Lawsuit Filed in Cleveland Over Foreclosure Practices in Cuyahoga County

By Elias DaSilva | September 13, 2024

A lawsuit has been filed in Cleveland, Ohio, accusing Cuyahoga County’s administration and its treasurer of improperly seizing millions of homes from local homeowners who fell behind on their tax payments over the past twenty years.

The legal case, filed this week in the Court of Common Pleas, claims that the county has used tax procedures to acquire private properties from delinquent residents without providing any compensation when the foreclosed property had a higher market value after the foreclosure process was completed.

While this practice is legal and sanctioned by state law, it contradicts the constitutional norms of the U.S. and the state of Ohio. The lawsuit also states that this has become an institutionally systematic practice, ongoing for several decades, where the county profits at the expense of property owners by taking properties that exceed the value of the taxes and fees they owe. This situation directly affects low-income citizens, the elderly, and people belonging to minority groups.

The lawsuit mainly focuses on foreclosures. Normally, when a property owner falls behind or fails to pay the taxes owed on their property, the county can exercise the right to foreclose through a foreclosure process and then sell the property at a public auction. The county is then required to return to the former owner the value exceeding the debt, which corresponds to the difference between the taxes owed and the property’s current value.

However, an Ohio law enacted in 2008 allows counties to label these properties as abandoned, permitting them to take possession without returning the excess value, regardless of the size of the tax bill or the property’s value. This practice is unconstitutional, according to the lawsuit, and violates a recent decision by the U.S. Supreme Court.

Four individuals are listed as plaintiffs, some from Cleveland and others from Beachwood, who were former property owners in Cuyahoga County. They fell behind on their property taxes and claim to be victims of equity theft.

On the other hand, a county spokesperson mentioned that they had not yet received a copy of the lawsuit and declined to comment.

Available Foreclosures:

Cleveland: 150 Beachwood: 25