Effective October 17 of this year, recording fees increase for real estate documents by $6 to the schedule linked below. The first two pages will cost $34 and it is $8 for each additional page.
The official schedule is below and linked here.
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A cashier’s check is better than an ordinary personal check, right? You can rely on it and turn around the cash quickly, right?
Well, no.
Not only is a bad or fraudulent cashier’s check no better than a bad personal check, there is raging fraud involving cashier’s checks on the internet: Craigslist, Facebook marketplace, etc.
Read this article on the topic.
The Ohio standard for “marketable title”
The standard for real estate title is, without putting too fine a point on it, pristine. This is true not only in Ohio, but but in every state.
Indeed, one really could put a fine point on it. Nearly any title defect can be a “cloud” on title that impairs its marketability.
Some minor title defects are OK
As is addressed here, some title defects can be “papered over” with title insurance; others are made acceptable under the marketable title act or standards and customs that allow title attorneys and title insurance companies to ignore minor defects. Both of these solutions can allow a transaction to close.
But the standard in title is, essentially, perfection. A buyer is not going to buy, a lender is not going accept a mortgage to secure a loan, and a title insurance company is not going to insure matters that are a “cloud” to title to real estate.
An unreleased Land Installment Contact “clouds” title
I recently helped a client who had “sold” their home on Land Installment Contract. After three years of payments, the buyer was to pay the balance of the Land Installment Contract, a “balloon payment,” and then get a deed conveying title to the property. Unfortunately, the buyer defaulted and moved out of the property at the end of the term.
[Is the buyer liable for monetary damages in such circumstance? Probably. But the cost to pursue those claims many times exceeds the recovery. Many sellers are wise to just pack their bags and move on to the next opportunity.]
The seller was able to quickly re-sell the property to another buyer, but the recorded land installment contract constituted a “cloud” on title, making title unmarketable. When the closing was set to occur, the title insurance company for the lender and buyer refused to pass on the title.
How do you clear title “clouds”
There are two ways to clear a “cloud” of this type: (a) buyer and seller jointly execute a notarized document in recordable form voluntarily terminating the Land Installment Contract or (b) a signature of a Common Pleas Court Judge in an appropriate proceeding extinguishing the Land Installment Contract and then the passage of an additional 30 days to avoid an appeal of that decision (or the exhaustion of appellate rights all the way through the Ohio Supreme Court).
Other than these two alternate steps, there is no “shortcut” to clear and marketable title to defeat a Land Installment Contract that is of record.
And the judicial proceedings could take 12 to 36 months, or even longer, to clear the title problems.
Many title problems can only be addressed in the same way: Either the party who has a colorable claim must sign a recordable instrument releasing the claim or a Judge, after appropriate due process of judicial proceedings, signs an Order wiping away the title claim. This can be an extended and expensive undertaking.
How can an owner avoid the fate of a “clouded” title?
How can a seller avoid the fate of an impaired title?
First, buy property only after a title examination and with a proper owner’s policy of title insurance.
Second, once you own property that has clear title, don’t sign and record a Land Installment Contract clouding the title. (Or, get a significant enough up-front down payment make it worth the while of judicially extinguishing the buyer’s interest at a later date if he defaults.)
Similarly, granting voluntary but poorly-thought-through covenants, easements, mortgages and other instruments can foul one’s real estate title and make the title either unmarketable or less valuable than otherwise might be the case.
Involuntary “clouds”
This blog entry addresses problems that an owner causes by his own signature. But other title problems can arise from, for example, mechanics liens arising from unpaid claims of a contractor on real property, defects that existed when an owner took title to property, and affidavits that another party places of record unilaterally declaring an interest in your land. These, too, may require one of the two steps noted above to clear, but they are not as easily avoided as ones created by the owner’s own hand.
Conclusion
The essential message of this blog entry is that title is a delicate thing, and can be “clouded” or impaired easily. Thus, don’t voluntarily sign documents — even if they might initially seem like a good idea — that will constitute a cloud on title, at least not without careful consideration. Cautiously think through the impact of documents that you voluntarily elect to place of record.
