I had no idea.
As a resident of Michigan, I hadn’t heard of unclaimed real estate until I found out about it on the National Geographic Channel.
It was a surprising news discovery.
I thought I was being spied on.
But as it turns out, the state has one of the highest unclaimed rate in the nation.
“I don’t think the average person has a clue,” said Scott Dominguez, a senior policy analyst at the Michigan chapter of the American Institute of Certified Public Accountants (AICPA).
He was referring to the state’s relatively high unclaimed-property rate, which stands at 9.8 percent.
“It’s pretty significant,” Dominguesaid.
The average unclaimed value in Michigan is $3,200.
Michigan has more than 1,300 counties.
The highest unset property value is $1.8 million in Michigan’s Upper Peninsula, according to data compiled by the Michigan Department of Community Affairs and analyzed by the Associated Press.
That is about half of the average value in the rest of the state.
In other words, there is a lot of unset land.
“Unset” means that the property was not declared by a property title insurer or the landowner.
It can also mean that a lot has been abandoned.
“If the property is abandoned, the county will be entitled to the entire amount of the unclaimed amount,” said Domingue.
He said it is difficult to get a complete count because there is no public record of when property was unclaimed, or when it was acquired by someone.
There are no state statistics for counties that are unclaimed.
In addition, unclaimed land is not tracked by the state, making it difficult to track the true rate.
And many unclaimed areas are near airports.
That means that many of those areas can be a “chicken or egg” situation, Domingued said.
If you live in an area where there are many unoccupied buildings, you can be on the hook for thousands of dollars to someone who was supposed to be using the property.
The cost to acquire a property is not covered by insurance, and it can be hard to prove ownership of the property if you have no documentation to prove it.
There is no state-mandated reporting system for unclaimed parcels, said Domenico Mancini, an economist with the Michigan Economic Development Corp. The most recent statistics from the state showed that there were about 13,000 unclaimed homes and properties in Michigan.
Mancino said there is little information available to the public about unclaimed buildings.
He noted that the Department of Commerce has not collected any unclaimed tax revenue for the state since 2006.
The Michigan Department is working to develop a state unclaimed asset tracking system, but said it would take years to complete.
“This is something that’s been on our radar for a while,” Mancinisaid.
“The real estate market has really taken off since this whole property-for-profit thing happened in Michigan,” said J.B. Pacheco, a professor at Michigan State University.
“A lot of these unclaimed sites are a little bit hidden, but they’re out there and they’re available for some reason.”
He said the potential for real estate owners to get into debt in the unincorporated areas of the region are not limited to unclaimed items.
“We’re dealing with real estate that’s being developed in the surrounding areas of town, which could be a very attractive location for developers to come in and redevelop that property,” he said.
It also isn’t uncommon for people to have the wrong addresses when they purchase a home or office.
“Most of the people that are buying homes and offices are the ones that live in the area,” said Pacheos.
Panchayats, which provide subsidized housing to low-income families, have become a major source of revenue for counties.
But it’s unclear whether that revenue can be counted on to cover the unsold homes and buildings in counties that have low unclaimed rates.
“You don’t really know if that revenue will cover the cost of that unclaimed parcel until the county has a comprehensive accounting of that parcel,” said Mancinosaid.
That’s something the state is working on, and Domingo said he believes the state will have a more accurate record in the coming years.
Domingosaid is hopeful that a new statewide accounting system, similar to the one used by the Department, will come to pass.
The state already has a statewide system for collecting property taxes, but it does not provide for a comprehensive account.
“There is a big gap between what’s going on with county and city tax collections and what’s happening with the state property tax,” Domenisco said.
“Right now, there’s a gap between the state tax collection, the local property tax collection and the statewide property tax collections.”