As we explained previously, the pandemic relief bill that has been approved by both Houses of Congress, but still awaits the President’s signature, contains good and bad for our nation’s market-rate residential landlords. From the article:

  • It extends the CDC eviction moratorium through January 31, 2021 (and it is expected to be extended further from there under the Biden Administration).
  • Tenants can qualify for up to 15 months of federal rental assistance.
  • The criteria for qualification are not clear as of yet.
  • This assistance partly will cover months of unpaid back rent, rewarding landlords who have not evicted during the COVID-19 pandemic. A landlord cannot get back rent if the tenant has already left.
  • Rental assistance money will be distributed by states and cities.
  • Renters will apply for the help, and the money will be sent directly to their landlords. If a landlord doesn’t cooperate, the tenant can access the funds directly.
  • Renters looking for assistance can call 211 or go to the website www.211.org. It’s a confidential referral and information help line and web site.

So, the landscape will be changing soon very significantly in the relationship between landlord and tenant in the affordable housing sphere.

We will post more detail as it becomes available.

Contact Chris Finney (513.943.6655) if you have questions.

This week, the Cincinnati Area Board of Realtors addressed a topic on which I have written previously: The proper form to use to terminate a real estate contract pursuant to the failure of a contingency such as inspection or financing contingency. Their blog entry and this one address termination of the form Cincinnati Area Board of Realtors residential purchase contract.

Cindy Henninger, director of Professional Services of the Board wrote this blog entry about the use of a “Notice of Termination,” which is a one-party notice from the buyer to the seller to exercise a contingency and terminate a contract. No seller signature is required for it to become effective. The other form available from the Board and commonly in use in the greater Cincinnati/Dayton marketplaces is a “Mutual Release,” which is not appropriate for use when the buyer is simply exercising his unilateral right to terminate.

Here’s why: The Release form requires the seller’s signature and therefor his consent. And if the seller refuses his consent, there could be an issue that the buyer did not in fact terminate (but simply rather proposed termination).  Then, if the time period lapses for termination pursuant to a financing or inspection contingency while awaiting the seller’s signature, the seller then may say “too late.” I know because a seller tried this on me once.

I wrote on this topic previously, here.

Realtors would be advised to familiarize themselves with the proper form to use. Otherwise, you may find your self in a “what the heck?” moment of lawyerly interpretation over the use of the wrong form, even though everyone knows what you in fact intended.

For assistance with transactional matters, including contract disputes, feel free to contact attorneys Jennings Kleeman (513.797.2858) or Eli Kraft-Jacobs (513.797.2853)

 

Entertain us, if you will, as we serve as Jacob Marley to landlords in visiting the ghosts of eviction moratoriums, past, present and future.

After months of experience with the eviction moratorium imposed by the Centers for Disease Control, we now know that most residential evictions — even those for non-payment of rent — can proceed per normal procedures, at least until new regulations are issued and the moratorium never applied to eviction for issues other than non-payment (e.g., criminal activity and damaging the premises,)

The past

As reported here, the Centers for Disease Control on Friday, September 4, 2020 imposed a residential eviction moratorium for non-payment of rent in certain limited circumstances through the end of the year due to the impact of COVID-19. That relief required the tenant to certify that 1) the individual has used best efforts to obtain government assistance for the payment of rent, 2) the individual falls below the above-income thresholds ($99,000 for individuals and $198,000 for those filing jointly), 3) the individual can’t pay rent due to loss of income or medical expenses, 4) the individual is using best efforts to pay the rent or as much of it as he can, and 5) eviction would render the individual homeless.

And as we report here, the CDC clarified that Order, allowing for more vigorous actions by landlords pursuing eviction: Cross examination of a tenant who claims he has met the criteria, allowing commencement and pursuit of an eviction action even if the set out is not until after the first of the year, and imposing criminal penalties upon tenants making false certifications.

The present

Our experience in recent evictions is that many tenants cannot stand up under cross examination as to the CDC certifications: They usually have paid no rent at all, which hardly ever complies with the CDC “best efforts” criteria, and it is unlikely the eviction will result in homelessness for the vast majority of tenants.

In Hamilton County, before conducting the forcible entry and detainer hearing, the Magistrate has a separate evidentiary hearing on whether the CDC criteria are met — including allowing a landlord to cross examine a tenant — and then, when the tenant fails to meet this burden, allows the eviction hearing to proceed. In all, the takes an extra  5-10 minutes to try an eviction case and we have not yet failed to exceed the CDC standards.

The future

Add to all of this the fact that an eviction commenced today won’t result in a set out until well into January. Thus, the moratorium no longer has any application to new evictions being filed.

Finally, we don’t know either how the Trump administration will address the regulations after their year-end expiration until his term ends on January 19th, or how the new Biden administration will address the issue thereafter. For both Presidents, the issues are difficult: Millions of tenants are facing severe financial hardship as a result of the COVID-19 crisis, but on the other hand, landlords have to pay bank loans, real estate taxes, building repairs, and for insurance. Many can’t meet their obligations if tenants are not paying their rent. Then, if they start en masse to default on mortgage loans, it could destabilizing banks as in 2007-08. These are not easy issues for anyone.