Here are links to the media articles on today’s Finney Law Firm win against the Village of Bratenahl on an important Open Meetings decision under Ohio statute.
We will update this blog entry as new stories come online.
In August of 2019, a unanimous Ohio Supreme Court declared that secret ballot voting violates Ohio’s Open Meetings Act in a win for Finney Law Firm and its client, Pat Meade. The decision was authored by Justice R. Patrick DeWine and can be read here and below.
In the Bratenahl case, the City Council had selected its president pro tem by secret votes on slips of paper handed to their law director, so others on Council and the audience could not see how their council members individually voted. The secrecy was quite intentional. The result, ultimately after three separate rounds of paper ballots, was then announced by the law director. Thus, the question was squarely presented in court as to whether votes could be made in secret.
To us, the question of whether “opening meetings” includes public votes was obvious, but it was not so obvious to the Cuyahoga County Common Pleas Court, which ruled against our client on summary judgment. The Cuyahoga County Court of Appeals (8th District) agreed with the trial court by a 3-0 decision.
So, having lost unanimously before all four Judges to hear the issue, we, along with our client, determined to proceed before the Ohio Supreme Court, an against-the-odds process as the Ohio Supreme Court accepts only approximately 5% of appeals presented. Thus, it was a significant accomplishment just to have the case heard by the Justices.
In March of this year, Mr. Hartman presented argument for the client before the seven Justices of the Court. The City’s defenses included that (a) they can legally vote in secret and (b) because of the passage of time, the case was moot.
The Ohio Coalition for Open Government, The Ohio Association of Broadcasters, and the Reporters Committee for Freedom of the Press filed an excellent amicus brief in the case.
Today’s 7-0 decision held — something that seemed simple to this firm and our client — that it is not possible to comply with the mandate that Ohio meetings of public bodies be open, without deliberations and votes being in public as well. They also quickly dispatched of the mootness argument. It is a short and well-reasoned decision that firmly decides this this issue that otherwise was of first impression before the Court.
The message for public bodies in Ohio by a series of decisions of the Ohio Supreme Court is that they mean business about openness in Ohio government. They have ruled against public bodies trying to do end-arounds to evade Ohio’s openness requirement through deliberations by e-mails and a series of round-robin or revolving door meeting of fewer than a majority of the body.
We appreciate the firmness expressed by Justice DeWine and a unanimous Ohio Supreme Court demanding openness from all of Ohio’s governmental bodies. The message should now be unmistakable for elected and appointed bodies desiring to conduct their work in secrecy.
The experience also shines a bright spotlight on the sophistication and persistence of Finney Law Firm’s litigators in the strategy, briefing and argument of this case beyond defeats at the trial court and the court of appeals. The trial and appellate practice team we have assembled can be used to help “Make a Difference” for your own litigation challenges.
It has been an honor to represent our client Pat Meade in this important case.
We’ve seen to over and over again, individual lenders “conned” by a borrower into making a supposedly secured loan, but in fact the same borrower has “pledged” the same collateral to multiple lenders for duplicate loans. That means, of course, when it comes time to pay the money back, there is not enough cash to go around to the various lenders and someone is left holding the bag (or everyone is left holding the bag).
This blog entry explains the scam, and tells our readers how to carefully avoid it.
Here’s how the scam works: The borrower has control of an asset. It might be a piece of real estate or a business. Using that asset, he is able to convince the lender of his “bona fides.”
The borrower says: “If I had enough cash, I could complete the improvements on this property, and repay you your money with a good rate of interest.” Or, “if I had enough money, I could stock the shelves of this business, sell more inventory, and pay you a good return on your loaned funds.”
Wanting to help the fraudster, or, more likely, motivated by the greed of an above-market rate or return, the lender lends money.
But either trusting the borrower or trying to save money on legal fees and other expenses like an appraisal, the individual lender advances the cash in anticipation of great rewards when the property sells or the inventory turns, but the lender fails to properly document and secure his loan.
