So, you’ve bought the building. You have the vision. It is all becoming a reality.

Maybe it’s an old barn you want to turn into a wedding venue. Maybe it’s an abandoned industrial building you plan to convert into high end apartments. Maybe it’s a warehouse you envision as a gym, or a brewery, or a creative space. You see endless potential where other people see problems, and you are ready to bring new life to a property that’s been sitting idle.

The purchase is complete. The keys are in your hand.

Now what?

This is the point where many (if not most) redevelopment projects begin to stall. This stall is not because the idea is bad, but because the process that follows is far more complex than most people expect.

It Starts with Your Idea

Your vision for what your project could be is only the beginning. Redeveloping or revitalizing a building involves layers and layers of legal and regulatory requirements that happen behind the scenes, and the average person does not see. Zoning rules, permits, inspections, and occupancy approvals are not simple technicalities, they are what determine whether your project can legally move forward at all.

One of the biggest challenges is that these rules are not uniform. Every city, town, and municipality has its own zoning code, permitting process, and inspection requirements. What worked in one location (or what a prior owner may have done or told you worked for them) does not guarantee that your project will be approved.

Zoning Matters Most

Zoning should always be your first step. Zoning determines what uses are allowed in a given area. Commercial, residential, industrial, mixed-use. These are the general classifications that dictate whether your idea is ever permitted on paper. But zoning is not just about the neighborhood. It is also about the building itself.

A property may be in a mixed-use or commercial district, yet the building may only be approved for a specific use. Changing a building from storage units to an event space, from industrial use to gym, or from commercial to HUD apartments often requires formal approval. That process may involve variances, conditional use permits, or hearings before a zoning board. In many cases, that approval comes through a Board of Zoning Appeals, which is often called a BZA.

A BZA process typically involves a formal application, public notice and a hearing where the proposed use is reviewed by the Board of Zoning Appeals. Neighbors in the community may have the opportunity to comments, however, the board is the one that ultimately gets to decide it the variance or the conditional use will be granted. This process can be long and daunting and can affect the timeline of your project, the budget of your project, and even the feasibility of your project. It needs to be considered early, before construction begins.

Skipping a review of zoning or assuming that zoning approval exists can lead to significant delays and expensive corrections later on, particularly if a project moves forward with necessary zoning authorization.

Don’t Overlook Historic District Restrictions

Another issue that often surprises owners is historic zoning.

If a building is located in a historic district or subject to historic preservation rules, additional layers of approval may apply. Changes to the exterior of the building, the windows, doors, signage, building materials, and even paint colors can be regulated. In some cases, interior alterations may also be restricted.

Historic designation does not mean redevelopment is impossible, but it does mean the process requires careful planning and early coordination sometimes even requiring coordination with the historic conservation board of the city or community you are redeveloping in. Discovering these restrictions after plans are finalized (or after work has begun) can significantly increase costs and timelines.

You Need Permits for More Than You Think

Once zoning is confirmed and any required approvals are obtained, the next step is permitting. Permits are often where redevelopment projects quietly fall apart.

Many property owners assume permits are only required for major construction or structural changes; however, permits are required for far more than most people expect. Generally, permits are required for all new construction, major repairs, alterations to a building, additions to a building, major plumbing or electrical changes, HVAC systems, fire alarms, fire suppression systems, and structural modification. The permit process is put in place to allow inspectors to verify that work meets safety and building code standards.

Permitting also matters because it ties directly into a building’s approved use. When a building is being converted from one use to another permits help document that transition and ensure that building systems meet the standards require for the new system. When a building changes from commercial use to residential use the fire, electrical and safety requirements generally change.

Failure to obtain proper permits can lead to enforcement actions, fines, and delays. Importantly, it can prevent your building from receiving a Certificate of Occupancy. Without that certificate, your building cannot legally be occupied, even if the work is complete.

Permits are critical when cities conduct inspections or respond to complaints made about your building. If an inspector identifies work that was done without a permit it generally will make the issue much bigger than it could have been. What might have started as a limited inspection can turn into a comprehensive review of the building, increasing both your cost and risk.

Doing work without permits often feels faster at the outset, but it frequently creates larger problems down the road. Unpermitted work can delay inspections, trigger enforcement actions, or prevent a building from being legally occupied.

