The Wayside Church settlement is a federal class action resolution that requires 43 Michigan counties to return 80% of the surplus proceeds they kept after selling tax-foreclosed properties between January 1, 2013, and December 31, 2020. The settlement became fully final on January 5, 2026, and the claims administrator, Kroll Settlement Administration, is now reviewing submissions. First payments are expected in late June or July 2026.
For years, Michigan’s General Property Tax Act let counties foreclose on tax-delinquent property, auction it, and keep every dollar of the sale price regardless of how far it exceeded the debt. Wayside Church, a congregation in Van Buren County, owed about $16,750 on a youth camp property that the county sold in August 2014 for $206,000, keeping the full $189,250 surplus. That lawsuit, filed in December 2014 in the U.S. District Court for the Western District of Michigan, grew into the class action now paying out.
Who Is Covered
The class covers anyone who held a non-contingent interest in a property, such as ownership or a lien, that was foreclosed and sold by one of 43 participating Michigan counties between January 1, 2013, and December 31, 2020. Heirs and successors of eligible owners are also covered.
The participating counties span the Upper Peninsula and the western half of the Lower Peninsula. Six Michigan counties are not part of the settlement: Branch, Charlevoix, Clinton, Keweenaw, Luce, and Mecosta. Foreclosures handled by those counties, and foreclosures that occurred outside the 2013–2020 window, are not covered by this case.
Claims were filed on 3,728 parcels, representing roughly 74% of the available surplus dollars, with overall participation above 50%. The original claims deadline was September 5, 2023. Class counsel later asked the court to accept late claims, but anyone who has not yet filed should assume the window is closed unless Kroll confirms otherwise.
What You Actually Receive
Eligible class members with valid claims are entitled to 80% of the surplus from the sale of their foreclosed property. The surplus is the sale price minus the taxes, penalties, and fees that were owed.
That 80% figure is before attorneys’ fees. The district court approved fees of $7.8 million, roughly a 20% share of the recovery, which come out of the class fund. After that deduction, the average actual payout works out to about 64 cents on every dollar of surplus principal.
The settlement does not include prejudgment interest. That is a meaningful limitation for owners whose properties sold years ago. In his concurrence to the Sixth Circuit’s decision affirming the settlement, Judge Raymond Kethledge calculated that Wayside Church, had it sued individually under 42 U.S.C. § 1983, could have recovered roughly $300,000, counting the surplus, about $105,000 in prejudgment interest, and separately paid attorneys’ fees. Under the settlement, the church receives $121,120. Joining the class means accepting a lower recovery in exchange for a certain one.
When Payments Will Arrive
The settlement cleared its last hurdle on January 5, 2026, when the deadline to petition the U.S. Supreme Court expired without any filing. District Judge Paul L. Maloney had granted final approval on July 12, 2024, and the Sixth Circuit affirmed in an unpublished opinion on October 6, 2025.
As of early 2026, Kroll is reviewing claims for deficiencies. The first round of payments is expected in late June or July 2026. Payment amounts will vary parcel by parcel; Cass County alone has indicated it expects to pay approximately $1.4 million to eligible class members.
If Your Claim Has a Problem
Kroll is flagging claims with issues such as outdated addresses or missing information. If your claim is deficient, you will receive a notice by mail with 45 days to fix the problem. Claims that remain unresolved after that window will be rejected and will not be paid.
Two practical steps follow from this. First, if you filed a claim and have moved since, make sure Kroll has your current mailing address so a deficiency notice does not go to an old one. Second, if a notice arrives, respond inside the 45-day window; the deadline is firm.
How the Case Got Here
The plaintiffs argued that keeping surplus foreclosure proceeds was an unconstitutional taking under the Fifth Amendment. The district court initially dismissed the case on the ground that Michigan law did not recognize any right to the surplus, and the Sixth Circuit dismissed on separate procedural grounds in 2017.
Two later rulings reopened the door. In 2019, the U.S. Supreme Court’s decision in Knick v. Township of Scott allowed takings claims to proceed directly in federal court. In 2020, the Michigan Supreme Court held in Rafaeli v. Oakland County that retaining surplus foreclosure proceeds violated the Takings Clause of the Michigan Constitution. In May 2023, the U.S. Supreme Court ruled unanimously in Tyler v. Hennepin County that the practice violates the federal Takings Clause as well.
The Wayside Church settlement itself was negotiated through more than 30 mediation sessions over roughly 18 months via the Sixth Circuit’s mediation office, and was finalized in December 2022, before Tyler was decided. The Sixth Circuit, in affirming the settlement, held that its fairness had to be judged against the legal risks that existed at the time it was negotiated, not against the clearer picture that emerged later.
If Your Foreclosure Happened After 2020
The Wayside Church class period ends on December 31, 2020, so later foreclosures are not covered. In response to Rafaeli, the Michigan Legislature passed Public Acts 253, 255, and 256 of 2020, amending the General Property Tax Act to require that surplus proceeds from tax foreclosure sales be made available to former property owners. The amended law establishes a formal claims process with specific filing deadlines and requires that delinquent taxpayers be notified of their right to recover excess funds. Cities, townships, and land banks exercising a right of first refusal on foreclosed property must now pay fair market value so that any surplus is preserved for the former owner.
If your property was foreclosed after 2020, the statutory process under the amended General Property Tax Act, rather than the Wayside Church settlement, is the route to any surplus you are owed. The statutory deadlines are strict, and missing them generally forfeits the money.