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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.

Eminent Domain and Transportation/Utility Easements

Author By Casey A. JonesPosted on

Scenario:

You own a home or commercial property, and you receive a letter from the Department of Transportation, Duke Energy, or another utility provider seeking a temporary or permanent easement over your property for purposes of constructing a utility pole, water lines, traffic signals, etc.

Do you have to agree? What are your options?

The reality is that if a governmental or public utility company wants an easement over your property, they will – in almost every circumstance – get it, through litigation if all else fails. However, that does not mean that you have to agree to everything they are asking of or offering to you.

The easement sought may be a “taking” (on a temporary or permanent basis) of the right to use your property as you wish, the right to access certain areas of your property, or of parking spots for your customers. It could mean lengthy construction that may deter customers or make it difficult to see or access your business. Each of these situations have a value, tangible or otherwise, to you as the property owner.

Given the likelihood of the requesting entity eventually obtaining the easement (i.e., the right to use the property) that it seeks, via eminent domain proceedings or otherwise, attempting to fight the “taking” through litigation may or may not be the best option or strategy for you. If you have received one of these letters or “offers,” we would be happy to discuss your options and whether there are certain terms that we should focus on for purposes of negotiation. We have had great success with negotiating compensation (netting the client substantially more, even accounting for any legal fees) and/or addressing concerns over potential damage to the property, ensuring that the client is afforded adequate protections so that they will be made whole in such event, among other concerns.

Temporary or permanent easements can have a lasting impact on you, your property, and your business, and it is important to make sure you are covering your bases in negotiating reasonable and favorable terms, ensuring as much protection as possible, and yes – receiving adequate compensation. We understand this, as do the companies seeking the easement. They are generally receptive to negotiating the terms so that the parties can have an amicable agreement in place to allow the necessary improvements, while minimizing any adverse effects to the owners’ ability to use and prosper from their property. However, it helps to have an experienced attorney on your side to help advise you and present your negotiated terms in a manner most likely to be effective.

For assistance in assessing your options or negotiating easements, please contact Casey A. Jones, Esq. at [email protected] or (513) 943-5673.

Residential Foreclosures: The Procedural, Pre-suit Pitfalls

Author By Diana L. EmersonPosted on

Pursuing a residential foreclosure is not for the faint of heart. The foreclosure process is fraught with procedural pitfalls – many of which arise even before initiating the formal legal process in court.

This is especially true in the case of a residential mortgage foreclosure, where a borrower (“debtor”) has defaulted upon his or her mortgage payments and the mortgagee (“creditor”) is attempting to collect the entirety of the loan through a judicial sale of the debtor’s residential property.

The creditor must not file immediately upon the debtor’s defaulted payment. Instead, the creditor should understand what pre-suit obligations he or she may have by reviewing (1) the contractual requirements under the note and mortgage, (2) the statutory requirements under R.C. §1349.78, and (3) any regulatory requirements that may be applicable to the loan.

Failing to abide by any of these pre-suit requirements may be fatal to a foreclosure action.

Before initiating a formal foreclosure action, it is paramount that a creditor reviews the note and mortgage for any contractual pre-suit requirements. Although it is not common, some notes and mortgages require written notice of actual acceleration of amounts due in the event of default. Regardless of whether this provision is or is not included, reviewing the note and mortgage should be the first step any creditor takes towards pursuing a residential foreclosure.

After reviewing any contractual pre-suit requirements, a creditor must then review his or her statutory pre-suit requirements. Under §1349.78, a creditor is required to send a cure letter to the debtor if: (1) the debt is secured through a mortgage lien on the debtor’s residential real property, (2) the debt is not in the first mortgage position, and (3) the debt has been accelerated or is in default according to the terms of the promissory note. This letter must be sent at least thirty days before the initiation of a foreclosure action, and must include specific language outlined in R.C. §1349.78.

Depending upon the type of loan, there may also be regulatory pre-suit requirements.  These requirements are often applicable when the loan is backed by the federal government.

Once a creditor has completed these pre-suit requirements, they can then begin preparing the complaint and pursuing formal legal action against the debtor.

As demonstrated, foreclosure actions are procedurally complex – even before filing the formal suit against the debtor. Failure to abide by any of the above-mentioned requirements could result in the ultimate dismissal of the subsequent foreclosure action.

Rethinking Service of Process: Key Takeaways from Ohio Supreme Court’s Latest Decision on Proper Service

Author By Ashley L. DuckworthPosted on

In August 2024, the Ohio Supreme Court issued an opinion in Ackman et al. v. Mercy Health West Hospital, LLC, et al. reaffirming the principle that a party’s active participation in litigation does not waive the affirmative defense of insufficient service of process, provided the defense is properly raised. This decision, which builds upon and reinforces the earlier case of Gliozzo v. Univ. Urologists of Cleveland, Inc., could have significant implications on litigation strategy and assertion of affirmative defenses

The Case Background

Ackman arose out of a medical malpractice and wrongful death lawsuit filed against a doctor, his employer, a hospital, and Medicare. The doctor and employer responded with an answer asserting the affirmative defenses of insufficiency of process and insufficiency of service of process. Over two years later, they sought summary judgment, arguing that the case was not timely initiated because the doctor had not been served with the complaint. The plaintiff opposed, asserting that the doctor had waived the defense by actively participating in the litigation.

