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Category Archives: Commercial Real Estate

Ohio commercial transactions: Improving your position as a “lender”

Author By Christopher P. FinneyPosted on

Frequently, clients desire to lend money, seller-finance the sale of their business or other asset, buy and then lease out a building, or engage in some other business transaction because they are motivated by favorable business terms the transaction provides on its surface: A high rate of interest, a good return under a lease, or a more promising sale price than otherwise the seller would obtain, for example.

This entry asks a prospective private lender to think twice about the risks associated with this activity and to take as many steps to protect himself as possible under the circumstances.

Who is the “lender” and who is the “borrower”

For purposes of this entry, there are many circumstances in which a party is a “lender” and another is the “borrower.”

  • Obviously, a simple monetary loan in which there is a lender and borrower is one such transaction.
  • Another occurs where an investor either owns a building and desires to rent it, or purchases one for leasing purposes.  In addition, as a part of a leasehold transaction, the landlord may be putting into the premises significant sums in “tenant buildout costs.”   Here, the renter is “using” the landlord’s money, his credit, and his asset, in exchange for monthly (read: deferred) payments.  This is a form of “loan.”
  • When a seller is selling his busines, his building or another asset, and does anything other than take back 100% of the purchase price at the time of conveyance, he is a “lender.”  (And the worse situation is where the seller is taking a subordinate position to a lender who gets a first mortgage or other lien on the assets acquired.  In such situation, the liklihood of the seller getting his “loaned” funds is significantly impaired, and the chance of default significantly higher.)
  • Even co-signing a loan or a lease, or guaranteeing the debt of another, is “lending” your credit to the co-borrower.
Four important factors to consider

But consider these factors before “lending” your money, your asset, and your credit to a third party:

First, ask yourself: “Why can’t this buyer get conventional financing?”  Banks are in the business of assessing and taking the risks associated with lending.  If this “borrower” does not qualify for a bank loan, why should you be in the business of being a lender?  Have you really fully assessed the risks of lending to this “borrower.”

Banks know experientially and actuarially the “warning signs” that predict loan defaults.  Among these are an inability to come up with an adequate down payment, a poor credit score, a history of litigation, and other warning signs.  I spoke with one lender recently, and they said they will never lend to people who fail to pay their taxes — ever.

Second, in my experience, a buyer of an asset is much more likely to raise defenses and counterclaims against a seller than the buyer would be able to as against a third party lender: Fraud in the inducement of the sale, property defects, misrepresentations in the business accounts, and simple contract breach.  Buyers will raise any and every excuse and defense against paying money they owe.

Third, the more desperate the “borrower” is, the more likely he is to agree to generous transaction terms: a high rate of interest, a high sale price, or some other above-market remuneration.  And — I say this based on experience — borrowers who have no intention and no ability to pay back the “loan” are the most willing to agree to generous lending terms.

Fourth, if you are going to leap (into the position of being a lender), at the very least look first: do the kind of due diligence that a lender would — a credit check, a background check, reference checks, and a simple check of court clerks sites and bankrupcy court history for obvious signs of fiscal distress.

The ABCs of improving your position as a lender

So, you have made the decision to “lend.”  What steps can you take to improve your position and increase the liklihood of getting your money paid back, with interest?

A. Certainly ask for a personal guarantee of any “loan” to a corporate entity.  Accepting simply a corporate signature, whether of a note maker, a tenant or the buyer of an asset, is asking for trouble, unless that company’s creditworthiness has been thoroughly ascertained

B.  Don’t be shy about asking for the personal guarantee of the principal’s (or principals’) wife (or wives).  If the borrower is earnest about putting their name, their assets and their creditworthiness behind a promise, and they have asked you to extend credit to them — then shouldn’t their wife also stand behind the obligation?  Stating it differently, the most common and most obvious dodge of debtors avoiding their creditors is to place their assets in the name of their wife.  Don’t let them avoid their obligations to you so easily.

C. Are there third parties who can guarantee the debt?  A business partner?  A parent?  Who is interested in the success of this borrower’s business such that they would be willing to stand behind its obligations?

D.  Look for assets to lien.  Does the “borrower” (or his wife) own a house, stocks, jewelry, accounts receiveable, or equipment or inventory in their business?  Are those assets presently free from any  first lien against them?  If so, and if the borrower is earnest about paying back your debt, then he should not have qualms with providing a security interest against those assets to stand behind the loan.  (Note: Please consult an attorney about how to properly take a lien in various assets; it can be tricky.)