Because nothing is recorded in terms of a security interest from the first lender, the borrower then goes to a second, a third and a fourth lender, promising the same high returns, and showing unsecured business assets (real estate, inventory, accounts receivable) as assets to stand behind the obligation. These subsequent lenders are similarly fooled.
I once had an investor from Chicago. He was lured in to a scheme whereby his Cincinnati borrower was purchasing single family homes, and supposedly renovating them with the investor’s cash. For simplicity and to save legal fees, the investor did not get a mortgage against the real estate and did not come to Cincinnati to check on the progress of the improvements. He simply trusted what the Cincinnati borrower was telling him, and relied upon some phony cell phone photographs of the progress on the improvements. And he wrote check after check after check to the borrower.
What was really happening was that the local borrower was taking my client’s cash for the purchase and improvement of property, but (a) the borrower was not in fact completing the improvements and (b) he had pledged the proceeds from the same properties to three other lenders.
The result of these scams is entirely predictable: eventually the lenders want to be repaid, usually when the real property sells, the inventory “turns,” or the business is supposed to become profitable.
And each of the multiple lenders wants their cash more or less simultaneously.
Of course, there is no cash to pay these various lenders, or perhaps even one of them. The lenders are left holding the bag.
Sure, the lenders can try to recover their investment through either litigation or — more likely — bankruptcy court. But in all likelihood the borrower has no assets and the process will be a big, expensive mess.
We were recently reminded of this scam by this article from the Los Angeles Times. There, a scammer conned “thousands of investors” out of more than $1.3 billion in a more complicated version of the same scam.
One wonders why someone did not ask for proper documentation and a first mortgage position in these supposed real estate investments and why someone did not blow the whistle on this guy earlier. Of course, folks still are asking the same question about Bernie Madoff
First, “neither a borrower nor lender be” /1/ is not a bad admonition for individuals with cash to loan. The lure of high rates of return may not be — likely are not — worth the risk. Banks are in the business of lending money — and collecting it back. And they are pretty good at it: Assessing the risk, securing the asset, obtaining guarantors for debt, assuring a proper down payment. These folks have actuaries who assess the risk of certain kinds of lending and have the experience to avoid pitfalls that amateurs make.
Thus, as a general rule, if a borrower needs to borrow funds, tell him to go to a bank, which can spread the risk among many loans, assess the risks make prudent lending decision, and require appropriate down payments, guarantees, and security. They also know to check for pre-existing liens and to properly document each loan. They also don’t tolerate excuses for late payments that private lenders might. They do this for a living.
But if you feel you must lend privately (or simply elect to do so), here are some pointers:
Using these techniques, a private lender can avoid the “multiple lenders” scam, and or at least — among all the others — be properly documented and secured in a first lien position against assets to pay the indebtedness.
Our firm knows each of these methods and can help you implement them properly them.
You have worked hard and invested carefully to accumulate the assets you have. But others don’t have that same success, that same diligence and that same honesty. There are millions of fraudsters out there glad to take your cash today on the promise of paying you tomorrow. And they have neither the intention or the ability to fulfill that promise.
Use a Finney Law Firm transactional attorney — Isaac Heintz (513-943-6654), Eli Kraft-Jacobs (513-797-2853), Rick Turner (513-943-5661), Chris Finney (513-943-6655) or Kevin Hopper (513-943-6650) — to make certain that you are properly secured in for the money you are lending.
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/1/ From the web site “LiteraryDevices.Net“:
This is a line spoken by Polonius in Act-I, Scene-III of William Shakespeare’s play, Hamlet. The character Polonius counsels his son Laertes before he embarks on his visit to Paris. He says, “Neither a borrower nor a lender be; / For loan oft loses both itself and friend.”
It means do not lend or borrow money from a friend, because if you do so, you will lose both your friend and your money. If you lend, he will avoid paying back, and if you borrow you will fall out of your savings, as you turn into a spendthrift, and face humiliation.
It”s amazing this same advice applies more than 400 years after this noted author’s death.
In our relentless drive to provide value to clients in commercial litigation, one immeasurably painful exercise is convincing opposing counsel and adverse parties to comply with the civil rules in producing discovery responses in a timely fashion.