Inspections and Compliance

After permitted work is completed, inspections follow. Building, housing, and fire inspectors are responsible for ensuring compliance with applicable codes, safety standards and approved plans. Their role is not to manage a project, but to confirm that the building is safe and compliant.

When inspectors identify violations or noncompliant conditions, they typically expect the property owners or property managers to evaluate the building as a whole and correct similar issues wherever they exist. An inspector notes problems in one location, but that is often an indicator of a broader compliance concern, not a single, contained defect.

Treating inspections as a checklist of individual fixes can lead to repeated citations, additional inspections, and increased enforcement. Taking a comprehensive approach by understanding the code requirements and applying the consistently throughout the building, helps projects move forward more efficiently and reduces the risk of ongoing compliance issues.

The Certificate of Occupancy

All  of these steps lead to one essential requirement: the Certificate of Occupancy. A Certificate of Occupancy is the City’s confirmation that a building is legally approved for its intended use and safe for people to occupy. Even if the renovations are complete, the building looks exactly like it is supposed to, and everything it perfect, the building cannot be lived in, operated out of or opened to the public without a Certificate of Occupancy.

To obtain a Certificate of Occupancy, the City will typically require that zoning is correct for the intended use, all required permits have been properly obtained, and all necessary inspections have been passed. If any of those steps were skipped or handled out of order, the Certificate of Occupancy can be delayed or denied. If any of those steps were skipped or completed out of order, securing a Certificate of Occupancy becomes significantly more difficult.

Common Mistakes We See

We regularly see property owners run into trouble because they assume that if a building can be used a certain way, it must be allowed to be used that way. Relying on what similar buildings nearby are doing or what a prior owner did is a common, and costly, mistake.

Another frequent issue is failing to distinguish between the zoning of the area and the approved use of the building itself. Even in mixed-use districts, a building may not be approved for residential or event use without additional approval.

Unpermitted construction is another major problem. Electrical, plumbing, HVAC, and fire systems are often modified without permits, creating issues when inspections occur.

Historic district restrictions are also frequently overlooked, particularly when owners are eager to move quickly. Discovering those requirements late in the process can derail an otherwise well-planned project.

Perhaps the most challenging situations arise when tenants or businesses are already occupying a building before zoning, permitting, and occupancy approvals are in place. At that point, the process has to be done in reverse, often under the pressure of inspections or enforcement action.

Working Backwards Is Always Harder

Our firm regularly helps clients navigate zoning, permitting, inspections, and Certificates of Occupancy. We can assist in coordinating with local authorities, identifying compliance issues, and helping projects move forward.

However, it is important to be candid: it is far easier, and far less expensive, to do this correctly from the beginning. When zoning and approvals are addressed early, projects tend to move more efficiently and with far less risk. When issues must be fixed after the fact, especially when a building is already occupied, the process becomes more complicated, more time-consuming, and significantly more expensive.

Redeveloping a building can be an exciting and rewarding investment. However, it can also be a legal and regulatory disaster if the proper steps are skipped or misunderstood.

Before you renovate, lease, or open your doors, make sure you understand what approvals are required, what restrictions apply, and what order the process should follow. Doing it right from the start is almost always the most efficient path forward, and it can save you time, money, and stress in the long run.

 

For corporate executives and investors, I encourage them to look past their pursuit of the “upside” of their business (essentially, buying low and selling high), to also carefully protect their “downsides,” both predictable and seemingly out-of-the-blue unexpected liabilities: an employee or tenant or customer personal injury, a class-action lawsuit, a theft of funds resulting in insolvency, or just a change of fortunes in our dynamic economy and regulatory and tariff environment.

In this blog entry, we explore three tips as you are forming and operating your business to cover your downside: (a) good practices, (b) good insurance and (c) a corporate form.  In these two blog entries (here and here), we address how to operate that corporate form to maximize the value of the “corporate veil” protection.

And one of broad strokes in those articles is preventing liability from passing through to shareholders (in corporation) or members (in limited liability companies) personally.  The idea is that liability stays within the corporate form, and personal assets are isolated from rapacious lawyers and plaintiffs.

However, if you as a company owner or investor have all of your eggs in a single “corporate” basket, even if these strategies work, everything in that basket could possibly be lost in that catastrophic lawsuit (outside of or beyond insurance coverages).

This next idea is: Further segregate your assets into separate baskets.