E. Would some patience or a reduced price yield either a cash buyer or enable the buyer you have to go and get a bank or other third party loan?  If so, it may be wise to take one of those options.

Conclusion

Lending is an ultra-hazardous activity that should not be undertaken lightly.

There are exceptions where the seller’s main motivation is not necessarily getting payback of the loan: a parent helping a child; a business or building owner who is getting a great sale price for the asset, and perhaps much of it in cash; or simply a weak market with few buyers. And so long as our clients enter into a transaction understanding the risks of being a “lender,” we are fine with that decision.

But we see many clients seduced by more favorable terms from a borrower or seller-financed buyer who desperately needs their cash versus a stingier cash buyer.

Our suggestion: Think about taking the money and running instead.

The risks inherent in being a lender is why they say: “Cash is king.”

Real property tax valuation: Ohio Supreme Court ruling gives force to legislative changes

Author By Finney Law FirmPosted on
Ohio Supreme Court Justice Pat Fischer

In a case that was previously discussed here,  the Ohio Supreme Court issued an important ruling in a real estate valuation case, Terraza 8, LLC v. Franklin County Board of Revision, 2015-2063, yesterday.

R.C. 5713.03 was amended in 2012 – allowing that the auditor may consider a recent sale price as the true value of real estate rather than shall, and requiring that the property be valued “as if unencumbered.”

Writing for a unanimous Court, Justice Fischer agreed with the property owner that recent changes to R.C. 5713.03 mean that County Auditors are no longer required to adopt a recent sale price as the true value of real estate, and that the purchase price in sale and lease back transactions can be rebutted by a showing that the sale price does not reflect the value of unencumbered fee-simple estate. The decision is available online here.

Commercial dispute resolution: In litigation, a picture is indeed worth a thousand words

Author By Christopher P. FinneyPosted on

With the advent of the camera phone, the ubiquitous device in everyone’s pocket, there is no longer an excuse for failing to document “things” for posterity.  And such forethought from our clients can prove decisive in a legal battle.

Examples where photos are helpful

The best example of the value of real-time photos is in construction disputes.  We find it is regular practice of owners, architects, engineers, contractors, and materialmen to take photos at each stage of the work completed, which helps to establish the quality of the work, the conformity of the work to the plans, and the stage of completion at a particular point in time, and perhaps document the development of defects in material or workmanship as they are installed.   (This then, of course, helps to pinpoint the blame.)  The forensic or retrospective value of photos at each stage of construction can be invaluable.

Another example of the value of photos is in commercial and residential landlord/tenant in disputes.  In those disputes, the condition of the property as delivered to tenant or as surrendered to landlord is frequently contested.  My sharper clients have taken the time to document the condition of the property both at the beginning and end of the relationship with their camera phone. Those photos can make a liar of a defendant (or plaintiff) and permit a party to establish his minimum elements of a case he is presenting.

The existence of photos also could be used in an automobile accident situation, a dispute over the quality of goods delivered or to prove a person was in a particular place at a point in time.

Another example for me personally is that I just hate to get parking tickets, yet many times those darned parking meter are malfunctioning.  When this happens, I take a business card, note on it “out of order” and slip it into the “credit card slot” on the meter while my car is parked there.  Before slipping the card into the slot, I take a picture of the meter (they all have identifying numbers on them now) and the “out of order” card.

Admissibility and use of photos

Photos are, of course, generally going to be admissible as evidence in a trial or in alternate dispute resolution. So often at trial, I hate to say, one party or the other is outright lying to the judge.  A photo can clear up the inconsistency in statements pretty effectively.  The judge or jury should be thrilled to have such (nearly) incontrovertible evidence versus deciding which party is lying.

Number of photos

The memory capacity for photos on your telephone is almost unlimited, and it takes mere seconds to snap several pictures.  Think about thoroughly preserving the record for posterity (or trial).  Make the time to take several (indeed dozens) of shots — narrow and wide angle, and from every perspective —  to preserve the moment for later reference.

Conclusion

Get with the times.  Use this incredibly effective tool to enhance your position in dispute resolution.  Or, saying it differently, I get frustrated when a client could have made their case stronger simply by whipping out that phone and documenting and saving information for a later date.  This is especially true when the client knows the matter is heading into litigation.

Ohio real estate law: Do the County Auditor’s records “mean anything”?

