliminated the annual tax sale process, replacing it with a single foreclosure process where liens for unpaid taxes are foreclosed by foreclosing governmental units in each county, defined as the county treasurer or the State,[1] if the county elects to have the State foreclose delinquent taxes.  MCL 211.78(7)(a).[2]

As a preliminary matter, it is helpful to note the property tax collection process.  Real property taxes are assessed and collected under the GPTA.  They are assessed and, in the first instance, collected by the city, township, or village treasurer.  Real property taxes are due and payable in two installments each year.  Except where a local charter provides for a different date, property taxes become a lien on property on their due dates, July 1 (summer taxes), MCL 211.44a(4), and December 1 (winter taxes), MCL 211.40.  Taxes not paid by March 1 of the following year are delinquent and the tax rolls – the list of unpaid taxes and those obligated to pay – are turned over (returned) to the county treasurer for collection.  MCL 211.55.  Before March 1, taxes are paid to the assessing municipality – a city, township, or village treasurer.  Once the taxes are returned as delinquent to the county treasurer, taxes, interest, penalties, and fees are paid to the county treasurer. 

Before PA 123 was enacted, tax liens were offered at tax lien sales in May of the third year of delinquency, where anyone could purchase the tax lien.  The tax lien sale was followed by a one-year redemption period.   If not redeemed within the one-year period, the property was deeded to the private lien buyer for final foreclosure under MCL 211.140 – 211.142, or, if there was no private buyer, the property was deeded to the State for foreclosure under MCL 211.131c and 211.131e. 

With respect to this annual tax sale process, the GPTA previously provided two detailed processes for foreclosure of tax liens acquired at the tax sale, one process for liens purchased by private tax lien buyers and a second process for parcels bid to the State at the tax sale.  Both afforded ample due process including: detailed notice requirements, an opportunity for owners to challenge the underlying taxes, either in court or at an administrative hearing, and specific means by which former owners or interest-holders could extinguish the interest created by the sale of the tax lien, including time limitations and amounts necessary to redeem at each stage of the process.

Public Act 123 repealed the former tax lien sale provisions and added sections 78 through 78o to the GPTA, MCL 211.78 – 211.78o, implementing a new process for forfeiting and foreclosing delinquent taxes.  As amended by PA 123, the GPTA prescribes an entirely different detailed process for foreclosure of tax liens by creating foreclosing governmental units, and by including notice requirements, administrative and judicial hearings, redemption rights of interest-holders, and the amounts necessary to redeem at each stage of the process.  But PA 123 contains no process for extinguishing or foreclosing liens acquired under subsection 78g(5).  As described in your request, certain individuals, who are strangers to title, are attempting to resurrect the repealed tax lien sale process in existence before the adoption of PA 123.  But a review of the language of MCL 211.78g and the broader legislative context in which PA 123 was adopted to replace the former tax lien sale, does not support their actions.

Neither the GPTA nor any other law limits who may pay taxes, delinquent or otherwise, on a parcel of property.  For example, taxes may be paid by an owner, a mortgagee or other lien holder, a relative of an owner, or a complete stranger.

Your question involves the payment of taxes by a stranger to title once the property has been forfeited by the county treasurer under GPTA section 78g, MCL 211.78g, which addresses the redemption of forfeited property.[3]  Subsection 78g(3) authorizes the redemption of forfeited property:

 

Property forfeited to the county treasurer under subsection (1) may be redeemed at any time on or before the March 31 immediately succeeding the entry of a judgment foreclosing the property under section 78k or in a contested case within 21 days of the entry of a judgment foreclosing the property under section 78k upon payment to the county treasurer of [taxes, penalties, interest, and fees].  [MCL 211.78g(3); emphasis added.]

Subsection 78g(5) addresses the interest acquired by the person who redeems forfeited property:

If property is redeemed by a person with a legal interest as provided under subsection (3), the person redeeming does not acquire a title or interest in the property greater than that person would have had if the property had not been forfeited to the county treasurer, but the person redeeming, other than the owner, is entitled to a lien for the amount paid to redeem the property in addition to any other lien or interest the person may have, which shall be recorded within 30 days with the register of deeds by the person entitled to the lien.  The lien acquired shall have the same priority as the existing lien, title, or interest.  [MCL 211.78g(5).]

You ask whether subsection 78g(5) creates a lien in favor of a stranger to title who redeems forfeited property. 

The primary goal of statutory interpretation is to give effect to the intent of the Legislature.  Title Office, Inc v Van Buren County Treasurer, 469 Mich 516, 519; 676 NW2d 207 (2004).  Where the language of a statute is clear and unambiguous, it must be assumed that the Legislature intended its plain meaning and the statute must be enforced as written.  Lash v Traverse City, 479 Mich 180, 187; 735 NW2d 628 (2007).  But if a statute is ambiguous, construction is appropriate.  Whitman v City of Burton, 493 Mich 303, 312; 831 NW2d 223 (2013).  A statutory provision is ambiguous only if it irreconcilably conflicts with another provision or it is equally susceptible to more than a single meaning.  Fluor Enterprises, Inc v Dep’t of Treasury, 477 Mich 170, 177 n 3; 730 NW2d 722 (2007).

Again, subsection 78g(3) allows the redemption of property forfeited to the county treasurer.  And subsection 78g(5) addresses what happens when a person redeems the property following forfeiture.  The first sentence of subsection 78g(5) sets forth two concepts, (1) “the person redeeming does not acquire a title or interest in the property greater than that person would have had if the property had not been forfeited to the county treasurer,” and (2) “the person redeeming, other than the owner, is entitled to a lien for the amount paid to redeem the property in addition to any other lien or interest the person may have.”  And the second sentence qualifies the lien provided for in the first sentence:  “The lien acquired shall have the same priority as the existing lien, title, or interest.”  MCL 211.78g(5).