  • If you have a manufacturing or service corporation, would it make sense that separate “divisions” of your company have entirely separate corporate forms, so that a catastrophic liability in one operation does not sink the entire ship that you have invested your entire career to build.
  • And more commonly, for real estate developers and investors with multiple properties, does it make sense to either make a new LLC for each individual large project, or — if you have many small investment properties — to form separate LLCs to hold and operate smaller baskets of those assets?  Many times it does.
  • And certainly for both asset protection purposes and tax purposes, it typically is wise to separate the ownership of an building occupied by the operating company, from the operating company itself.

Plaintiffs’ attorneys seeking a big payday under their lawsuit will still try to avoid these various corporate forms, by piercing the veil of one to seek the personal assets of the company owners (which would include the LLC ownership interest in multiple LLCs), but that step of piercing the veil is extremely difficult.  Segregating separate real estate assets and operating companies into their own LLC or corporation may help you weather the storm of that “out-of-the-blue” unexpected occurrence, legal or financial.

For help with the corporate structure of your assets, contact any of Isaac Heintz (513.943.6654), Eli Krafte-Jacobs (513.797.2853), Casey Jones (513.943.5673) or Ashley Duckworth (513.797.2864).

 

 

 

When it comes to expanding access to addiction treatment, it’s crucial for providers to understand their legal rights under the Americans with Disabilities Act (ADA) and the Rehabilitation Act. The anti-discrimination provision of these laws prohibit zoning decisions by local governments that discriminate against drug and alcohol rehabilitation programs, the clients of which are “qualified individuals with a disability.”

The ADA and the Rehabilitation Act prohibit local governments from:

  • Making zoning or siting decisions that discriminate against individuals with disabilities.
  • Selecting facility locations in ways that exclude, deny benefits to, or otherwise discriminate against individuals with disabilities.
  • Enforcing ordinances or regulations that treat treatment centers differently from other healthcare facilities.

Additionally, a city’s refusal to provide reasonable accommodations—such as a variance or zoning modification that allows a treatment facility to operate—is also discriminatory under federal law.

How this pairs with outreach:

As explained in Rebecca Simpson’s recent blog post, early outreach to elected and community leaders can clear up misconceptions and build allies. Additionally, by explaining these legal principles in plain language to council members, community development staff, and law directors, providers can help ensure that local officials fully understand their legal obligations – creating a foundation for cooperative, well-informed decision-making.

If a dispute still arises, providers can move from engagement to assertive advocacy—using their knowledge of the law and, when necessary, the courts to protect their rights while keeping the focus on timely access to care.

Rebecca Simpson is an attorney and seasoned government and public affairs strategist at Finney Law Firm. If you need support with community engagement, coalition building, or advocacy at the state or local level, you can reach her at Rebecca@finneylawfirm.isoc.net.

When opening or expanding addiction treatment facilities, providers often face fierce NIMBY (“Not In My Backyard”) opposition. While these concerns are common, they are not insurmountable. With the right strategy, providers can turn opposition into opportunity by building strong community relationships and showcasing the benefits of treatment access.

  1. Engage Early and Often
    The key to overcoming NIMBY opposition is to engage local leaders and community members early. Meet with local officials, and listen to concerns before applying for permits. Early engagement fosters trust and helps identify allies.
  2. Craft a Community-Focused Narrative
    Frame your facility as a community benefit. Highlight how treatment centers reduce crime, alleviate strain on hospitals, and provide jobs. Share success stories from other communities where these benefits became reality.
  3. Partner with Local Organizations
    Form alliances with local nonprofits, faith groups, or businesses. Partnerships show that you’re invested in the community’s wellbeing and not just a company seeking profit.
  4. Demonstrate Tangible Benefits
    Outline how your facility will bring jobs, improve public safety, and offer resources to families. Data and case studies can turn skeptics into supporters.

Building Trust Before You Need It

These strategies aren’t just for treatment providers—they’re valuable for any organization entering a new community. Thoughtful outreach allows you to create allies before you need them, and ensures that local leaders and decision-makers have accurate information about your company’s benefits before NIMBY voices can spread misinformation. It also gives them a direct point of contact when questions arise, fostering transparency and partnership rather than tension.

