By Brian Massie, A Watchman on the Wall
Thanks to the Lake County lobbyist s for sending us this article.
Cuyahoga County took millions from property owners through unconstitutional foreclosure practices, lawsuit claims
- Updated: Jun. 27, 2024, 1:05 a.m.|
- Published: Jun. 26, 2024, 4:29 p.m
By John H. Tucker, cleveland.com
CLEVELAND, Ohio – A lawsuit accuses the Cuyahoga County government of unlawfully taking millions of dollars in home equity from local property owners who fell behind on their taxes over the past two decades.
The complaint, filed Monday in Common Pleas Court, alleges that the county has relied on tax-deed mechanisms to take possession of private homes from delinquent residents without compensating them with the property’s market-value surplus following foreclosure.
Though that method is permitted by state statute, it flies in the face of the U.S. and Ohio constitutions, representing “a systematic, institutionalized, multi-decade practice and policy to profit from property owners beyond the taxes and fees those property owners owed,” the complaint alleges. The practice largely affects residents who are poor, elderly or from minority communities, it claims.
A county spokeswoman said it had not been served with a copy of the complaint and declined to comment.
The lawsuit centers on the process of foreclosure. Typically, when a homeowner falls behind on property taxes, a county can enforce a tax lien by foreclosing and selling the property at an auction, but then return any surplus value — the difference between the owed taxes and the property value — to the former owner, according to the lawsuit.
But since 2008, an Ohio law has allowed counties to deem such properties abandoned, allowing them to take ownership of a property without returning the surplus value, no matter how small the tax bill or how valuable the seized property, the lawsuit claims. That practice is unconstitutional and violates a recent U.S. Supreme Court ruling, the complaint alleges.
The lawsuit lists as defendants Cuyahoga County Treasurer Brad Cromes and the county itself.
The four named plaintiffs in the complaint — two from Cleveland and two from Beachwood — are former Cuyahoga property owners who fell behind on property taxes and now claim they’re victims of equity theft.
One woman, for example, owed just under $21,000 in back taxes on her single-family home in Cleveland’s Buckeye-Shaker Square neighborhood, but the property taken by the county was worth more than $172,500, according to the lawsuit.
The plaintiffs are represented by law firms in Cincinnati and Chicago, including former Ohio Solicitor General Benjamin M. Flowers. Their lawyers are seeking class-action status on behalf of thousands of Cuyahoga residents who potentially lost millions of dollars in property surplus values.
The case has been assigned to Common Pleas Judge Jeffrey Saffold.
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