So, the next few weeks and months will determine a new course for landlord-tenant legal relationships. Stay tuned for more updates, and contact Chris Finney (513.943.6655) with any Ohio or Kentucky eviction issues you may have.

As many in the Ohio real estate, title and finance industries are aware, this firm along with the firm of Markovits, Stock and Demarco are co-counsel to several Plaintiffs challenging a long-running real estate scam that has ensnared hundreds of victims in the greater Cincinnati marketplace.

The Complaint alleges causes of action under Civil RICO, Civil Conspiracy, Breach of Fiduciary Duty by both the various Build Realty companies, First Title and Pat Connors, Negligence against First Title and Pat Connors, Unjust Enrichment, and a declaration that the various schemes designed to avoid the statutory right of redemption and the right of a borrower to excess proceeds under a lending arrangement are illegal, and that the trusts themselves are illegal and contrary to public policy.

The defendants in the proposed Amended Complaint include:

  • Build Realty, Inc.
  • First Title Agency, Inc.
  • Edgar Construction, LLC
  • Cincy Construction, LLC
  • McGregor , First Title, LLC
  • Cowtown Holdings, LLC
  • Build SWO, LLC
  • Greenleaf Support Services, LLC
  • Gary Bailey as Trustee and individually
  • George Triantafilou, as trustee and individually
  • Robert Scott Whiteside
  • G2 Technologies, LLC
  • GT Financial, LLC
  • Five Mile Capital Partners, LLC
  • Smith Graham & Co., Investment Advisors, L.P.
  • Pat Connors

A copy of the proposed form of Amended Complaint is here and below.

It appears this case will soon be moving forward before Federal District Court Judge Cole.

We will endeavor to keep victims updated by means of this blog as developments occur.

If you have questions, it’s best to email Christopher P. Finney. You may also call him at 513-720-2996.

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Faith is the Overcoming Victory! 1 John 5:4-5 - Therefore Now ...

Well, that didn’t take long.

On Monday, Finney Law Firm filed suit against Hamilton County’s Municipal Court Judges  at the Ohio Supreme Court to make them re-open eviction proceedings that had been shut down since March 15.

Just last week, presiding Judge Heather Russell had signed an order extending the eviction moratorium through July 1, and the Clerk was not scheduling new hearings until the end of July. In fact, the Clerk’s office was telling prospective plaintiffs that they had no idea when eviction court would re-open.

As is reported here, Hamilton County was the second-to-last of Ohio’s 88 counties to re-open eviction court.

On Wednesday, the Judges met and, possibly motivated by our law suit, voted to re-open eviction proceedings  essentially immediately, Monday, June 8. We’ll consider that a victory for our client!

We also want to thank the Cincinnati Real Estate Investors’ Association (CREIA) and the Ohio Real Estate Investors’ Association (OREIA)  for their initiation and funding of the suit!

Finally, our co-counsel, Curt Hartman led the legal team on this quick and successful battle.

Jennifer Edwards Baker of Fox 19 has the story here.

Dan Horn of the Enquirer has the story here.

Hamilton County Court House

The COVID-19 crisis has created a series of delays in civil and criminal cases.  One of those casualties has been residential evictions in Hamilton County.

The problem

No evictions hearings have been held since March 15, and the earliest they are scheduling new hearings at present is July 28. This means not only that landlords can’t clear their properties of tenants who won’t pay rent, but also that tenants who deal drugs, damage property — or even worse criminal behavior — can stay in possession now for more than five months before the landlord can have a hearing to restore possession of the property to him.

Suing the Judges

Finney Law Firm has initiated a relatively unused action — for a Writ of Procedendo — to force the Hamilton County Municipal Court Judges to proceed with forcible entry and detainer actions. The Complaint, captioned State Ex rel. Salvador Properties v. Judge Heather Russell is here.

Other counties

Below is what our research has shown other counties currently are doing (note “per normal” noted below means you can timely get a decision in an eviction case; there may be modified procedures and hours to accommodate the crisis):

  • Butler County: Holding hearings per normal;
  • Warren County: Holding hearings per normal;
  • Clermont County: Holding hearings per normal;
  • Franklin County (Columbus): Holding hearings per normal;
  • Montgomery County (Dayton): Holding hearings per normal;
  • Summit County (Akron and all Municipal Courts): Holding hearings per normal;
  • Lucas County (Toledo): Holding hearings per normal;
  • Mahoning County (Youngstown): No hearings being scheduled; and
  • Cuyahoga County (Cleveland and all Municipal Courts): Cleveland and Cleveland Heights are holding hearings after 6/15/20 and 6/17/20, respectively, and other Municipal Courts (Shaker Heights and Berea) are holding hearings per normal.

So, of surrounding counties and Ohio’s major urban counties, only Mahoning (Youngstown) and two of four Municipal Courts in Cuyahoga County are further delaying eviction hearings for COVID-19 issues. Other than Youngstown with no hearings being scheduled at all, Hamilton County presently is the worst in the State for scheduling eviction hearings.

