Correctly Describing the Property in your Transaction

Ohio’s Sixth District Court of Appeals recently affirmed an Order issued by the Ottawa County Court of Common Pleas granting summary judgment in favor of a lender.  See Nationstar Mtge., LLC v. Cody, 6^th Dist. Ottawa Case No. OT-18-041, 2020-Ohio-5553.

In Cody, the borrower received $938,250 in exchange for a mortgage granted on two adjacent parcels located on Put-in-Bay Island.  One parcel contained a residential structure.  The other parcel was mostly vacant, but a portion of a detached garage was located on that “vacant” parcel, along with a private boat dock.   The heirs argued that the legal description contained in the Mortgage listed only the street address of the residential parcel.

The Trial Court granted summary judgment, finding that the Mortgage was unambiguous and should be enforced as to both parcels described in the legal description.  On appeal, the heirs claimed error based on the Trial Court’s refusal to consider the heirs’ testimony about their father’s claimed statements that the Mortgage wasn’t supposed to encumber the vacant lot.  The Appellate Court further found that the legal description included in the Mortgage clearly and unambiguously described both the residential parcel and the vacant parcel, and therefore affirmed the grant of summary judgment in favor of the lender.

The Cody decision nicely illustrates the importance of using a complete and accurate legal description in your transaction and diffusing any ambiguity as to what property is supposed to be transferred and/or encumbered when you prepare any documents for your real estate transactions (ideally starting with the purchase agreement).

To review the Cody Decision, click here.