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Christopher Finney teaching two continuing education courses this week to Realtors

Author By Christopher P. FinneyPosted on

This week, Christopher Finney will be teaching two courses to Cincinnati-area Realtors:

1)  On Wednesday, Mr. Finney will teach “Core Law” to the Cincinnati Area Board of Realtors from 9 to noon.  The course will cover, among other things, the new form contract of the Cincinnati Board of Realtors, new residential loan and closing forms required starting this summer, laws allowing for electronic signatures and new rules for registering clandestine drug labs.

2) On Thursday, Mr. Finney will teach a course on Ohio Condominium Law for the Comey & Shepherd, Realtors from 1 to 4 PM.

If your company or group wants a presentation on a matter of Ohio real estate law, Mr. Finney is glad to cooperate.

 

New Cincinnati Area Board of Realtors contract contains substantial changes

Author By Christopher P. FinneyPosted on

The Cincinnati Area Board of Realtors implemented a new residential contract form for use starting January 1, 2015.  The changes are substantial, compared to Board contracts in effect prior to now:

  • The contract gives an option for a “short proration” of real estate taxes.  Instead of prorating for the entire period of unpaid taxes, the proration is only for the current period (a difference of about six months).  This is largely a new concept to the Cincinnati marketplace;
  • The contract calls for payment from the seller to the buyer of the CAUV recoupment amount.  This change alone could result in a substantial credit on closings of agricultural property;
  • Shifting of expenses from buyer to seller, including an option for the seller to pay $300 of an owners’ policy of title insurance; and
  • The obligation for the seller to provide extensive information on covenants and assessments.

So, it’s “buyer beware” and “seller beware” with respect to the new contract form.

Christopher Finney to deliver two February courses on property tax reduction

Author By Christopher P. FinneyPosted on

Next week, Christopher Finney will present “Reducing your property taxes” in two forums:

1) The consistently ground-breaking Empower-U lecture series will host Christopher Finney at Connections Christian Church, 7421 East Galbraith Road, on Tuesday, February 24, from 7 to 8:30 PM.  You can register and read about all of their course offerings for the Spring here.

2) Cincinnati Realtor Ellie Kowalchik and Summit Funding’s Aaron Denton team up for an informative evening on Thursday, February 26, from 6:30 to 8 PM at the Oasis Conference Center, Loveland, Ohio.  You may RSVP by emailing Ellie at [email protected] by February 18th.

All are invited to each of these courses.  We look forward to seeing you there!

Massachusetts False Claims statute challenged

Author By Christopher P. FinneyPosted on

On the heels of Judge Black’s historic decision striking down Ohio’s false claims statute as a violation of the First Amendment, a Plaintiff in Massachusetts is challenging the constitutionality of a similar statute in that state.

There, the statute calls for direct criminal prosecution of those who are claimed to have made a false statement during the course of a political campaign.  In contrast, in Ohio, there first must be a proceeding and finding of violation before the Ohio Elections Commission.  Indeed, the Plaintiff in the Massachusetts action has been charged criminally for a claimed false statement made about a candidate during the course of an election campaign.

The Boston Globe reports that noted Constitutional scholar Lawrence Tribe of Harvard says of the law: “It’s dramatically unconstitutional in its sweep….This is an easy one.”

Read the entire story here.

 

Be careful of recoupment of reduced taxation of current agricultural use valuation

Author By Christopher P. FinneyPosted on

The Ohio legislature has provided for significantly reduced property tax valuation (and thus, reduced property taxes) for property used for qualifying agricultural purposes.  This is referred to in the Ohio Revised Code as “Current Agricultural Use Valuation” and is shorted as “CAUV.”  This reduction is embodied at O.R.C Section 5713.31.

However, when the owner of property subject to such reduced valuation changes its use from a qualified agricultural use, Ohio Revised Code Sections 5713.34 and .35 provide that the savings for the past three years are to be recouped.  This can be a whopping one-time tax bill!

Further,  the recoupment is a lien against the real estate retroactive to the first of the year in which the change of use occurs.  Thus, when a change of use occurs in conjunction with a transfer of real estate, the buyer and seller need to carefully allocate between themselves the amount of such CAUV recoupment.

Because the seller received the benefit of the reduction; but it is the buyer’s change of use that is causing the CAUV recoupment to become due, it is not always understood between the parties who should bear this expense.

A buyer will be “stuck” with this CAUV recoupment charge as a lien against his property.  It is prudent for parties, Realtors and attorneys to assure the issue is addressed between the parties in the contract and at the closing, to avoid an unpleasant and expensive post-closing surprise.

The Listing Agreement: All Realtor agency agreements must have definitive expiration dates

Author By Christopher P. FinneyPosted on

It is a violation of Ohio license law, and likely will void Ohio Realtor agency agreements, to fail to include in such instruments a firm expiration date.  There is no limitation as to how long the term of such agreements must be, but simply that they must expire on a date certain.

