In Elm Investment Co. v. City of Detroit, Michigan Court of Appeals, No. 309738, May 14, 2013, a local Michigan tax lien for 2005 property taxes survived a judgment of foreclosure because the property taxes for 2005 were assessed to the property on December 31, 2004, and became a debt due to the local unit of government at that time. The taxes were due prior to the time the county treasurer took absolute title to the property on March 31, 2005.
The judgment of foreclosure did not extinguish the tax debt. The lien that secured the 2005 taxes arose by operation of law on July 1, 2005, and that lien was security for the 2005 property taxes, which were already a debt due to the city. Therefore, when the taxpayer acquired the property at an auction on September 9, 2005, the property was subject to the lien that arose on July 1, 2005, that secured the 2005 property taxes that were imposed before the treasurer took title. The tax lien that arose on July 1, 2005, was not extinguished because it was not in existence at the time the fee simple title vested in the treasurer on March 31, 2005, pursuant to the judgment of foreclosure.