In one case our firm has underway at present, we have granted two 30-day extensions of time to respond to written discovery beyond the 30-days the civil rules provide, and beyond that opposing counsel is still 10 more days late. Opposing counsel — despite repeated promises — has refused to provide a single responsive document or answer. We thus filed a motion to compel.
His response, in part, contained the following:
Yes, he actually told the Court that he feared “the risks associated with”… “miss[ing] a significant portion of his wife’s birthday party,” after already having had more than 100 days to respond to written discovery.
It’s such a joy to argue these motions. It’s sublimely absurd.
Unless you live under a mossy rock, last week you read or saw that the Finney Law Firm won a swift and important victory for our clients in an important civil rights case.
At 10 PM Monday night, our firm filed a lawsuit exposing the unlawful handcuffing, arrest and search of a black Realtor and his homebuyer by nine police officers responding to a caller falsely claiming a breaking and entering at a home for sale in Price Hill.
At the same time as the filing, Channel 19 broke the story with a detailed newscast using body cam videos from the officers showing guns drawn, handcuffing for a protracted 4-5 minutes, and an illegal search of the innocent pair. The house was for sale and had a “for sale” sign in the yard and a lockbox providing keyed access to the home. The Realtor properly had made an appointment for the showing and legally made entry into the home via the key provided.
Our clients, Realtor Jerry Isham and his home buyer Tony Edwards, entrusted the important case to our firm.
In addition to the constitutional violations by the responding police officers, the City had illegally destroyed seven of the body camera videos months after our firm formally requested them, in itself actionable in a law suit.
At 2:30 PM the following day, fewer than 16 hours and 30 minutes after the filing of the suit, the City settled the case for 100% of the demand of the clients, including police and Realtor training seminars on police interaction on home sales.
In this instance, the Finney Law Firm provided swift and full justice for the Plaintiffs, but also sent a message into the community about respect for the constitutional rights of African American citizens engaged in entirely lawful behavior.
You may see the Channel 19 story here and read about the settlement in the Enquirer here.
In addition to our appreciation to our clients for entrusting our firm with this case, we also thank the City Solicitor’s office and Mayor Cranley for their leadership in quickly recognizing the legitimacy of the claims and settling them.
Tonight, Channel 19 has a well-researched story by Jennifer Edwards Baker of our clients, Jerry Isham — Realtor — and his buyer Tony Edwards, innocently looking at a house in West Price Hill for possible sale, when they were rousted by eight Cincinnati Police Officers with guns drawn. The police then illegally detained and handcuffed the pair, and illegally searched Mr. Isham’s pockets.
They had done absolutely nothing illegal; they had done absolutely nothing wrong.
It’s truly as if CPD officers have received no training on the constitutional limit on the exercise of their their policy powers.
Incidentally, CPD illegally destroyed seven of the body cam and dash cam videos of the incident after they were subject to a formal public records request from the City.
Read the Ch. 19 story here: Lawsuit: Realtor, prospective home buyer illegally detained by CPD after retired cop calls 911.
The Fox 19 video story is here.
For more information, call Chris Finney at 513-720-2996.
In May, Finney Law Firm notched its fourth in a series of wins in class actions against point-of-sale inspection ordinances in Ohio and Kentucky. Previous judgments or settlements have been achieved against Covington, Kentucky, Oakwood, Ohio and Portsmouth, Ohio. Each Ohio case was co-counseled with attorney Maurice Thompson and the non-profit law firm the 1851 Center for Constitutional Law.
It seems to have become a trend for municipalities to enact ordinances that mandate municipal inspections of rental properties (interior and exterior) either before a new tenant moves in or annually and pre-sale. Very simply, all of these ordinances are unconstitutional searches of property under the Fourth Amendment to the United States Constitution.
Maurice Thompson of the 1851 Center has proficiently developed and pursued this line of cases and the legal theory underlying each case.
Our suits have succeeded in each instance in obtaining injunctive relief against the impermissible enactment, and the class action recovers the illegally-obtained inspection fees for the property owners affected.
For more information on our public interest litigation practice, contact Christopher P. Finney at 513-943-6655.