Read in isolation, the second concept set out in the first sentence of subsection 78g(5) is susceptible to more than a single meaning.  The language can be read to provide that anyone, including a stranger to title who redeems property under subsection 78g(3), obtains an interest in the redeemed property and the right to a lien.  Alternatively, it can be read to provide that only a person with an existing interest who redeems under subsection 78g(3) obtains a right to a lien.[4]  But the opening language of the first sentence of subsection 78g(5) and the language of the second sentence do not support the conclusion that a stranger to title can acquire a lien by redeeming forfeited property.  Nor does the language of subsection 78g(3) itself, or the broader legislative context in which PA 123 adopted the current process to replace the former process, support that conclusion.

The first possible interpretation, the one discussed in your request, that anyone redeeming under subsection 78g(3) obtains a “legal interest” in the redeemed property and the right to a lien, is not supported by the language of subsection 78g(3).  That subsection has no words creating an interest in the redeemed property; it merely describes the process for redemption after forfeiture.  Halloran v Bhan, 470 Mich 572, 577; 683 NW2d 129 (2004) (nothing may be read into an unambiguous statute that is not within the manifest intent of the Legislature as derived from the words of the statute itself).

Moreover, the first sentence of subsection 78g(5) states that “the person redeeming does not acquire a title or interest in the property greater than that person would have had if the property had not been forfeited to the county treasurer.”  Consistent with this legislative statement, the first sentence does not create a new title or interest in a stranger to title who redeems forfeited property.  And the second sentence of subsection 78g(5) limits the lien acquired under the first sentence to “the same priority as the existing lien, title, or interest.”  In limiting the priority of the new lien to “the same priority as the existing lien, title, or interest,” the Legislature made clear its intent, consistent with the first sentence of the same subsection, that someone redeeming does not obtain a new interest, but only an additional lien of the same priority of the original lien if that individual had an existing lien.  This leads to the result that a redeeming party with no prior lien, title, or interest, still has no lien, title, or interest.

Furthermore, statutory language must be read in context and assigned such meaning as is “in harmony with the whole of the statute, construed in the light of history and common sense.”  Sweatt v Dep’t of Corrections, 468 Mich 172, 179; 661 NW2d 201 (2003).  Limiting the lien acquired under subsection 78g(5) to those who already held a lien, title, or interest in the forfeited property is consistent with the Legislature’s elimination of the former tax lien sale process.

As noted above, before the adoption of PA 123, the GPTA contained two detailed processes for foreclosure of tax liens acquired at the annual tax sale, one for liens purchased by private tax lien buyers and a second for parcels bid to the State at the tax sale.  Again, these two processes included detailed notice requirements and provided owners with an opportunity to challenge the underlying taxes, and specific means by which former owners or interest-holders could extinguish the interest created by the sale of the tax lien. 

Under PA 123, there is a detailed process for foreclosure of tax liens by foreclosing governmental units, including notice requirements, administrative and judicial hearings, redemptions rights of interest-holders, and amounts necessary to redeem at each stage of the process.  Significantly, the Legislature eliminated the former tax lien sale process and replaced it with a defined process of foreclosure by foreclosing governmental units—not private individuals.  Attempts to resurrect the tax lien sale process by reference to the first sentence of subsection 78g(5) are inconsistent with the Legislature’s elimination of the annual tax lien sale.

The language of subsection 78g(5) does not allow a stranger to title to acquire an interest in forfeited property.  Rather, it allows existing interest-holders in forfeited property to protect their interests from foreclosure by redeeming the property, at the same time granting them a lien for the amount they paid on behalf of the owner.

In addition, allowing strangers to title to redeem taxes and acquire an interest in property would mean the Legislature replaced a highly publicized annual public tax lien auction, which protected owners by requiring bidders to bid down the interest they were willing to accept in the property, with one that creates a race to the county treasurer to see who can pay delinquent taxes first and acquire the redemption lien.  

In summary, interpreting subsection 78g(5) as allowing a stranger to title to acquire an interest in forfeited property leads to an untenable scheme—tax foreclosure with no defined process.  It is also inconsistent with the remaining language of subsection 78g.  It is inconsistent with the history of property tax foreclosure and the Legislature’s elimination of the tax lien sale process.  And it is contrary to the legislative purpose in eliminating a detailed process for acquiring and foreclosing privately-held tax liens to assert that the Legislature created a means by which strangers to title could pay the taxes and acquire an interest in property, with no mention of the process by which existing interest-holders could extinguish that interest or the redeeming party could foreclose the lien.

Before enactment of PA 123, the GPTA provided a specific means by which strangers to title could acquire an interest in property by purchasing the delinquent tax lien at the annual tax lien sale.  And the Act provided specific means by which existing interest-holders could extinguish the interest acquired by strangers to title through the tax sale process.  With the repeal of those provisions and the adoption of the language set forth above in subsection 78g(5), the Legislature made clear its intent that current interest-holders can protect their interests from foreclosure, but that strangers to title can no longer acquire an interest in tax-delinquent property by paying the delinquent taxes.

It is my opinion, therefore, that because MCL 211.78g(5) creates a lien for the amount of taxes paid to redeem forfeited property only where the redeeming party already holds an “existing lien, title, or interest,” a stranger to title cannot acquire any interest in forfeited property by paying forfeited delinquent property taxes.

                                                                       
BILL SCHUETTE
Attorney General

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[1] The State is currently the foreclosing governmental unit in 12 counties:  Branch, Clinton, Dickinson, Eaton, Iosco, Iron, Kalkaska, Keweenaw, Livingston, Luce, Mecosta, and Shiawassee.