Author By Christopher P. FinneyPosted on

Our Ohio clients frequently come to us having performed their own amateur sleuthing on questions about title to real property before an initial meeting.  And the easiest place for them to have started their work is the County Auditor’s web site.

Based upon the Auditor’s information, they many times have drawn preliminary conclusions regarding who owns the property, the configuration of the property, and in some cases access road information.  And they have formed preliminary opinions about the topic they want to discuss.

Thus, the client has come to see me asking to confirm what they have learned, and to seek more information about their property, and to then act upon that information, enforcing their rights through legal action.

The question addressed in this blog entry is:

How reliable — from the perspective of establishing legal title to real property — is that information on County Auditor’s web sites?

Information available on line about real property in Ohio

There are a host of on-line resources about real property in Ohio, including building permit issuance and code violations, recorded deed and mortgage information, City, Village and Township ordinances and resolutions establishing assessments and condemnation proceedings, aerial photographs, and maps showing improvements and public utility information.  In Hamilton County,  for example,

  • Here is the Recorder’s site;
  • Here is the CAGIS (Cincinnati Area Geographic Information System) site; and
  • Here is the site with building permit and violation information.
Information available on Ohio County Auditor’s web sites

County Auditor web pages are different in each County, but as a general proposition, I find the Auditor’s web site to be among the most easily accessible and broadly informative sites on real property in Ohio.  In my experience, every Ohio County has a pretty good Auditor’s website.

For example, here is the Hamilton County  Auditor’s site.  Each site is chock full of useful information on every tax parcel in the County:  A property search function that reveals property tax valuation, information on the current and past property taxes [amount and payment history], the sale price and date, the acreage, a drawing and picture of the house and sometimes other improvements, an aerial map and a tax map.

[Note: Our office provides a valuable service to clients in helping them to reduce their real estate taxes.  The essence of this service is to shallenge the County Auditor’s valuation as being too high, which frequently they are, however, in many cases — perhaps an equal or greater number of cases — the valuations are too low.  The point here is that even the County Auditor’s valuation is but “one man’s opinion,” and it too can be a point of reference, but is not the last word on valuation quesitons.]

Can I rely upon that County Auditor’s information in forming opinions about title?

And their question, a question I received today from a client, is

“can I rely on the information on the Auditor’s web site in drawing conclusions about real estate title.”

The short answer is: “No.”

As to real property in Ohio, the County Auditor has a big job, but a relatively simple job: (a) to divide up the County into separate parcels on his records for taxation purposes and (b) to establish a valuation of each parcel for tax purposes.  That’s it.

What this means is that sometimes:

  • the parcel maps are not fully informative as to the parcel identities;
  • the tax bill’s parcel descriptions are many times similarly short-hand;
  • the County Auditor’s site does not necessarily show comlicated ownership and contractual relationships that may be of record such as the fact that a property is subject to a Land Installment Contract; and
  • the owner information is either not quickly updated, incomplete (the Auditor’s site does not and does not purpose to type in all the owners’ names or the complete name as recited on the deed) or inaccurate.

A year ago, I had an instance in which a client who had purchased real property was distressed that for nearly two months the site was not updated showing him as the owner of real estate.  In that instance, the Auditor had stopped updating his site for a period of time for some year-end reconciliation.

But importantly, the Auditor does not claim to be the official or last word on “who owns property.”  That simply is not the function of the Auditor’s web site or the Auditor’s office.

How, then, is legal title established?

Well, in truth, title to real property is not “a piece of paper,” but is a legal construct that is established by records from a number of offices — the County Recorder, the County Engineer, the Clerk of Courts, County Probate Court records, and Federal Bankruptcy Court records.  Ohio has detailed standards for how legal title is to be established: The Ohio Title Standards prepared by the Real Property Law Section of the Ohio State Bar Association.

But the main repository of the official records of “who owns property” is the office of the County Recorder.  And, unfortunately, at least at present, at least for a layman (it may depend on the County), it simply is not as informative and user-friendly as the County Auditor’s site.

To establish title to real property, which really requires a review of all of the records noted above, our firm uses the services of a professional title examiner.  That examiner will, using indexing systems established in each County, find the current deed to the property,  establish what other claims appear in the various records (monetary liens, easements, covenants, etc.), and based upon all of that information we should be able to establish the claim at issue.

Sometimes we determine that title or the issue in question  can’t be made clear from the real estate records and either further documentation is required (by others affirmatively relinquishing their interests) or a court proceeding is necessary to “clear title.”

