Several Ohio Counties Extend Real Estate Tax Due Date


By: Stephen D. Richman, Esq.-Senior Counsel-Kohrman, Jackson & Krantz
Real Estate taxes in Ohio are collected six months in arrears. This means that real estate taxes and assessments for the 2nd ½ 2019 will be due after the first half of 2020. Most counties in Ohio would ordinarily collect the 2nd ½  payment between mid-June and mid-July.

However, to provide additional relief to taxpayers (residential and commercial) as a result of COVID-19, many Ohio Counties have extended their second ½ 2019 due dates. The Cuyahoga County 2019 Second Half Real Estate tax deadline, for example has been extended to August 13, 2020. Tax bills are expected to be in hand approximately 20 days prior to the deadline, per state law. Cuyahoga County Taxpayers are encouraged to use regular mail, the county drop boxes at the County Administrative Headquarters and North Olmsted Auto Title, and online resources to make their payments. For more information, click on: https://treasurer.cuyahogacounty.us/.
In an effort to assist Franklin County Residents through the challenges of the COVID-19 Pandemic, the Franklin County Treasurer’s and Auditor’s Office have moved the due date for their 2nd half real estate property tax collection 45 days from June 22, 2020 to August 5, 2020. For more information regarding Franklin County due dates and payment plans, see: https://treasurer.franklincountyohio.gov/About/PropertyTaxDueDate.
The Second Half 2019 Hamilton County Real Estate Tax Bills have been extended  until July 17, 2020. For more information regarding Hamilton County real estate taxes, see: https://www.hamiltoncountyohio.gov/government/departments/treasurer.

Other counties have not modified their due dates, but are offering installment payment plans.

For example, Summit County’s Tax Installment Payment (T.I.P.) Plan will be available to property owners who are unable to make payment for second half 2019 real estate taxes due in July. Enrollment in T.I.P. can help property owners avoid late payment penalties.
The program was previously offered only to owners of residential, owner-occupied property. On April 27, 2020, Summit County Fiscal Officer Scalise lifted the occupancy requirement and expanded eligibility to rental properties, agricultural properties, commercial parcels, and manufactured homes. For more information or to establish a payment plan, email summittreas@summitoh.net; or, application forms can be downloaded from their website at https://FiscalOffice.summitoh.net.
To find out if your county has an extended tax due date, payment plan or other relief, contact your county treasurer or fiscal officer. For a directory of Ohio county treasurers, see: .http://www.ohiocountytreasurers.org/aws/CTAO/pt/sp/layout_directory?get_content_from_session=1.

Who Is the “Prevailing Party” When Awarding Attorneys’ Fees in Multiple Count, Landlord-Tenant Litigation?



(Watch your Language [with Attorneys’ Fees Provisions] & Say What You Mean, Precisely or a Judge Will Tell You What You Meant #14)

By: Stephen D. Richman, Esq.-Senior Counsel-Kohrman, Jackson & Krantz

Watch Your Language. As established in other “Watch Your Language” articles for this Blog, as a general rule, courts will uphold language in commercial agreements, unless it is contrary to statutory law or public policy. They traditionally presume that commercial parties are on more of an equal playing field and are more sophisticated concerning commercial transactions (such as commercial real estate deals), since both parties will usually have attorneys to review their documents. Because of this judicial deference to commercial language, you must, “say what you mean, precisely, or a judge will decide what you meant.” Failure to follow this axiom left the landlord in Simbo Properties, Inc. v. M8 Realty, LLC, 2019-Ohio-3091 (8th Dist. Ct. of Appeals, Cuyahoga County) with a bill for its tenant’s attorneys’ fees in excess of the landlord’s claims for damages.

Attorneys’ Fees in General.  Ohio courts follow the so-called “American Rule,” which requires that each party involved in litigation pay his or her own attorneys’ fees.  There are, however three well-recognized exceptions to this rule: (1) where statutory provisions specifically provide that a prevailing party may recover attorneys’ fees; (2) where there has been a finding of bad faith; and (3) where the contract between the parties provides for it (sometimes referred to as “fee shifting”).

