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Author Archives: Christopher P. Finney

Ohio Property Tax Valuation: Increase in interest rates alone does not void application of recent sale

Author By Christopher P. FinneyPosted on

As attorney Casey Jones of this firm wrote last year, a recent arms length sale of real property generally is — under Ohio law — the best evidence of the value of property for tax purposes.  If that’s what you paid, that generally is the value for property tax purposes.  And rebutting that sale price as the taxable valuation can be very difficult.

Further, as I wrote in 2022, that reality hit a purchaser of an apartment complex in Clermont County when he got a whopping valuation increase of $26 million increase in valuation and a retroactive tax increase — post closing — of $682,000.  Ouch.

Well, that apartment-purchasing property owner appealed its property valuation for 2023 (only 18 months after the closing) seeking after-the-fact tax relief, arguing that the sudden rise in interest rates increased the rate of return investors expect from apartment properties, and therefore the value of the property fell from the 2021 sale price.

The Ohio Board of Tax Appeals disagreed and just issued its decision for that 2023 tax year — it retained that value at $32.600,000.  Ouch, again.

You may read that decision here.

Benefits of Attorney Representation in the North Bend, Ohio Hillside Development Case

Author By Christopher P. FinneyPosted on

We are pleased to present this blog entry from guest author, Eric Russo, executive director of The Hillside Trust, a non-profit organization dedicated to the preservation and thoughtful use of our region’s hillsides. Eric has served this organization for over 35 years. His opinion is not a paid endorsement of the Finney Law Firm. Rather, he has worked with multiple other highly qualified land use attorneys that have helped deny or overturn various hillside developments that have posed threats to their communities.

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On February 3, 2025, the North Bend Planning Commission voted 4-0 against a hillside development proposed above St. Annes Dr in the Aston Oaks Community.  The residents of St. Annes hired the Finney Law Firm and worked in opposition with The Hillside Trust.

I have been involved in scores of hillside development reviews throughout the Greater Cincinnati and Northern Kentucky region.  The Hillside Trust often testifies in these cases when it determines that a project presents a host of issues that are detrimental to the geological integrity of a hillside and/or to the safety of the surrounding community. It provides this testimony free of charge as a public service.

There are instances where an impacted community has reached out to The Hillside Trust seeking its expertise, particularly when a development is posing an environmental threat.  One of my first recommendations in these situations is to encourage the community to engage the services of a qualified land use attorney. My reasoning is simple. When you have expert legal representation, two things will happen.  First, your side is allotted the requisite time to present all arguments against the development.  Often this will include legal matters related to land use and zoning that are less familiar to the lay person.  Having additional time on your side will be an added benefit, considering that both proponents and opponents alike are usually allotted a set amount of time to testify, typically ranging from 2 minutes to 5 minutes per person.  Second, your attorney is afforded the opportunity to cross-examine the testimony of the development team’s professionals, just as his or her attorney can cross-examine the witnesses of its opponents. Based on my experience, when a developer has legal representation, and opponents do not, the decision invariably will side with the developer.

I commend the neighbors of St. Annes Dr for investing in attorney representation to protect the financial and environmental interests of their street. The North Bend Planning Commission hearing lasted well over 4 hours, including a three-hour Power Point presentation of expert witness testimony coordinated by Rebecca Simpson, an attorney with the Finney Law Firm. I have no doubt this expert legal representation aided in the ultimate denial of this environmentally consequential hillside development.

As the real estate market continues to escalate in value, there are substantial profits that will be made from development.  Consequently, developers are building attorney fees into the costs of doing business. Short of owning the piece of development property in question, a community’s best tactic is to have legal representation by an experienced land use attorney.  It does not guarantee they will win the case. However, their concerns will be represented far more equitably in their quest to level the playing field of administrative review.

What should I expect with Ohio property tax abatements?

Author By Christopher P. FinneyPosted on

We have gotten calls from property owners inquiring about how their municipal property tax abatement should work.

The inquiries usually commence with a misunderstanding that an exemption (typically a 100% exemption on improvements for some period of time) means that the owner will never pay taxes on an assessed value for more than that in place at the time the abatement commenced.  This is not so.

