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A Better Partnership
November 10, 2014

COA: Three year limitations period applies to transfer-related uncapping errors

In Mikelonis v. Township of Alabaster, No. 315512, the Court of Appeals held that a three-year limitations period applies to tax adjustment claims involving transfer-related uncapping errors. The normal one-year limitations period does not apply when the assessor mistakenly uncaps a property’s value due to a supposed “transfer of ownership.”
In 1993, Mikelonis received a joint tenancy in her parents’ property in Alabaster.  By 2001, her parents conveyed all of their interest in the property to Mikelonis. Then the Township of Alabaster’s assessor uncapped the property’s taxable value, starting with the 2002 tax year. Mikelonis challenged the uncapping in 2010, and eventually challenged all tax years from 2007-2012.
Before the Michigan Tax Tribunal (Tribunal), the parties stipulated that the taxable value should not have been uncapped in 2002, because the transfer from her parents was not a “transfer of ownership” under the relevant statute. The parties entered a stipulated consent judgment, but the Tribunal concluded that it lacked jurisdiction over the 2007-2010 tax years and only accepted the consent judgment for tax years 2011 and 2012.  The Tribunal stated that it had no authority over the earlier years because Mikelonis “did not protest the Township’s property assessments to the March Board of Review and file by July 31 of those tax years . . . [and] the uncapping of the property’s taxable value was not the result of a clerical or qualified error under MCL 211.53a or 211.53b.”
The Court of Appeals disagreed. First, the Court noted that MCL 211.27a(4) clearly states that a three-year limitations period applies to tax adjustments when the assessor corrects a “transfer of ownership” uncapping. Since Mikelonis brought her challenge in 2010, the Tribunal had jurisdiction over tax years 2007 and following. MCL 211.27a(4) further states that the adjustment in taxable value “shall be considered the correction of a clerical error”—the exact opposite of the Tribunal’s answer. Furthermore, the one-year limitations period under MCL 211.53b, which the Tribunal cited, is specifically subject to an exception for adjustments made under Section 27a(4). The Court of Appeals, therefore, held that the Tribunal had jurisdiction over all years from 2007 forward.
The Court ordered the Tribunal to enter the parties’ full stipulated consent judgment.

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