So called fee shifting or attorneys’ fees provisions are often drafted in general terms, with the parties assuming that their intent is clear. Frequent language calls for “reasonable attorneys’ fees to be awarded to the prevailing party.” Who is the prevailing party, however, when there are multiple counts, with one party prevailing on some counts and the other party prevailing on others? Does an award of “reasonable” fees mean that a prevailing party on one count is only entitled to fees related to that one count? The relatively recent case of Simbo Properties, Inc. v. M8 Realty, LLC reinforces the need to be specific and leave as little as possible to “interpretive chance.”

Simbo Properties, Inc. v. M8 Realty, LLC – (The Facts). The facts of the “Simbo” case are simple enough (the law, not so much). In December, 2012, Simbo Properties, Inc. (“Simbo”) and M8 Realty, LLC (“M8”) entered into a written lease pursuant to which Simbo leased commercial real property to M8.    The initial term of their lease agreement was for eighteen (18) months.   Simbo claimed that M8 violated several provisions of the lease resulting in the filing by Simbo of a lawsuit in the Cuyahoga County Court of Common Pleas (“trial court”).  Simbo filed a four-count complaint against M8 seeking the following:  Count 1 — rent (in excess of $150,000); Count 2 — real estate taxes ($32,158.34); Count 3 — property damage (in excess of $30,000 for flag pole and storm sewer damage); and Count 4 — breach of other pertinent lease provisions. M8 filed a counterclaim for damages claimed by M8. In pre-trial motions, M8 prevailed on Count 4 by virtue of the trial court granting M8’s motion for summary judgement. Of the remaining issues before the trial court, Simbo prevailed on Count 2, on part of Count 3 and on M8’s counterclaim. M8 prevailed upon Count 1 and part of Count 3.

After the judgement was rendered, both parties filed post-trial motions, including claims for attorneys’ fees.  Simbo and M8 based their claims for attorneys’ fees on the fact that they each prevailed upon at least part of the litigation, and their lease agreement contained a fee shifting  provision directing legal fees be awarded to the prevailing party of a lawsuit. Specifically, Section 37 of the Simbo/M8 lease agreement provides:  “If a lawsuit is filed with respect to this Lease, the prevailing party shall be entitled to collect all reasonable attorneys’ fees and costs.”

On the issue of the award of attorneys’ fees under the lease, the trial court determined that M8 was the “prevailing party” since it won the “main issue” in the lawsuit (Count 1) and, as a result was entitled to all of its attorneys’ fees, as provided in the lease agreement.

Simbo then filed an appeal of the $238,335.73 award of attorneys’ fees and expenses to M8 and also challenged other aspects of the trial court’s rulings. Simbo argued that since it prevailed on two counts of the complaint and M8’s counterclaim, it should be considered the “prevailing party”
under the lease agreement’s fee-shifting provision. 

Simbo Properties, Inc. v. M8 Realty, LLC – (Case Analysis). On appeal, the 8th District Court of Appeals first acknowledged that there were complications inherent in the trial court’s attorneys’ fees award because:  (1) the term “prevailing party” was not defined within the lease agreement; and (2) a determination of whether Simbo or M8 is the “prevailing party” was also complicated by a jury verdict in favor of both parties.

Nonetheless, the 8th District Court of Appeals in Simbo easily resolved the complications by virtue of precedent (prior court rulings on point) established in the 10th District Court of Appeals case, EAC Properties LLC v Brightwell (2014-Ohio-2078). EAC Properties was a landlord-tenant case on similar facts as Simbo, whereby the landlord (EAC Properties) brought suit against its tenant, Brightwell re: $30,000 of unpaid, additional rent (deemed the “primary claim” by the EAC court because it was the largest dollar amount claimed) and $3,000 of unpaid utilities. The court in EAC Properties determined that the landlord’s primary claim for additional rent failed, and because the landlord did not prevail on that primary issue, it was not entitled to collect any attorneys’ fees under the lease agreement.

Applying what it termed EAC’s’ “main issue standard,” the court of appeals in Simbo easily determined M8 to be the “prevailing party” because it received a jury verdict on the main issue of the case; the count (Count 1) that represented the largest dollar amount, as well as being the count that counsel for M8 spent the largest percentage of time defending.