O.R.C. Section 4535.18(A)(28) provides that it is a violation of Ohio license law for:

Having failed to put definite expiration dates in all written agency agreements to which the broker is a party.

For purposes of this section, an “agency agreement” should be considered any listing agreement (whether for sale or lease and whether exclusive agency agreement or exclusive right to sell/lease), any property management agreement, and any contract for buyer representation.

Our attorneys once handled a case for a client under which he had entered into a settlement agreement with a client upon the early termination by the owner of a listing agreement. As a compromise, the Realtor agreed with the owner that whenever the owner decided to again place the house not he market, it would be with the subject Realtor.  The problem was that the Realtor did not list a definite expiration of the right to list, and thus, arguably, the agreement violated the referenced code section.

So, on standard listing agreements and non-customary agreements to list property for sale or lease, all must have definite expiration dates in them.

 

Maple Heights, OH Mayor sued for releasing income tax data of Council member

Author By Christopher P. FinneyPosted on

In one of the more outrageous political acts we have witnessed, in last fall’s election on a Charter Amendment banning Red Light Cameras, officials of the City of Maple Heights (a suburb of Cleveland) obtained and released confidential income tax information of initiative proponent Bill Brownlee, a member of the  City Council.

The information was in a flyer ostensibly designed and distributed to dissuade voters from voting for the ballot initiative, but appeared more aimed at smearing several of the Mayor’s political opponents.

Ohio Revised Code Section 718.13(A) expressly makes all information in municipal tax returns confidential.  This protection is then repeated in the Maple Heights Municipal Code. 

The Mayor, the Law Director, and the Council President also have worked in other ways to target their political opponent and suppress his speech.

Our firm filed suit for Bill Brownlee two weeks ago to recover damages arising from the referenced conduct and discourage its repetition.  A link to the suit is here.

Public auction price can be true value (Cuyahoga Court of Appeals Ruling upholds 98.5% property value reduction)

Author By Finney Law FirmPosted on

In NDHMD, Inc. v. Cuyahoga County Board of Revision, et al., 2015-Ohio-174, the Eighth District Court of Appeals reviewed the finding by the Cuyahoga County Common Pleas Court that the surplus land auction conducted by the Cuyahoga County Auditor constituted an arm’s length transaction.

In 2009, the County Treasurer foreclosed on a property for delinquent taxes. Two attempts at auction failed, resulting in the property being turned over to the state. In March, 2010, the County Auditor placed the property for sale as part of a surplus land auction. The auction was conducted on March 24. One week later (but prior to the filing of the executed deed) the winning bidder (at $1,500) filed a challenge to the property valuation with the Board of Revision.

At the Board of Revision, the value was reduced from $963,300 to $444,720. The owner appealed that decision to the Cuyahoga County Court of Common Pleas, which upheld the BOR decision. The owner then appealed to the Court of Appeals, which ruled that because the challenge to the BOR was filed prior to the recording of the deed, the owner did not have standing to bring the challenge and dismissed the complaint (returning the value back to $963,300).

During the same triennial, the owner filed a new challenge for tax year 2011. Having satisfied the jurisdictional requirement of recorded ownership, the owner now faced the statutory prohibition against bringing two challenges in the same triennial absent an exception (one of which is an intervening arm’s length sale).

The Auditor argued that the surplus auction sale is not an arm’s length transaction.

Relying on the Ohio Supreme Court ruling in Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, Slip Opinion No.2014–Ohio–4723, the Cuyahoga Court of Appeals found that, while an auction sales price is presumably not a voluntary, arm’s length transaction, this presumption can be rebutted.

Supporting the finding that the transaction was arm’s length was the fact that the county auditor had not been compelled to auction the property; that two prior auctions had failed, resulting in the property being transferred to the state; that the auction had been advertised; and that there were multiple bidders.

The finding that the auction constituted an arm’s length transaction was crucial for two reasons in this case. First, because NDHMD had filed a prior challenge to the value of the property (that had been dismissed on jurisdictional grounds), the sale provided an opportunity to bring the challenge at all. Second, as an arm’s length transaction, under the applicable law (since amended) the County Auditor was required to use the sale price as the true value of the property.

The final result is that a property that the County Auditor had valued at $963,300.00 was given a new value of $1,500.00, at least for the remainder of that triennial (in the most recent triennial, 2012, the value was adjusted to $170,100).

Notwithstanding the results in this case, the Court was clear that the general presumption remains that an auction price is not the true value for tax purposes.

Have a question about the County Auditor and Board of Revision Valuation Process? Contact Anna Ausman at (513) 943-6651.

 

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