May 23, 2015
We discuss here the power of a lis pendens action, which is the combination of a law suit to force a seller to perform combined with a public notice to all prospective purchasers and mortgage lenders that the buyer in the litigation has a claim to the title to the real estate.
In addition to litigation — which always runs the risk of becoming expensive, there is another tool available under Ohio law that should have the effect of preventing a seller from conveying title to a second buyer or mortgage lender free from claims of the buyer number 1: An Affidavit of facts relating to title.
Ohio Revised Code Section 5301.252 sets forth the requirements for an Affidavit of Facts Relating to Title. Essentially, one includes the legal description of the disputed land, and then recites the name of the owner and the recording reference for his deed, along with the facts underlying the buyer’s claim. So, if a buyer has a contract to buy real estate that the seller is breaching, one attaches that contract to the Affidavit, recites that pursuant to that Contract the buyer has the right to buy the subject property and places that claim of record.
A subsequent buyer “should” not buy the land, as long as his title examiner catches the claim (which he should). (We have seen circumstances where subsequent buyers blow past these claims.)
Thus, the seller of real property is placed in the position of needing to address the buyers’ claims before he can sell the property to another, or mortgage the property.
An Affidavit of Facts Relating to Title can be a powerful tool to force sellers to deal with a title claim from a buyer whom he would rather ignore.