The court in Simbo did acknowledge that there is a “some relief” (vs “main issue”) standard that has been applied to define a “prevailing party” in connection with statutory claims for attorneys’ fees such as is authorized in consumer protection and civil rights laws. However, the Simbo court did not find the “some relief standard” applicable in a contractual case like Simbo, reasoning that “While public policy in consumer protection and civil rights litigation supports a broader interpretation of ‘prevailing party’, no similar need exists in negotiated commercial fee-shifting clauses between sophisticated parties… represented by counsel[who] knowingly and willingly negotiated a commercial lease agreement.”

As if to reinforce our moral of the story below, the court of appeals in Simbo also reasoned that: “If the parties had desired to define “prevailing party,” e.g., as the party that prevails on the most counts in the litigation, Simbo and M8 could have drafted that provision into the lease… or [could have] defined the term “prevailing party,” but chose not to do so.  [Accordingly], we must follow the intent of the parties and apply the terms of the lease agreement.” In other words, the parties did not say what they meant, precisely, so the judge told them what they meant.

Since the court of appeals in Simbo determined that the parties intended to define “prevailing party” as the party that prevailed upon the main issue of the case, then such party should only be able to collect its attorneys’ fees with respect to the main issue. Right? That was the landlord’s argument. Simbo argued that M8 should recover only those attorneys’ fees attributable to Count 1, the count on which M8 prevailed at the trial court.  The court of appeals in Simbo, however upheld the trial court’s award of M8’s total legal fees incurred with respect to all of the counts of the litigation, including the counts the landlord prevailed upon. The Simbo court explained that claims that involve common facts or legal theories are too difficult to divide as to the time and hours spent on litigating the individual claims.  Accordingly, the court of appeals in Simbo held that “[W]here multiple claims are rooted in the same allegations, facts, discovery, and legal arguments, a trial court does not abuse its discretion in awarding attorney fees for the time spent on [all of] the claims.”

What is the moral of this story? Say what you mean, precisely, or a judge will tell you what you meant.” Clearly, the landlord in Simbo did not intend to pay more in legal fees than it had in claims, especially when it prevailed on some of those claims. Nevertheless, since there was no definition of “prevailing party” in the lease, the court, in effect found one. 

Listen to what judges are saying with regard to interpreting leases and other commercial contracts: “When the language of a written contract is clear, a court may look no further than the writing itself to find the intent of the parties” [So, be clear]. Define “prevailing party” in commercial fee shifting provisions; define “reasonable fees” or consider a “floor” or “ceiling.” Also, be clear as to whether or not your intent is to be reimbursed for legal fees after a default, whether or not it ends up in litigation.

In other words, the “well-known and established principle of contract interpretation is that [c]ontracts are to be interpreted so as to carry out the intent of the parties, as that intent is evidenced or not evidenced by the contract language” [So, evidence your intent in your documents].


Ohio’s New Notary Law Definitely Worth Noting


By: Stephen D. Richman, Esq., Senior Counsel-Kohrman, Jackson & Krantz
Effective last Friday, September 20, 2019, a new law (Ohio Senate Bill 263, the Notary Public Modernization Act) went into effect which makes significant changes for Ohio Notaries Public and those who wish to become Notaries. While some may not assign preeminent importance to “notary law”, the Ohio State Bar Association adds notable perspective by stating, “the bill ensures consistent standards across the state and provides for the training and support they need to confidently and accurately witness and authenticate all the affidavits and oaths, property titles, grants, deeds, contracts, adoptions, advanced directives and powers of attorney — the documents, which represent the most important transactions in our lives and for our economy.”  
Key provisions of SB 263 include the following changes to Ohio Notary law:
1.      Who is in Charge? The Ohio Secretary of State’s office is now in charge and the place to go for anyone applying for a new Notary commission or seeking to renew their commission. Previously, Ohio’s county courts of common pleas governed the process. 
2.      Non-attorney applicants for new Ohio Notary commissions will be required to obtain a criminal records check, complete a three hour education program and take/pass a test. Those seeking to renew will need a new (not more than six months old) criminal records check and need to complete a one hour “refresher” educational program.

3.      New attorney applicants will be required to complete a three hour training program, but will not be required to obtain a criminal records check or take a test.

4.       New Fees. Ohio Notaries may now charge up to: (i) $5 for an in-person, paper notarization; (ii) $10 for electronic notarizations that are not performed online; and (iii) $25 for a remote, online notarization.