The Ohio statute that empowers municipalities to provide property tax abatements is Revised Code Section 3735.67.

Section (A) of that statute allows an abatement “of a percentage of the assessed valuation of a new structure, or of the increased assessed valuation of an existing structure after remodeling began.”  So, two things there: (a) the assessment is not on the land value and (b) the abatement is not for a specific amount of the cost of the improvements at the time they are built, but “a percentage of the assessed valuation of ” those improvements.  Therefore, at the commencement of the abatement, the County Auditor needs to assess the value the improvements added to the property as a percentage of the value of the improvements. And as the abatement period rolls forward, to apply that percentage on the improvement value.

In ensuing triennial reassessments by the County Auditor, he should then calculate separately the value of the land and the value of the improvements for every parcel in the County. As to the abated parcel, that initial percentage attributable to the value of the abatements (as a percentage of the improvement number) should be abated (either at 100% or whatever percentage of the abatement as was initially agreed or granted)  The land value along with the new value of the unabated percentage of the improvements would be subject to taxation.

The reason taxpayers are inquiring (or one of the reasons) is that our upwardly-dynamic housing market (and in some cases commercial market) since the COVID pandemic means that over the three-years of the triennial, some neighborhoods are seeing cumulative valuation hikes overall of 50% or more.  Even if the abatement is properly included in the tax bill calculations, when compared to the initial pre-abatement valuation, some taxpayers assume “there must have been some mistake” in calculating that abatement.  Sometimes there is a mistake, many times there is not — or not enough of a mistake to wade into the adjustment process to make it worthwhile.

It’s fairly easy to calculate the abatement that is due with entirely new construction: If that abatement is 100% of increased improvement valuation for a period of time, during that interval, only the land would be taxes, and even that land value will (may) go up in valuation over time.

But calculating the abatement due to renovations are more complicated.

In the case of a renovation the calculation of what is abated: “it’s complicated.”  Imagine a property with an initial $100,000 in land value and $400,000 in building value before the renovation.  And to that existing structure, the owner adds a building addition along with a kitchen and two-bathroom do-over.  The total improvements to the property cost $200,000.

Three years later, the Auditor makes a new triennial valuation of the property, assessing the land at $250,000, and the building (before abatement) at $750,000, for a total valuation before considering abatement of $1,000,000.  What amount of the valuation should be abated?

The proper calculation would consider that the improvements are 33.3% abated ($200,000 of improvements are 33.3% of the $600,000 value of the improvements at the time they were made [$400,000 in initial value + $200,000 of improvements] [these numbers assume these were the correct “value of these respective improvements at that time.])  Thus, the land value is now $250,000 and two-thirds of the improvement value would be $500,000, for a total post-assessment taxable valuation of $750,000.

Now, one client who recently called said “wait a minute, the percentage of increase in the land valuation exceeded the percentage of increase in the building valuation.”  From a purely mathematical perspective, that is correct in the foregoing example: 250% increase in land valuation versus a 25% increase in the improvement valuation.  I get it.  But as we walked thru the land valuation issues given the dynamic marketplace, the land valuation was not wrong.

The County Auditor is charged with independently determining these components of value — it’s one of the prerogatives of the elective office.  The taxpayer can challenge these valuations before the County Board of Revision, but the challenge cannot be based upon the relative valuation differences of land versus building.  The percentage increases do not need to track one another.

In short, there are three take-aways on Ohio tax abatement valuation questions:

  1. Do not enter into a tax-abated transaction with the assumption that the taxable valuation will never increase over the term of the abatement period.  This is foundationally incorrect.
  2. Land value for all abated transactions can adjust each triennial for both new construction and renovations.
  3. Throughout the abatement period, the amount of the unabated improvement portion of a renovation should track the percentage of valuation of the unabated improvements versus the abated work at the time the work was concluded, and that percentage should remain consistent throughout the abatement period.

If you have tax abatement questions, Finney Law Firm team members Eli Krafte-Jacobs (513.797.2853), J. Andrew Gray (513.943.6658) or Casey Jones (513.943.5673) who are each familiar with tax abatement issues.

