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Author Archives: Finney Law Firm

Changes to Property Valuation Law recognize changes in commercial finance

Author By Finney Law FirmPosted on

In the past decade, businesses, particularly restaurant chains have been utilizing real estate sale-leasebacks as a financing tool. The sale-leaseback typically involves an above market purchase price followed by an above market lease; providing current cash to the seller/lessee and an income stream for the buyer/lessor. Federal tax law encourages this system with favorable tax treatment.

However, this system tends to clash with Ohio’s property valuation scheme mandating that an arm’s-length purchase price was the “market value” for property tax purposes. Thus, much of the federal tax benefit of the sale-leaseback was eaten up by the increased property taxes.

Two recent changes to Ohio law recognize the nature of sale-leasebacks; allowing businesses the carrot of the federal tax advantages without the stick associated with Ohio’s prior tax law.

First, the auditor is now required to determine the value of real property “as if unencumbered,” meaning that the value of the leaseback portion of the sale-leaseback is to be disregarded in determining the value of the real estate (i.e., to the extent the price paid is elevated by consideration of the income stream).

Second, purchase price is no longer dispositive of market value, underscoring the necessity of recognizing the hybrid nature of the sale-leaseback and allowing a proper allocation between the financing tool and the real estate purchase.

Finney Law Firm’s property valuation team is versed in these changes, assisting our clients achieve fair values for properties before local Boards of Revision.

 

Disinheriting in Ohio – it’s not as simple as you may think

Author By Finney Law FirmPosted on

A recent First District Court of Appeals decision highlights the importance of a thorough and properly executed will – particularly if you are seeking to disinherit a child or grandchild.

In Chambers v. Davis, C-130645, the decedent’s will specified that her daughter and grandson were to receive nothing from the estate, and bequeathed specified items to a niece.  The execution of the will was witnessed by the niece and one other witness.  There was no residuary clause directing the disposal of any remaining assets.

In general, Ohio Revised Code Section 2107.15 invalidates bequests to a person who is one of only two witnesses to the execution of the will.  Based on this section, the Probate Court declared the bequests to the niece void.  Because there was no residuary clause directing the gift otherwise, the specific property left to the niece was then distributed as if the decedent died without a will.

Under the statute of descent and distribution, the property that had been left to the niece passed to the disinherited daughter contrary to the desire of the decedent.

The court reported that Ohio probate law requires more than a simple statement directing that the disinherited party receive nothing.  To effectuate a disinheritance, you must properly disinherit the applicable party, and bequeath your assets to devisees other than the disinherited party.

To make sure your wishes are carried out, make sure your will contains a residuary clause and is properly witnessed.

How can Chapter 13 Bankruptcy help me keep my home?

Author By Finney Law FirmPosted on

One of the most common questions people ask when considering filing for bankruptcy is whether or not they can keep their house. This makes sense as a house is often the most valuable asset you own and the place you live and raise your family. Many people fall behind on their payments due to an unexpected income reduction due to a job loss or illness. Later, they find a new job and/or their financial situation changes and they need a way to catch up their house payments to stop the bank from foreclosing against their property. Chapter 13 Bankruptcy offers homeowners a way to protect their homes and stop foreclosure lawsuits in their tracks.

When you file Chapter 13 Bankruptcy you receive the protection of the automatic stay. The automatic stops any creditor’s attempts to begin, continue, or complete a foreclosure lawsuit in state court. The automatic stay goes into place immediately after you file and will stop a court ordered sheriff’s sale from proceeding. The automatic stay allows you to breathe easier knowing that your house will not be lost on the courthouse steps.

Chapter 13 offers many benefits that allow you use your income to repay some or all of your debt. You may also have the benefit of paying your unsecured creditors back a reduced amount that is based on your income. Your bankruptcy attorney will propose a Chapter 13 Plan that allows you to pay back your past-due mortgage payments and penalties over the course of 36 to 60 months depending on your income. You are still responsible for making your standard monthly mortgage payment in addition to your new additional Plan payment, but your back payments are spread out over the course of the Plan to make them affordable.

Chapter 13 can be beneficial for you if you have a 2nd mortgage that is not secured against your property because your house is worth less than the balance of your first mortgage. An example is if your 1st mortgage is $100,000 and you have a 2nd mortgage or home equity line of credit for $20,000, and your house is only worth $85,000, you may be able to ‘strip’ off the 2nd mortgage and only pay back a percentage of the amount owed on the 2nd mortgage. At the end of your Chapter 13 your 2nd mortgage is eliminated and you will only owe the balance on your 1st mortgage. Please consult your bankruptcy attorney to see if you would qualify.

If you successfully complete your Chapter 13 by making all of your plan payments, you debt will be discharged and your mortgage payments will be deemed current. From this time on you can continue to make your normal monthly payments until your mortgage is paid off. You will also have your other eligible debts discharged as well. Chapter 13 is a great vehicle for eligible homeowners to use to save their homes and reduce their debt. Contact Finney Law Firm today for a free consultation to see if Chapter 13 bankruptcy is the right option for you.

Will Ohio’s Supreme Court reliberalize Ohio’s Open Meetings Act?

Author By Finney Law FirmPosted on

Once considered a model for open and accountable government, Ohio’s Open Meetings Act (R.C. § 121.22, et seq.) was intended to be “liberally construed to require public officials to take official action and to conduct all deliberations upon official business only in open meetings unless the subject matter is specifically excepted by law.”

What appears to be pretty straightforward language, telling the courts to read the statute in favor of open government, the courts have slowly whittled away at what had been a model law.

But there is hope. Adam Stewart v. Board of Education of Lockland School District challenges a school board’s decision to hold an employee disciplinary hearing in executive session (non-public), even though the employee himself demanded a public hearing. The trial court and court of appeals relied on a 1980 Ohio Supreme Court case that interpreted the law to allow the School Board to hold a non-public hearing despite the employee’s demand.  So where is the hope? The Ohio Supreme Court has agreed to hear the appeal of the decision in the Stewart case. Stewart will have the opportunity to ask the Court to revisit its 1980 decision and re-liberalize Ohio’s Open Meeting Act.

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