5.      “New” Forms/Rules.

a)      Jurats. (where one swears to or affirms the truthfulness of the contents of a document). For jurats, the new law includes a new statutory jurat form; or, you can still draft your own, provided, however that it clearly states that an oath or affirmation was administered.

b)      Acknowledgements. (verify the identity of the signer and confirm that the signer signed a document). For acknowledgements, you can use the “statutory short forms of acknowledgment” in the existing statute, or, you can create your own, but the new law requires that the acknowledgement: 1) contain the words “acknowledged before me” or their substantial equivalent; and 2) clearly state that an oath or affirmation was not administered.

6.      Online Notaries. Anyone who is a commissioned Ohio Notary may apply to be an online Notary. To become authorized you must: 1) Successfully complete a two hour education program; 2) pass a test; 3) pay an authorized provider a fee of $250; and 4) submit an application to the Secretary of State and pay an application fee of $20.

The Ohio Society of Notaries (http://ohionotaries.org/) has been approved by the Secretary of State as an Authorized Provider of Training & Testing under the new law. To find out more about their training offerings, or to get answers to your questions about notary procedures, signing situations, or best practices; you can call their free helplines at (614) 336-7878, (614) 348-3305, or Email them.




Boilerplate Language Upheld in Ohio Storage Lease


By: Stephen D. Richman, Esq.-Senior Counsel-Kohrman, Jackson & Krantz


boil•er•plate (boi l r-pl t ) n.

1. A steel plate used in making the shells of steam boilers.
2. Inconsequential, formulaic, or stereotypical language: The new provisions of the lease renewal were merely boilerplate.

The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved

The first type of “boilerplate” defined above is pretty tough stuff. It can be up to twelve (12) inches thick and stop arrows, Greek fire and low caliber ammunition. Tough, one-sided contract and lease language is also referred to by many as “boilerplate”. What is amazing to me is how many tenants, landlords, brokers and dictionary writers believe such language is inconsequential or unenforceable, and how many do not worry about such language because they deem it “merely boilerplate.”

Notwithstanding the above definition, this author would like to caution you to worry, if you ever find yourself on the “wrong side of the boilerplate.” Contrary to “Mr. Heritage’s” beliefs, odds are that boilerplate (at least in a commercial lease/contract) will most likely be enforceable unless it is contrary to statutory law or public policy. Judges assume (rightly or wrongly) that commercial tenants and landlords are on equal footing with equal sophistication in business and lease matters. They believe commercial parties say what they mean and mean what they say in their contracts. Ohio court decisions regarding commercial leases are replete with language like the following: “when reviewing lease provisions, a court is to presume that the intent of the parties is in the language they used, and if the contract is clear and unambiguous, then we must follow the contract’s expressed terms and must not go beyond the plain language of the contract.” Langfan v. Carlton Gardens, 2009 Ohio App. LEXIS 2863. Accordingly, self-help provisions, landlord disclaimers of the duty to mitigate damages, warrants of attorney to confess judgement and disclaimers of warranties are just a few examples of boilerplate language upheld in commercial leases in Ohio.

The primary exception to the general enforceability of boilerplate language in Ohio is Ohio’s Landlord-Tenant Act (ORC Chapter 5301 et. seq.), which governs Ohio residential leases. Specifically, Section 5321.13 (d) of such Act provides that
 “No agreement by a tenant to the exculpation or limitation of any liability of the landlord arising under law or to indemnify the landlord for that liability or its related costs shall be recognized in any rental agreement or in any other agreement between a landlord and tenant.” Awards of attorney fees and warrants of attorney to confess judgment are also prohibited in residential leases. The Ohio Landlord-Tenant Act was enacted to protect residential tenants who are often in an unequal bargaining position from their landlords, and have a lot more to lose (e.g., their homes).

What about boilerplate language in storage unit leases? Often, such units are utilized to store beds, refrigerators and other furniture and appliances typically found in a residence. Do storage unit tenants have the same protection residential tenants have?

What if such boilerplate language in a storage unit lease goes so far as 1) disclaiming landlord liability (for patent and latent defects, failure  to repair and express and implied warranties); 2) imposing minimal, liquidated damages; and 3) requiring the tenant to indemnify landlord? That’s just inconsequential boilerplate, right Mr. Heritage? 