Ashley L. Duckworth headshot

Finney Law Firm welcomes new attorney Ashley Duckworth

Author By Christopher P. FinneyPosted on

Finney Law Firm is pleased to announce the addition of Ashley Duckworth as our newest associate attorney.  Ashley joins the firm’s litigation group, primarily handling real estate and commercial law disputes.

Ashley graduated in the spring from Salmon P. Chase College of Law and just recently passed the Ohio Bar Examination.  The firm and many of its clients have gotten to know Ashley through her clerkship for the past 15 months.

Ashley graduated from Western Kentucky University in 2021 with a Bachelor’s Degree in Communication.

Finney Law Firm opens its office in downtown Cincinnati

Author By Christopher P. FinneyPosted on

Exterior photo on the downtown Cincinnati location

Finney Law Firm and Ivy Pointe Title have opened their office in downtown Cincinnati at 635 Main.  For us, this has been a much-anticipated and long-awaited development.  This office replaces our Mt. Adams office on Celestial Street in the historic Rookwood Pottery Building.  We hope you enjoy this new office as much as we have enjoyed crafting it.

Why downtown?  First, this office joins a post-COVID resurgence for downtown, which is seeing a return of office workers, a huge growth in residential development and a host of new hotels and restaurants, bars and other entertainment venues.  Second, many of our major corporate clients are downtown-based and some are downtown-focused.  Third, the office is located strategically just one block north of the Potter Stewart U.S. Courthouse (which houses the Federal District Court for the Southern District of Ohio and the 6th Circuit Court of Appeals) and three blocks immediately south of the Hamilton County Courthouse.  Ample parking surrounds the new facility.

We are jazzed about our ability to revive an historic 150-year-old building into a sparkling new facility, with energy-efficient HVAC and lighting, and cutting-edge smart technology throughout.  In this revival, we have retained many of the original historic features of the building.  We hope you come by for a closing, a deposition, a mediation or a meeting with our attorneys and staff.

The project took the best of our creativity (I know, I know, we are attorneys) and resources, partnering with a host of talented consultants, architects, designers, and contractors.  (I learned so much by doing this project and am glad to share my experiences as well as our list of consultants, contractors and materials that have made it a rousing success).  We combined a smart initial purchase of the property with federal and state historic tax credits and City of Cincinnati residential and commercial tax abatements.  My transactional team handled the tax details and legally divided the building into three condominiums, our office and two residential condos.

Many have asked me: How was City Hall to deal with on this project?  I can say without exception that each City department with which we dealt has been exceptionally prompt and professional: Historic Conservation, the Building Department, the Economic Development Department, and even the Mayor and City Council.

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Thanks to our loyal clients while we completed this master work, to my attorneys and staff who were endlessly patient while I got it finished, and to our whole design and construction team who endured my endless questions, prompts and concerns, while each providing exceptional products and services.  You simply would not believe the hard work, long hours and creativity needed to bring this project to fruition by our design and construction team members.

Audio recordings of client and customer interactions

Author By Christopher P. FinneyPosted on

In today’s digital age, one should almost expect that all personal interactions and appearances in public places are being recorded.  In fact, there are apps for cell phones that automatically record every single phone call.  In some ways, it seems creepy.  In others the question would be: if you are doing nothing wrong, what do you have to fear?  Personally, I see it as creepy and I don’t like it.

However, Ohio is a “one party” state as it relates to recording interactions.  As such, it is legal for one party to a conversation to record that conversation, even if the other party is not aware of the recording.

We have learned through our law practice that clients, opposing counsel and opposing parties frequently are making recordings of interactions, on the phone and in personal meetings.

From my perspective, if I know I am being recorded, I likely would be more cautious and more guarded in what I say.  In some instances, I would limit my interactions with that person entirely, or make sure communications are all in writing.

As a result, we have added a provision to our client fee agreements requiring clients to tell us if they are recording interactions with our office.  If they fail to notify us of those recordings, they cannot later use those recordings against us.

I recently shared the fact that this is part of our standard engagement letter with a class of Realtors, and was asked by 9 participants for that form language to include in their own agency agreements.  So, I thought I would share that language here on this blog as well.  Feel free to make use of it as it suits your practice.