Conclusion

This suit is one in a series of actions initiated by Finney Law Firm to re-open Ohio business and Courts that have been closed under the COVID-19 crisis. For more information, contact Chris Finney (513.943.6655).

Federal District Court Judge Douglas Cole today issued  an important 51-page decision in Compound Property Management, LLC, et al, v. Build Realty, Inc., et al., the real estate/RICO class action  law suit that seeks to stop what Finney Law Firm alleges are illegal and fraudulent practices by a group of Defendants and obtain monetary recovery for our clients.  Potential class action members number more than 450.

Defendants who participated in the scheme include:

  • Build Realty, Inc.
  • Edgar Construction, LLC
  • Cincy Construction, LLC
  • MacGregor Holdings, LLC
  • Cowtown Holdings, LLC
  • Build NKY, LLC
  • Greenleaf Support Services, LLC
  • Build SWO, LLC
  • Gary Bailey
  • George Triantafilou
  • First Title Agency, LLC
  • GT Financial, LLC
  • G2 Technologies, LLC

You may read the federal Complaint here.

You may read Federal District Court Judge Cole’s the ruling on the Defendants Motions to Dismiss here.

For more information on this case, continue to monitor this blog, or contact Chris Finney at 513-720-2996.

As we have written here and here, the coverage provided by title insurance is particularized to the policy issued, and that is usually tailored to the property insured.

Background

In other words, when someone wants to buy a property, the title insurance company hires a title examiner who conducts a title search of the subject property and ascertains monetary liens, easements, covenants, restrictions, and other encumbrances against that property to be insured. Then, a title insurance policy is prepared that lists as exceptions to coverage the encumbrances found to be of record. It has to be this way; an insurer simply can’t insure against and over valid easements and other encumbrances.

As we have discussed previously, then, for a buyer/insured to know the quality of title he is receiving, it is not enough to obtain an Owner’s Policy of Title Insurance.  Someone has to read the policy and read and understand the encumbrances excepted from coverage.

For almost all parcels in urban and suburban areas, there are some easements, and if you are not careful there could be monetary liens that need to be released. These might be subdivision (residential and commercial) covenants, reciprocal easement and maintenance agreements, utility easements (which circle every commercial and residential subdivision) and other easements and covenants.

Very occasionally, typically in a rural area with no recent development, you will find a parcel with no easements, no covenants, no restrictions, and no monetary liens, but it’s a relative rarity.

My friend is buying an investment property

So, this week, a friend of mine called me.  He was helping his daughter who invests in real estate with financing a property for a “flip.”  Someone else has selected another title company, and he asked me to assure that the title would be clear.

I told him, as I have advised on this blog, someone needs to review the deed, and someone needs to carefully review both the title insurance policy and the exception documents referenced therein.

So, he asked the title insurance company for a copy of the policy pro forma, or a commitment for title insurance and the exception documents.

The clueless clerk at a title company

In return, a clueless clerk at said title company sent a blank form policy, with only pre-printed Schedule B-1 exceptions. These are such standard things as taxes not yet due and payable, things a  survey would disclose, and mechanics liens. Many of these pre-printed exceptions can be deleted by means of a Title  Affidavit provided by the seller at closing, but none of them reveal the exceptions to be taken by a title examination of the specific property.

In other words a title company would be crazy to issue such a policy, as it would insure over actual title deficiencies that would create a loss to the title company to remove such restrictions or pay for any “damage” arising from their existence.

An innocent inquiry to get the real policy

Therefore, I wrote to the clueless clerk as follows:

I have reviewed the documents you sent to my client in this matter, and candidly they are not at all helpful or informative.

 A title policy is only as good as its terms, and the terms of a title policy are dependent on the exceptions to coverage set forth in Schedules B-1 and B-2.  The form you sent is just a blank form.  Now, if you are promising to issue a policy with no exceptions, except those pre-printed, that is great.  Just confirm that.  If not, we will need to (a) know exactly what the exceptions are to the policy being issued (i.e, this actual policy to this actual buyer for the purchase price for this actual property) and (b) see and read the exception documents, meaning we will need copies of them.

 Let me know and thank you.  

I thought it was pointed, but polite.

What just happened?

Her response simply stunned me:

Every policy that we issue is free of exceptions except for those that are pre-printed.

I hope this clarifies the issues laid out so we can remain on schedule.

This is amazing. Her response indicates that on every policy (not just this one) that they write, they don’t bother to perform a title examination, and make no exception to coverage.

I mean this is fantastic for buyer, but not the underwriter. Every title problem magically is insured over, and a buyer is always assured they have fee simple, unencumbered, absolutely clear title in every closing.

I want some of that coverage!

Conclusion

So, I told my client: “Close”! You can’t get coverage that good from me or any other title company.  That is simply amazing.

[Now, notwithstanding her promises, I look forward to seeing the language of the actual policy when it is delivered to my client, and my subsequent insistence that the title company issue precisely the coverage that had been promised. This should be fun!]

Yes, that really happened this week.