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:

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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

Land Installment Contracts: An Overview

What is a land installment contract?

A land installment contract (also known as a land contract, a contract for deed or an installment sale agreement) is a contract between a seller and a buyer regarding real property in which the seller provides financing to the buyer at an agreed-upon price and other terms, and the buyer makes payments in regular installments. Under such contracts the  seller retains title to the property until payment is full is received, but the buyer takes possession of the property.

 

Why use a land contract?

 

Land installment contracts are used by buyers and sellers for many reasons but some of the common reasons are:

 

• Buyer lacks sufficient down payment—short-term seller financing is provided with a large balloon payment at the end, with payments during term designed to provide for sufficient equity at the end allowing buyer to qualify at the end for conventional mortgage financing;
• Buyer doesn’t qualify for conventional financing due to bad credit;
• Seller wants to close quickly and there is not sufficient time for a buyer to arrange for traditional mortgage financing; or
• Purchase price of the real property is so low that the costs associated with conventional financing doesn’t make sense.

 

What provisions must be included in a land contract?

 

Land installment contracts are subject to Chapter 5313 of the Ohio Revised Code. Section 5313.02 requires that every land contract must be executed in duplicate with each of buyer and seller receiving an original copy.  Section 5313.02 also lists a minimum of 16 provisions that must be included in a land installment contract. Besides the obvious inclusion of the identity of the parties, a legal description of the property and all of the economic terms, the contract must (i) disclose any encumbrances on the property, such as a current mortgage lien, and any pending order of a public agency against the property, (ii) require the seller to record a copy of the contract, and (iii) unless the buyer and seller expressly agree otherwise, require the buyer to pay the taxes, assessments and other charges assessed against the property from the date of the contract.

 

What are limitations or responsibilities are placed on a seller?

 

A seller cannot hold a mortgage on the property that exceeds the purchase price under the installment contract unless the mortgage covers more property than that sold to the buyer under the contract. If the latter is the case, the seller must disclose to the seller the amount of that mortgage and the release price, if any, that is attributable to the property that is subject to the contract.

 

Within 20 days after a land installment contract has been signed by the buyer and seller, the seller must cause a copy of the contract to be recorded and deliver a copy to the county auditor where the property is located. The installment contract must also conform to all legal formalities required by law for deeds and mortgages.

 

At least once a year (or, on demand of the buyer, no more often than twice each year), a seller must furnish a statement to the buyer that shows the amount credited to principal and interest based on buyer’s payments during that year and the balance due under the contract.

What happens if the buyer defaults?

 

Section 5313.05 of the Revised Code provides that a buyer’s interest may be forfeited under the contract only after the expiration of a 30 day cure period. After expiration of this 30 day period a seller can proceed to serve a notice on the buyer as described in Section 5313.06. 

 

If a contract has been in effect less than 5 years, and a buyer has paid less than 20% of the purchase price, then, in addition to any other remedies permitted under the law, a seller may bring an action for forfeiture of buyer’s rights in the contract and request restitution of the property under Chapter 1923 of the Revised Code.

 

However, if a contract has been in effect for 5 years or more, or a buyer has paid an amount equal to or greater than 20% of the total purchase price, then a seller may only recover possession of the property by initiating a foreclosure proceeding.

 

Terminating the land contract by forfeiture or foreclosure is a seller’s only remedy, subject to limited exceptions when a buyer has paid less than the fair rental value plus deterioration or destruction of the property caused by seller.  In such cases, a seller may also recover the difference between what seller paid on the contract and the fair rental value of the property plus an amount for the deterioration or destruction of the property causes by such seller’s use.

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