Conclusion

So, this blog entry has taken our fine readers through a shortened version of the legal maze that exists in Ohio (and most other states) to establish ownership of land, as well as easement and covenant rights of owners and their neighbors.

But the important point made here is that (a) the Auditor’s records are a great shorthand way to quickly find out information about property, including less-than-fully-reliable information about current ownership.  But (b) the Auditor’s records are not — and are not intended to be — reliable information on which legal conclusions should be drawn and acted upon, especially ones that are of any importance.

Please call our real estate professionals, Isaac T. Heintz, Eli Kraft-Jacobs, Chris Finney and Rick Turner with your questions about real estate title.

Commercial leases: Here’s a valuable tenant tip: Ask for an early termination option

Author By Christopher P. FinneyPosted on

In commercial tenant space, whether office, warehouse, manufacturing or retail, landlords typically want three-, five- or seven-year lease terms.  And this is reasonable given the cost of tenant build-out, Realtor commissions and the demands of their mortgage lenders.  It also is relatively standard in the marketplace.

However, a tenant will rightfully reason that they can’t anticipate their space needs for a year much less over a seven-year period of time.  The company might need to relocate, be bought out or go out of business,  the principal could die or become disabled, or the tenant’s business model could change substantially.

One concession I recommend that tenants request in a commercial lease is an early-termination option.  By having the right to walk away from a lease, it gives enormous flexibility and power to a tenant.  Recently, a landlord explained to me that he is glad to offer this tenant concession.

Typically, a termination option is not free.  Here are typical issues a landlord will want to discuss:

  • The lease termination option might not kick in until some period into the lease, say after the first year.
  • The landlord will want generous advance notice provisions, say three to six months to allow him to advertise and market the premises for re-letting to a new tenant.
  • An early termination fee of anywhere from three months to one year of base rent and CAM charges.
  • A reimbursement of Realtor fees paid (many times paid up front, but calculated on the entire lease term value).
  • A reimbursement of tenant improvement costs.

So often I am consulted after the fact by a tenant who wants “out” of their lease on a document we were not asked to help negotiate, and the tenant is in a real spot.  Sometimes in that circumstance the landlord is digging in his heels wanting the full rent and CAM amounts for the entire lease period — and they may well be entitled to that.

But if only the tenant had asked for this simple concession on the front end — when he had negotiating power — his life would be simpler and his finances richer.

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If you want to speak with our commercial leasing attorneys, ask for Issac T. Heintz, Eli N. Krafte-Jacobs or Christopher P. Finney.

Ohio real estate law: A slip between closing and recording? It does happen.

Author By Christopher P. FinneyPosted on

As attorneys, especially in a smaller city like Cincinnati, we can be tempted to trust one another, especially experienced real estate practitioners as to the timing of recording of instruments.  But that trust can be misplaced, as many times between the “closing” and “recording” things go awry.

Roundtable closings

In Ohio, particularly southwest Ohio and for residential properties, round-table closings are common.  For clients from other parts of the country, this can seem like a quaint (and legally dangerous) custom.

The buyer, seller, lender, and Realtors all gather in a room with a title agent to sign and exchange documents and funds.  This ceremony is a “closing” and there occurs the formal payment of the purchase price, funding of the loan and the delivery of the deed.

Escrowed closings

This can differ from closings more common in other parts of the country where the seller places in escrow the deed, the buyer places in escrow the note and mortgage and the lender and buyer pay the sums to the escrow agent.  (Escrowed closings are not unheard of in the Cincinnati marketplace, especially for commercial transaction or corporate executives whose schedule will not allow them to attend a closing in person.)

In this setting, the title agent holds both the escrowed funds from the buyer and the lender, and the deed and mortgage for recording.  Then, he records the instruments and checks the title to assure that “all is clear” before disbursing funds.

The “gap”

Thus, with an escrowed closing, there is no “gap” between funding the recording.  The funds are not released until after recording and title updating showing no intervening liens or deeds.

However, with a roundtable closing, the funds are released to the seller at the closing table, and the deed and mortgage may not be recorded for hours or days.  In the meantime, in theory if not in practice, a deed, easement, mortgage or involuntary lien (such as a tax lien, a judgment lien or a mechanics lien) could be recorded against the real estate.