The Ohio Supreme Court, referencing its opinions in Gliozzo v. Univ. Urologists of Cleveland, Inc. and First Bank of Marietta v. Cline, clarified that a party does not waive the defense of insufficient service of process simply by participating in the litigation, as long as the defense is preserved in the pleadings.

The Court emphasized that it is the plaintiff’s responsibility to ensure proper service, and failure to do so according to the Civil Rules, especially in relation to statutes of limitations, can result in the case being dismissed, regardless of the defendant’s engagement in the litigation.

Potential Implications for Litigation Strategy

  1. Strategic Use of Service of Process Defenses and Litigation Tactics: Defendants can now assert with greater confidence a defense based on insufficient service, even after prolonged litigation. The ruling unequivocally establishes that active participation in the case does not automatically waive this defense, provided it is properly raised within the appropriate timeline. As part of their broader litigation strategy, defendants may strategically delay raising this defense knowing that failure to properly serve a complaint can later serve as a dispositive ground for dismissal.
  2. Increased Importance of Service of Process: This ruling underscores the critical importance of properly effectuating service and adhering to procedural rules and deadlines. Litigators must ensure that all potential affirmative defenses, notably insufficiency of service of process, are raised in the initial responsive pleadings. Plaintiffs must also be diligent in completing service within the prescribed timeframe to avoid dismissal on such grounds.
  3. Risk of Dismissal for Plaintiffs. For plaintiffs, this ruling serves as a reminder that the window for correcting service issues is narrow and high stakes, as failure to perfect service could result in the loss of an entire case. In this case, Ackman, service was not effectuated within the required time frame, and refiling would have been outside the statute of limitations, leading to the dismissal of the claim on summary judgment grounds with no opportunity to refile or correct the service. Litigators must be vigilant in ensuring proper service at the outset, particularly in complex or multi-party actions, to avoid the risk of dismissal and the permanent loss of the claim.

The Ackman’s Decision in the Evolving Landscape of Service of Process Law

This Ohio Supreme Court decision in Ackman significantly contributes to the ongoing discourse surrounding the service of process in Ohio. This ruling builds upon and extends prior case law, particularly in light of procedural challenges posed by the COVID-19 pandemic. A 2021 case, CUC Properties v. SmartLink Ventures, Inc., raised concerns regarding the validity of service when USPS return receipts included notations such as “Covid 19” or “C19.” In that case, the First District Court of Appeals determined that such notations failed to meet the requirements of Civ. R. 4.1 for valid service of process, stressing the need to adhere to procedural rules even amidst pandemic-related disruptions.

The CUC Properties decision highlights that while innovative solutions were necessary during the pandemic, courts cannot compromise due process protections. The recent Ackman ruling reinforces this principle, highlighting the consequences for failing to effectuate proper service, even when a party has otherwise participated in the litigation.  As the Ohio Supreme Court emphasized, certainty in litigation is paramount, and defendants are under no obligation to assist plaintiffs in fulfilling their duty to perfect service. This decision marks a critical point for litigators, urging them to ensure procedural rigor to avoid jeopardizing their cases due to service-related missteps.

For further discussion on the impact of COVID-19 on service of process, see a related article here: Hamilton County Court of Appeals rules that certified mail practice during pandemic is not effective service of process – Finney Law Firm.

Additionally, the full court opinion can be found here: Ackman v. Mercy Health West Hosp., L.L.C..

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.

FLF wins million-dollar racial discrimination verdict for job applicant

Author By Stephen E. ImmPosted on

On August 30, a federal jury in Indianapolis returned a verdict totaling $1,090,000 for an unsuccessful job applicant represented by Steve Imm and Diana Emerson of the Finney Law Firm. The applicant, Cory Lange, had sued the Anchor Glass Container Corporation for denying him employment in 2018. The case went all the way up to the 7th Circuit Court of Appeals in Chicago before being remanded to the District Court for trial last month.

Mr. Lange alleged that he was turned down for employment by Anchor because of his race, in violation of Title VII of the Civil Rights Act of 1964. The company originally claimed that it rejected Mr. Lange because of a felony conviction he had in 2009, but the evidence showed that the company had hired several other people who had significant criminal records, but who were of a different race than Mr. Lange. Also of key importance was the fact that, over time, the company had significantly changed its justification for not hiring Mr. Lange. This evidence permitted the jury to reasonably infer that the true reason for Mr. Lange’s rejection was his race.

Upon finding that Mr. Lange had proved his case for discrimination, the jury proceeded to award him $90,000 for mental suffering and $1,000,000 in punitive damages. The punitive award reflected the jury’s finding that the company had acted in reckless disregard of Mr. Lange’s rights.

The court will hold further proceedings to determine if Mr. Lange should receive additional damages for lost back pay and lost front pay, as well as attorney’s fees.

The case serves as an important reminder that the employment discrimination laws apply at ALL phases of the employment relationship, not just when someone is discharged.

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.

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