When Legal Strategy Becomes Essential

Even with proactive engagement, some projects will still face local zoning or permitting challenges. In those cases, there are important legal tools that can help. Drug treatment centers are afforded protections under both the Americans with Disabilities Act (ADA) and the Rehabilitation Act, which prohibit discriminatory zoning practices. When a well-planned outreach effort is paired with a strategic legal approach, providers can often resolve opposition and move projects forward while preserving community trust.

Overcoming NIMBY opposition requires planning, empathy, and expertise. The most successful outcomes come from pairing thoughtful community outreach with a clear understanding of the legal framework that protects access to care. If you need support navigating these challenges, expert guidance can make all the difference.

Rebecca Simpson is an attorney and seasoned government and public affairs strategist at Finney Law Firm. If you need support with community engagement, coalition building, or advocacy at the state or local level, you can reach her at Rebecca@finneylawfirm.isoc.net.

Most legitimate real estate contracts, both residential and commercial, include a provision dictating the specific form of deed that will be exchanged between the Seller and Buyer at Closing. However, particularly for relatively inexperienced parties, this can seem like a “throw away” provision that doesn’t hold a great deal of weight. This could not be more wrong.

In Ohio, we generally see four different types of deeds: (i) a general warranty deed, (ii) a limited warranty deed, (iii) a quit claim deed, and (iv) a fiduciary deed. The type of deed selected to transfer the property has implications concerning the title conveyed from Seller to Buyer and the Seller’s potential liability for any title defects moving forward, often independent of any owners’ policy of title insurance (if one exists).

Before diving into these different types of deeds, perhaps the more basic question to understand is: What is title? Title to real estate relates to any rights or claims to a property. It encompasses the right to own, possess, use, control, enjoy, dispose/sell, or exclude others. Buyers seek as clear of title as possible and as many guarantees of the same as the Seller is willing to give. On the other hand, the Seller should be mindful of the promises it is making based on the type and language of the deed.

General Warranty Deeds

Perhaps the most common form of deed, especially in the residential context, is a general warranty deed. The inclusion of the words “general warranty” constitutes a promise by Seller that:

  • Seller is the fee simple owner of the property;
  • The property is free from all encumbrances;
  • Seller has the right to sell the property; and
  • Seller will defend Buyer relative to each of these promises, forever, against the lawful claims or demands of all persons.

Ohio Rev. Code 5302.06. Thus, for example, if a property is transferred with general warranty covenants, and someone later claims to have an easement over the property, the Seller has an affirmative duty to defend the Buyer’s title, which also includes payment of Buyer’s attorneys’ fees. You can read more on the duty to defend here: https://finneylawfirm.isoc.net/ohio-real-estate-law-triggering-duty-defend-general-warranty-deed-claim/.

This is obviously a tall order for two relatively unassuming words and therein lies the importance of understanding what they mean and their implications.

Limited Warranty Deeds

When transferring a property via limited warranty deed, the Seller is promising to convey as good of title as he or she received. Essentially, this means Seller is promising that Seller did not do anything to impair or encumber the title to the property. However, it is not as broad as a general warranty deed which covenants the same relative to periods both prior to and during Seller’s ownership of the property.

Fiduciary Deed

A fiduciary deed transfers property from a Seller acting as—you guessed it—a fiduciary (e.g., a trustee, executor of an estate, etc.). This connotes that the Seller is not the direct owner but is selling the property on behalf of another person or entity, that they are duly appointed to serve in that capacity, that they have legal authority to sell the property, and that they have followed all statutory requirements. A fiduciary deed does not make any warranties relative to title. Otherwise, fiduciaries could face liability relative to title defects for property that isn’t even directly theirs, resulting in a chilling effect where individuals would seldom wish to serve in such capacity for fear of such repercussions.

Quit Claim Deed

A Quit Claim Deed, likewise, makes no warranties or representations relative to the title of the property being transferred. It is somewhat akin to an “as is” clause but, instead of the physical condition of the property, it relates to the title.

Differences between the Contract and Deed

Scenario 1: Seller makes broad representations in the Contract to Purchase or Purchase and Sale Agreement (PSA) that he or she is conveying good, clear title free from all encumbrances, but then there is only a limited warranty deed.

Scenario 2: Seller is skittish and does not wish to make any representations as to title but will otherwise agree to convey title to the property using a general warranty deed.