Since Ohio is a largely race/notice state as to the order of recordation of instruments (whoever records first without actual notice of someone else’s interest in the property “wins” the contest for priority), the later-recorded deed or mortgage would lose priority to an instrument intervening beforehand.

This is a large potential risk in terms of losing value for the buyer or lender.  The total value of the real estate can be lost as a result of such a priority issue.

This timeframe between closing (or the last title update) and the recordation of the title instruments is known in the real estate industry as the “gap.”

Insuring the gap

So, the issue for a buyer should be: Who is taking the risk for the gap?  It goes without saying that a seller delivering a warranty deed is promising to deliver good title to the buyer.  But what if the seller is a crook, bankrupt, deceased or simply un-findable after the closing?

Well, (a) if a buyer purchases an owner’s policy of title insurance, (b) specifically requests that the title company insure the “gap,” and (c) that “gap” coverage is issued at the closing table, then the buyer will be protected from losses from an intervening instrument.  If all three circumstance are not present, then the buyer is going to bear this risk and have claims solely against the seller for breach of warranty covenants.

Real-life experience

We recently were approached by a buyer from a round-table closing on a residential property.  It took the title agent six days after the closing to record the deed.  In the intervening timeframe, the seller gave a deed to a second buyer.  (Sure, this was entirely fraudulent conduct by the seller, but nothing should surprise us anymore.)  That second buyer’s deed went on before the deed of the first buyer.  The first buyer even purchased an owner’s policy of title insurance, meaning at the closing he obtained a “commitment” for a title insurance policy.  But that commitment did not contain “gap” coverage language, rather the policy was conditioned upon the instruments being recorded without loss of priority.

Conclusion

That particular matter is still in litigation, but, win or lose, this story highlights the grave risk of closing a transaction by roundtable closing, and failing to ask for and obtain affirmative “gap” coverage. This admonition applies equally in residential and commercial transactions.

Finally, this ties in with our earlier admonitions: (a) buy title insurance (Why title insurance?) and (b) Don’t just buy a title insurance policy; read the policy, on our Ivy Pointe Title blog.  While it would be nice to tell clients that protecting their interest is as simple as buying an owner’s policy of title insurance, it is not.  The buyer must read and understand the exceptions to coverage and also ask for “gap” coverage.  Otherwise, he retains significant risks of partial or total title failure.

 

Ohio real estate law: Treble damages available for “recklessly” damaging another’s trees or other vegetation

Author By Christopher P. FinneyPosted on

A powerful statute exists in Ohio for damage to trees and vegetation on the property of another.

Indeed, while one commonly would think that such a litigation tool would only be available to those injuring trees, the statute broadly covers damage to a “vine, bush, shrub, sapling, tree, or crop.”

Revised Code Section 901.51 provides, very simply:

No person, without privilege to do so, shall recklessly cut down, destroy, girdle, or otherwise injure a vine, bush, shrub, sapling, tree, or crop standing or growing on the land of another or upon public land.

In addition to the penalty provided in section 901.99 of the Revised Code, whoever violates this section is liable in treble damages for the injury caused.

Thus, any “reckless” damage to another’s vegetation of virtually any type or size can result in damages three times the value of the property damaged.

The referenced Revised Code Section 901.99 then also places criminal penalties for so damaging the vegetation on the property of another, making it a a misdemeanor of the fourth degree.

 

Commercial Leases: “No right of offset,” what does that mean?

Author By Bradley M. GibsonPosted on

For both landlords and tenants, there is curious and confusing phraseology in many if not most commercial leases relative to the payment of rent:

Rent will be paid without any set-off, counterclaim, deduction or recoupment whatsoever.

That sounds like (and is) a lot of legalese, but what does that mean?

It is, in fact, an important provision of commercial leases.  What it means is simply that rent is due from the tenant without delay or reduction based upon claimed breaches of the lease by landlord.  Thus, if the tenant thinks he has defenses to the payment of rent, or claims against the landlord, he must bring them in a separate court action and not use the tactic of offsetting rent — and delaying an eviction — based upon meritorious or frivolous claims of landlord breach.

The provision is not unnecessarily unfair to one side or the other.  Rather, it is a business term for negotiation between the parties.