Not according to the Tenth District Court of Appeals in the recent case of Hopkins v. Car Go Self Storage,2019-Ohio-1793.

In Hopkins, the tenant-appellant entered into a lease agreement with appellee, “Car Go Self Storage” to store her personal belongings, including furniture, in appellee’s storage facility. Appellant testified in court that the facility was dry when the items were moved in, but when such items were retrieved, they were damp and covered with mold. Apparently there was a water leak that allowed water into the unit, causing the mold. Appellant sued appellee for breach of contract, negligence and conversion. The trial court held for appellee on all counts, and appellant appealed.

The court of appeals in Hopkins affirmed the decision of the trial court. The appellate court held that the negligence claim was properly dismissed because it was barred by the two-year statute of limitations. The conversion claim was properly dismissed because appellant admitted she was not prevented from recovering her property.

Regarding the contract claim, appellant claimed that her contract contained an implied warranty that the unit was fit and habitable for storage of property, and that such warranty was breached by the landlord. The 10th District Court of Appeals apparently agreed with appellant that the elements establishing an implied warranty had been met. However, according to the court, such warranty was disclaimed by the landlord’s exculpatory clause that included a broad, but unambiguous release of liability for damage to property; and a clear, express waiver of implied warranties. Citing precedent (similar cases on point), the court in Hopkins simply applied the “general rule,” namely, that “exculpatory causes in lease agreements are generally valid absent a showing of ambiguity or unconscionability” and “if the court can determine intent from the plain [albeit exculpatory] language of the contract, then the court must apply that language as written and refrain from further contract interpretation.”

It is important to note that the Hopkins court did not preclude future challenges to a  storage lease, as unconscionable. Since appellant did not challenge her lease as unconscionability, however, the court in Hopkins simply concluded that “the court cannot address an argument that was not raised.”

So, what is the moral of this story? All language in a  lease is of consequence; boilerplate or not. The best weapon against boilerplate language is the delete key. Negotiate away boilerplate language before signing the lease. Afterwards, odds are you will be no more successful shooting holes through boilerplate language in court, as you would be shooting holes through the 12- inch- thick steel kind of boilerplate.


Recent Real Estate Legislation Introduced in the Ohio Legislature (133rd General Assembly)



By: Stephen D. Richman, Esq.- Senior Counsel-Kohrman, Jackson & Krantz


Recent bills of the 133rd General Assembly (See https://www.legislature.ohio.gov/) pending in the Ohio House and Ohio Senate related to real property include the following:
---------------------------------------------------------------------------------------------------------------------
Senate Bill 8

General Assembly: 133

Short Title: Authorize tax credit for investment in opportunity zone.  

Long Title: To amend Sections 107.036, 122.86, 5747.02, and 5747.98 and to enact Section 122.84 of the Revised Code to authorize a tax credit for investments in an Ohio Opportunity Zone.

Primary Sponsor: Senator Kirk Schuring-District 29 

Version/Status: Passed by Senate-4-3-19; Referred to House Workforce and Economic Development Committee-4-16-19

Legislation Text: View Current Version

 

House Bill 20

General Assembly: 133

Short Title: Prohibit homeowner associations placing limits on solar panels.  

Long Title: To enact Sections 5301.073 and 5311.192 of the Revised Code to prohibit condominium, homeowners, and neighborhood associations from imposing unreasonable limitations on the installation of solar collector systems on the roof or exterior walls of improvements.

Primary Sponsor: Rep. Louis W. Blessing III-District 29

Version/Status: Referred to State and Local Government Committee-2-13-19

Legislation Text: View Current Version


Senate Bill 36

General Assembly: 133

Short Title: Prescribe valuation of certain rental property for tax purposes.  

Long Title: To amend Sections 5713.03 and 5715.01 of the Revised Code to prescribe how federally subsidized residential rental property must be valued for property tax purposes.

Primary Sponsor: Senator Matt Huffman-District 12 

Version/Status: Referred to Ways and Means Committee-2-20-19

Legislation Text: View Current Version


House Bill 47

General Assembly: 133

Short Title: Revise time to decide property tax complaint; rename Legal Assistance. 

