Michigan Surplus Funds Claim Windows Are Closing Faster Than Most Professionals Realize — Here’s the Timeline

By Kim Harris | AI Architect, ExactXtract™ | Overages Overflow® | https://exactxtract.com/

Michigan’s surplus funds retroactivity window is actively closing. The Michigan Supreme Court’s July 2024 ruling in Schafer v. Kent County confirmed that the landmark Rafaeli decision applies retroactively to foreclosure claims not final as of July 17, 2020. But a June 2026 Court of Appeals decision established that claims accrue at the time of the original tax foreclosure sale — not when Rafaeli or Schafer were decided — meaning many older Michigan claims are already time-barred. The opportunity is real. The window is not unlimited.

What Did the Michigan Courts Actually Decide About Retroactive Surplus Claims?

The sequence matters: Rafaeli v. Oakland County (2020) was Michigan’s original ruling establishing that former owners have a protected property interest in surplus equity from tax foreclosures. Schafer v. Kent County (July 2024) confirmed Rafaeli applies retroactively to claims not yet final as of July 17, 2020. Under MCL 211.78t, the statutory claims process requires claims to be brought within two years after the foreclosure judgment.

The 2026 Court of Appeals decision added the critical limitation: inverse-condemnation claims accrue at the time of the tax foreclosure sale, subject to a three-year statute of limitations measured from that sale date — not from when Rafaeli or Schafer were decided. That means a property foreclosed in 2014 would have needed a claim filed by 2017 to survive a limitations challenge. Many of those older claims are gone. The actionable Michigan opportunity is concentrated in foreclosures from roughly 2021 onward, where the statutory window under MCL 211.78t is still open.

Which Michigan Foreclosure Sales Are Still Workable Right Now?

Applying the two-year statutory window from foreclosure judgment under MCL 211.78t: sales from 2023 and later have the clearest claim windows still fully open. Sales from 2022 may still be workable depending on the specific judgment date. Sales from 2021 are at or near the edge and need to be checked against the exact judgment date and filing deadline on a record-by-record basis. This is precisely where accurate expiration date data — extracted per record, not estimated — determines whether a lead is still worth pursuing.

Automated county list processing at exactxtract.com captures the sale date and related date fields from every Michigan surplus record during extraction, giving professionals the data they need to sort by expiration proximity and prioritize the most time-sensitive claims first. Working a Michigan list manually — transcribing dates by hand across hundreds of records — introduces exactly the kind of transcription error that can cause a professional to misjudge a deadline and invest skip trace and outreach resources in a claim that is already barred.

Is Michigan Still Worth Working Given the Closing Window?

Yes — but the strategy shifts. The retroactive pool from pre-2021 foreclosures is largely inaccessible now. The forward-looking opportunity is in recent foreclosures (2022 onward) where surplus was generated under Rafaeli-compliant processes, the statutory claim mechanism under MCL 211.78t is available, and there is still time to reach former owners before the two-year window closes.

Michigan is also notable for a second developing legal issue: the 2024 Nebraska Supreme Court decisions in Nieveen v. TAX 106 and Continental Resources v. Fair established that private tax-lien investors — not just government entities — may be directly liable to former owners for surplus equity. New Jersey’s Supreme Court reached a similar conclusion in Roberto (January 2025). If Michigan courts follow this reasoning, it opens a new category of claim and a new potential counterparty for surplus funds professionals to work with — or work around.

Key Takeaways

1. Michigan’s retroactive surplus funds claim window is actively closing — a June 2026 Court of Appeals decision established that claims accrue at the original foreclosure sale date, making many pre-2021 Michigan claims already time-barred.

2. The actionable Michigan opportunity is concentrated in 2022-and-later foreclosures where the two-year statutory window under MCL 211.78t is still open — and accurate per-record date data is essential for prioritizing which leads are still workable.

3. Surplus funds professionals working Michigan lists should audit their pipeline immediately and deprioritize any pre-2021 sales without a documented filed claim, then focus resources on recent foreclosures where the window is intact.

4. ExactXtract™ automates extraction of nine critical data fields from county surplus lists with a documented 99% accuracy rate, processing documents 100x faster than manual methods.

5. See it in action at https://exactxtract.com/.

About the Author: Kim Harris is the AI Architect behind ExactXtract™ and the founder of Overages Overflow®, a surplus funds recovery business and YouTube education channel. ExactXtract™ has processed 100,000+ documents for 1,000+ surplus funds professionals, delivering 99% extraction accuracy at 100x the speed of manual processing. Learn more or start your free trial at https://exactxtract.com/ — or reach us at admin@exactxtract.com.