From a landlord’s perspective, he is surrendering possession of the Premises to tenant and tenant should, month in and month out, pay him for that possession.  If the tenant is “starving” the landlord of rent, while the landlord has to pay his mortgage, taxes, maintenance and insurance, it is a painful and stacked deck against the landlord.  Further, while each month the tenant is getting the benefit of the bargain by occupying the premises, the tenant may prove uncollectible after months or years of litigation.  Further, landlord does not want to find himself in the position of pursuing rent — all the way through a trial — if the defenses of the tenant are entirely fictitious and manufactured just to buy time against an eviction for a rent default.

From the tenant’s perspective, if the landlord has made his building unoccupiable by severely burdensome practices — noise, dust, odors, lack of access or parking, non-operational elevators, bugs, vagrants, etc. — then why should he tender payment every month only to have to litigate in a separate forum to get some or all of that money back?  Further, a landlord can similarly bleed a tenant dry by extracting rent during the tenancy while failing to maintain his building.  And a landlord may prove judgment-proof as well at the end of litigation.

As a result of the weighing of the interests of the landlord and the tenant, there could be compromise language to sometimes standard form lease “no offset” language — for extreme circumstances that “put a tenant out of business.”  But prying that door open even slightly to give the tenant an “argument” against eviction could lead to months or years of costly litigation against a tenant who otherwise would be paying rent monthly.

# # #

Our firm practices extensively in the area of commercial lease drafting and litigation to enforce the same in Ohio and Kentucky.  We invite you to use our professionals to assist you with your investment properties.  Isaac Heintz leads our practice as it relates to commercial lease drafting and Brad Gibson heads our litigation group for its enforcement or defense.

At our core we are a Cincinnati real estate law firm, but we offer depth of experience in a broad array of areas of law

Author By Christopher P. FinneyPosted on

As we have grown, the vision of the Finney Law Firm is sharpening for our clients and the public: A broad array of services offered in one firm, each practice area delivered in a quality fashion.

At our core, we are a real estate firm, with experienced transactional attorneys, a title insurance company that insures residential and commercial titles, and commercial litigators who can address virtually every aspect of disputes relating to real estate: Eviction, foreclosure, title disputes, easement disputes, construction disputes and mechanics lien claims, as well as complex real estate litigation.

Beyond that, we offer quality estate planning and probate administration and our transactional team rounds our its services with corporate formation and development, including acquisitions, dispositions and financing.

Isaac T. Heintz, Kevin J. Hopper, and Eli Krafte-Jacobs, along with paralegals Tammy Wilson and Misty L. Winkler, and Richard P. Turner at the title company, lead our transitional team day in and day out.

Our litigators are well-known for our public interest practice — handing legislative and regulatory matters aggressively, confronting government officials who would illegally interfere with their life, their business and their fortune.  Three times we have ascended to the U.S. Supreme Court, and three times we won the relief we sought with 9-0 victories there.   We apply this same sophistication and vigor to commercial litigation, personal injury, wrongful death and medical malpractice matters.

Bradley M. Gibson, Stephen E. Imm, Julie M. Gugino, and Casey A. Taylor along with paralegal Brandy E. Fitch are our quality litigation team.

Finally, we are proud to recently have expanded our litigation services to include labor and employment law with experienced litigator Stephen Imm.

When a client asks “do you do that,” I am proud to respond “yes, and we do it well.  Let me introduce you to …..”

Let us know how we we can help with your business or personal opportunity or challenge.  It is with you in mind that we have assembled this team of quality practitioners.

Ohio real estate law: April 6 changes closings to require wires for monies over $1,000

Author By Christopher P. FinneyPosted on

Effective April 6, changes to Ohio’s Good Funds Law will require that all funds coming into and out of a title company trust account be wired funds with just two exceptions: (i) funds of $1,000 or less can be by personal check or cashier’s check and (ii) funds coming in from a Realtor’s escrow account (usually the earned money) are also permitted by check.

This change is significant in that if a buyer (or seller) is not prepared to pay their monies into a closing via wire, the closing could be delayed or the buyer (or seller) in placed breach of the contract.  We have been informed that out-of-town banks with no Ohio presence may require the account holder to appear in person at their bank branch to initiate a wire, and thus a trip out of town can be necessitated if arrangements have not been made in advance.

These new rules appear to be a result of ramped-up, sophisticated and aggressive wire fraud problems associated with real estate closings, and the State of Ohio is working to assure good funds in accounts to send behind each closing.

Realtors, lenders, buyers and sellers are all advised to be aware of the new good funds requirements and to plan ahead to assure your closing is not interrupted.  For additional information regarding Good Funds, please contact Ivy Pointe Title at [email protected].

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