Audio and Video Recordings with this Firm

We will never make an audio or video recording of any communication with you or any third party.  We occasionally have clients who either want to make an audio and/or video recording of a call or meeting with us.  In the event that you choose to make an audio or video recording or any interaction with us, we require that you disclose each such instance to us in advance in writing.  If you fail to disclose any such recording, (a) it will be a material breach of this agreement, (b) it will be the basis for termination of the relationship by this firm and (c) you agree not to use that recording in any proceeding relating to our representation.

It’s a dangerous world out there.  Proceed with caution.

Rebecca L. Simpson

Rebecca Simpson adds mediation services to Finney Law Firm’s offerings

Author By Christopher P. FinneyPosted on

Finney Law Firm announces that attorney Rebecca Simpson is expanding her practice to offer mediation services.  Rebecca has decades of diverse litigation and advocacy experience, and believes that even the most difficult conflicts can be resolved through strategic, amicable, problem-solving negotiations. This can result in faster, less expensive and more satisfactory results for clients.

Rebecca’s experience includes employment (representing both employers and employees), commercial, real estate and public interest litigation, as well as zoning, land use and other administrative and legislative matters at the state and local level.  Click here to see Rebecca’s bio.

As a mediator, Rebecca will leverage her years of experience in these areas to assist you and your client in exploring efficient and effective resolutions to what could otherwise be lengthy, expensive litigation with uncertain results.

If you believe that Rebecca can be of assistance to you and your client, or if you’d just like to learn more about her mediation practice, you can contact her at [email protected] or at 513-703-6227.

 

 

Casey Taylor

Finney Law Firm offers free FinCEN Webinar on Tuesday, May 14 at noon

Author By Christopher P. FinneyPosted on

As reported here and in our prior newsletter, new legislation requires owners of small businesses (including LLCs and corporations; under $5 million in revenue) to report their owners’ names to the federal agency known as FinCEN (Financial Crimes Enforcement Network).  There is a fine of up to $500 per day for violations, so this is a regulation that should not be ignored.

For new LLCs and corporations, the deadline is within 90 days of the formation.  For LLCs and corporations in existence as of January 1st of this year, the deadline is January 1. 2025.

Finney Law Firm attorney Casey Jones has carefully researched and written about the new FinCEN requirements and is heading our efforts to educate our clients on the intricacies of the statute and to assure compliance by our firm and our clients.

  • On Tuesday, May 14, at noon Ms. Jones will conduct a webinar informing clients of the new FinCEN requirements and answering questions you may have.

The link to sign up for the webinar is here.

J. Andrew Gray

Finney Law Firm welcomes new associate J. Andrew Gray

Author By Christopher P. FinneyPosted on

Finney Law Firm is pleased to add to our team of attorneys J. Andrew Gray.  Andrew is a recent graduate of the University of Cincinnati College of Law where he served as chair of the Honor Council, the student-run organization dedicated to academic integrity and enforcing the College of Law’s Honor Code.

Andrew also brings to our firm and the practice of law his background in engineering.  In 2020 he earned his bachelors degree in Industrial & Systems Engineering from The Ohio State University.

Prior to joining the Finney Law Firm, he clerked for a long-serving local Common Pleas judge, helping the court resolve civil matters ranging from personal injury suits to complex construction litigation.

Andrew joins our burgeoning litigation team.

Butler County issues its property tax revaluation report

Author By Christopher P. FinneyPosted on

Nancy Nix, the Butler County, Ohio Auditor, has released her summary of the outcome of the property tax revaluations for 2023 (released with the 2024 tax bills).  The report is linked here.

Some report highlights:

  • She explains that eight of the school districts are “below the 20-mil floor,” meaning that there is no tax relief in those school districts due to the “reduction factor” that otherwise automatically rolls back taxes in Ohio as valuations increase.  Those school districts are: Edgewood, Hamilton, Madison, Middletown, Monroe, New Miami, Ross, and Talawanda.
  • The median increase in valuations in Butler County was a whopping 37%.
  • The resulting net tax increases by district are enumerated (but not the valuation jumps alone) and range from a high of 28.41% in parts of the Talawanda school district and as low as 4.61% in parts of the Lakota School District.

This “tax year” is one for the record books.

 

 

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