Long Title: To amend Section 5715.19 of the Revised Code to increase the time within which property tax complaints must be decided.                                                                                                               Primary Sponsor: Rep. Dave Greenspan-District 16

Version/Status: Referred to Ways and Means Comm.-2-13-2019; reported/amended-5-1-19                                            

Legislation Text: View Current Version


Senate Bill 96

General Assembly: 133

Short Title: Grant Cleveland Housing Ct-review of health/safety code cases.

Long Title: To amend Section 1901.181 of the Revised Code to grant the

Cleveland Housing Court jurisdiction in any review or appeal of a final order of an

administrative body that relates to a local building, health, or safety code

Primary Sponsors: Senator Matt Dolan-District 24 and Senator Kenny Yuko-District 25

Version/Status:  Referred to Local Govt., Public Safety and Veteran’s Affairs Committee-3-12-19

Legislation Text: View Current Version

 

House Bill 99

General Assembly: 133

Short Title: Revise homestead exemption income eligibility and tax reduction.

Long Title: To amend Sections 323.152 and 4503.065 of the Revised Code to raise the homestead exemption income eligibility to $60,000 and increase the tax reduction.

Primary Sponsors: Rep. Jack Cera-District 96 and Rep. John M. Rogers-District 60

Version/Status: Referred to Ways and Means Committee-3-5-2019

Legislation Text: View Current Version

 

House Bill 103

General Assembly: 133

Short Title: Change law relating to land installment contracts.

Long Title: To amend Sections 1343.01, 3781.10, 5313.02, and 5313.04 and to enact Sections 5313.021, 5313.022, 5313.031, and 5313.12 of the Revised Code to make changes to the law relating to land installment contracts.

Primary Sponsors: Rep. Michele Lepore-Hagan-District 58 and Rep. Don Manning-District 59

Version/Status:  Referred to Civil Justice Committee-3-5-19

Legislation Text: View Current Version


Senate Bill 139

General Assembly: 133

Short Title: Enact First-time Home Buyer Savings Act-allow tax deductions

Long Title: To amend Section 5747.01 and to enact Sections 193.01, 193.02, 193.03, 193.04, 193.05, 193.06, and 193.07 of the Revised Code to enact the First-time Home Buyer Savings Act, authorizing income tax deductions for contributions to and earnings on savings accounts designated for the purchase of a home.

Primary Sponsors: Senator Theresa Gavarone-District 2 and Senator Bob Peterson-District 19

Version/Status: Introduced 4-30-19

Legislation Text: View Current Version.                                          


House Bill 149

General Assembly: 133

Short Title: Enact Affordable Homebuilding and Housing Act.

Long Title: To enact Section 5709.51 of the Revised Code to enact the "Affordable Homebuilding and Housing Act" to temporarily exempt from property tax the increased value of land subdivided for residential development.

Primary Sponsor: Rep. Derek Merrin-District 47

Version/Status:  Referred to Economic and Workforce Development Committee-3-26-19

Legislation Text: View Current Version

  
House Bill 199

General Assembly: 133

Short Title: Licenses commercial roofing contractors.

Long Title: To amend Sections 715.27, 3781.102, 4740.01, 4740.02, 4740.04, 4740.12, and 4764.03 of the Revised Code to require commercial roofing contractors to have a license.

Primary Sponsor: Rep.Thomas F. Patton-District 7

Version/Status:  Referred to Commerce and Labor Committee-4-30-19

Legislation Text: View Current Version

House Bill 209

General Assembly: 133

Short Title: Abolish estate by dower.

Long Title: To amend Sections 2103.02, 2103.09, and 2106.24 of the Revised Code to abolish the estate by dower.

Primary Sponsors: Rep. Sara Carruthers-District 50 and Rep. Darrell Kick-District 70

Version/Status: Referred to Civil Justice Committee-4-30-2019

Legislation Text: View Current Version


House Bill 229

General Assembly: 133

Short Title: Prohibit discrimination in rental housing based on income.

Long Title: To amend Sections 4112.01 and 4112.02 of the Revised

Code to prohibit discrimination in rental housing based on lawful source of income. 

Primary Sponsors: Rep. Terrence Upchurch-District 10 and Rep. Adam Miller-District 17

Version/Status: Introduced in House-4-30-2019

Legislation Text: View Current Version