J. Andrew Gray, Author at Finney Law Firm

On June 12, Judge Donald E. Oda II of the Warren County Court of Common Pleas ruled in favor of the sellers of a home, represented by attorneys Andrew Gray and Christopher Finney, dismissing claims for breach of contract and fraud made by their realtor. The sellers, a couple moving from their home in Warren County, had terminated their contract with the original realtor and eventually successfully sold their home with a new realtor. The original realtor was not paid a commission by the brokers in the transaction, and filed suit against his employer and the sellers.

Under Ohio Revised Code 4735.21, only a licensed real estate broker may file a lawsuit to collect commission or other compensation in connection with a real estate transaction, and a real estate sales person can only collect money in the name of their broker. In the lawsuit, however, the realtor, who was only a licensed real estate salesperson, only alleged his status as a realtor in the complaint.

After the Finney Law Firm and the attorneys for the broker both filed motions to dismiss the plaintiff realtor’s claims, the Court – only three days after the motion was fully briefed – dismissed the complaint in its entirety. First, all claims for breach of contract against the sellers were dismissed because seller’s contracts were with the broker alone, who brought no claims against the seller; additionally, the plaintiff realtor had no claims against sellers under R.C. 4735.21. Finally, all claims for fraud were dismissed because they were duplicates of the contractual claims.

This brings up several important points:

Being a “realtor” is not a status of licensure under Ohio law – it is only membership in the National Association of Realtors, or one of its local branches.
Licensure as a “real estate salesperson” or “real estate broker” is entirely separate from status as a realtor.
Any contracts that a consumer may have with a realtor or real estate salesperson are actually with the real estate broker; the real estate salesperson or realtor is only the “agent” of the broker.

The result may seem unfair at first but, upon reflection, the policy reasons for R.C. 4735.21 are relatively simple. Real estate brokers have a variety of salespersons in the field, showing, selling, leasing real estate. However, all of those funds are ultimately the responsibility of the broker themselves. In a real estate transaction, all funds are transmitted through the brokers; so, when a real estate salesperson is entitled to a commission, the payment of that commission is truly a matter between the broker and the salesperson, not between the salesperson and the parties to the transaction. R.C. 4735.21 is intended to prevent the employment compensation disputes between the brokers and salespersons from involving the parties to the transactions, which can range from large companies to individuals buying, selling, or renting a home.

Regardless of the reasoning, the case represents another victory and successful result for our clients.

Introduction

Is your neighbor violating a county, township, village, or city zoning ordinance? Have you reported the violation to your local government, but the local government refuses to take action? If your neighbor’s violation affects your property value, you may be able to sue directly and enforce the zoning code.

In this article, I will be discussing the right of private landowners to sue under and enforce county, township, village, and city zoning codes against nearby property owners or users, specifically those who are impacting the landowner’s property value or rights.

Background

Zoning ordinances, codes, and regulations are laws enacted by local governments, such as counties, townships, villages, and cities. Zoning laws are designed by local governments to control what a landowner may do with their property and how the property can by improved or changed. The most impactful form of zoning laws relate to land use; for example, a property zoned for a residential land use can only be used for homes, apartments, or condominiums, restricting the landowner from opening a commercial use like a store. Some zoning laws further restrict the intensity of land uses, stopping a landowner from building an apartment within a zone designated for single-family homes. Further, zoning laws can affect the size and placement of buildings, fences, and other improvements through maximum building height restrictions, minimum setback requirements, and minimum parking requirements.

As a general rule, most zoning ordinances, building and housing codes, and other local laws cannot be enforced by a private party. Typically, the local government is the only party with “standing” to enforce such a law. “Standing” is the legal term for the right of a person to file a lawsuit. However, some state laws create a private cause of action to stop or prevent a zoning violation, granting a landowner standing to sue a neighbor or adjoining landowner, as discussed below.

Statutes

Three Ohio statutes grant private landowners the right to sue for a neighbor’s violation of a zoning ordinance – R.C. 713.13 for landowners in cities and villages, R.C. 519.24 for townships, and R.C. 303.24 for counties. These statutes allow private landowners to sue for an injunction against neighbors acting in violation of the zoning statutes if the private landowner is or would be “especially damaged by such violation… .”[1] Injunctions are remedies which do not provide for damages, or monetary relief, but are court orders which directs a party to act or not act in a certain way. For example, if your neighbor is running a business out of their garage, an injunction could force the neighbor to close the business or move it to a different location.

Legal Standing to Sue

In order for a private landowner to have standing to sue for zoning violations, the statutes require that landowners be “especially damaged” by the zoning violation they are trying to enjoin. Ohio courts have fleshed out several avenues by which a landowner can show special damages from a zoning violation sufficient to grant standing to sue.

Lowered property values constitutes special damages; the landowner’s or an appraiser’s testimony that the landowner’s property value has diminished is sufficient to prove standing.[2] Additionally, Ohio courts have found that a landowner has established special damages from a zoning violation where the “character of the neighborhood would be affected in a different manner from other [similar] properties by the proposed use.”[3] Finally, a landowner has a special injury and standing to bring suit where the zoning violation interferes with the landowner’s use and enjoyment of their land.[4]

While R.C. 303.24, R.C. 519.24, and R.C. 713.13 grant a landowner the right to sue for a neighbor’s violation of a zoning statute, whether an injunction is granted is determined by the circumstances, including the costs of compliance with the law and the harm to the landowner created by the violation.[5]

Conclusion

If you need help with local zoning codes or real estate law in Ohio, wish to enforce a local zoning law as discussed in this article, or would like to learn more about zoning and other property codes, contact Chris Finney 513.943.6655, Jessica Gibson 513.943.5677, or J. Andrew Gray 513.943.6658 today.

[1] R.C. 303.24; R.C. 519.24; R.C. 713.13.

[2] Conkle v. S. Ohio Med. Center, 4th Dist. Scioto No. 04CA2973, 2005-Ohio-3965, ¶ 14.

[3] Ameigh v. Baycliffs Corp., 127 Ohio App.3d 254, 262, 712 N.E.2d 784 (6th Dist.1998), see also Verbillion v. Enon Sand & Gravel, LLC, 2021-Ohio-3850, 180 N.E.3d 638, ¶ 46-47, appeal not accepted for review 166 Ohio St.3d 1414, 2022-Ohio-554, 181 N.E.3d 1209.

[4] Miller v. W Carrollton, 91 Ohio App.3d 291, 296, 632 N.E.2d 582 (2d Dist.1993).

[5] Garcia v. Gillette, 11th Dist. Ashtabula No. 2013-A-0015, 2014-Ohio-1868, ¶ 29.

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Private Cause of Action for Zoning Violations in Ohio