Unless the Contract or a particular provision therein specifically states that it will survive Closing then, at the Closing, the Contract merges with the Deed. This means that any conflicts as between the Contract and the Deed are resolved in favor of the Deed and what the Deed says is what controls. In Scenario 1 above, the Seller would only be liable, and the Buyer would only have recourse against the Seller for, any defects that occur during Seller’s ownership. In Scenario 2 above, Buyer could concede on requiring representations in the Contract because the general warranty deed covenants have the same effect and those are what will control should an issue arise post-closing. These are but a couple of examples illustrating the practical effects of the type of deed used to convey property and the ways in which the type of deed can impact contract negotiations and ongoing liability as well.

In any event, we always recommend that Buyers purchase an owner’s policy of title insurance (this is in addition to the lender’s policy, which only protects the lender). This is especially true where the Buyer is taking title via limited warranty, fiduciary, or quit claim deed, as their recourse against the Seller will be extremely limited, if not non-existent.

For help negotiating the purchase or sale of real estate or understanding the terms thereof, including the deed provisions, please reach out to Attorney Casey A. Jones at (513) 943-5673 or Casey@FinneyLawFirm.com. We are happy to assist clients who are buying or selling with or without a real estate agent; however, if you do have an agent, we will work alongside your agent to ensure the most appropriate and comprehensive representation to protect your interests.

 

Judge Patrick Dinkelacker this week issued a ruling in a case that has been simmering since December of 2024 in favor of our client, Lee Robinson, recognizing our client’s right to what Ohio law references as a “prescriptive easement” over portions of property on which a developer had planned to place retail shops, a boutique hotel, apartments and an underground parking garage.

The decision establishes our client’s right — acquired by usage and by operation of law (see below) — to have vehicular ingress and egress over portions of the developer’s property, meaning his accessway must be maintained as it is, and the grade of the entrance to our client’s parking lot must stay the same.  Since the developer’s plan were to engage in construction activity blocking the easement area, and it planned to place buildings in the easement area and change the grade of the easement relative to our client’s parking lot, the developer is effectively prevented from moving forward with currently-planned development.

It is generally a surprise to lay persons (and some attorneys), but one can gain ownership of another’s property in most states (if not all), including Ohio and Kentucky, by continued occupancy and use of the property for a protracted period of time — in Ohio 21 years and in Kentucky 15 years.  In law school we learn the five required elements to achieve this end as O.C.E.A.N.: Open, Continuous, Exclusive, Adverse and Notorious use and occupancy of the property.  If proved, in Ohio by “clear and convincing evidence,” then the adverse possessor has full legal ownership of and title to the property.

A stranger to title can also acquire the lesser right of “easement” over another’s property by eliminating the “exclusive” part of the adverse possession requirements, so O.C.A.N, for the same 21-year period in Ohio, to establish what is known as a prescriptive easement.  This easement is every bit as good or better than an easement given by express grant, and (for example) passes with title  to the property benefitted by the easement.

It was precisely this type of “prescriptive easement” benefiting Finney Law Firm’s client’s property on Hyde Park Square that Judge Dinkelacker recognized by his decision this week.

The team that prepared and tried this case (the preliminary injunction hearing) were Christopher Finney, Julie Gugino, J. Andrew Gray, Mickey McClannahan, and Emma Friedhoff, among others, greatly aided by Steve Griffith of Taft Law.  Our expert witness at trial was noted Clermont County attorney and title insurance agent Doug Thomson.

You may read the whole decision here: Robinson Decision

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 casey@finneylawfirm.isoc.net or (513) 943-5673.

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.

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.

As reported here and in our prior newsletter, new legislation requires owners of small businesses (including LLCs and corporations; under $5 million in revenue) to report their owners’ names to the federal agency known as FinCEN (Financial Crimes Enforcement Network).  There is a fine of up to $500 per day for violations, so this is a regulation that should not be ignored.

For new LLCs and corporations, the deadline is within 90 days of the formation.  For LLCs and corporations in existence as of January 1st of this year, the deadline is January 1. 2025.

Finney Law Firm attorney Casey Jones has carefully researched and written about the new FinCEN requirements and is heading our efforts to educate our clients on the intricacies of the statute and to assure compliance by our firm and our clients.

  • On Tuesday, May 14, at noon Ms. Jones will conduct a webinar informing clients of the new FinCEN requirements and answering questions you may have.

The link to sign up for the webinar is here.