Groundbreaking Update to Ohio Title Law: Implications of Senate Bill 94

Key insights about the new law taking effect October 24, 2024.

Our subject matter experts have once again led the charge in improving Ohio title law with the recent passage of Senate Bill 94. The new law introduces several key improvements to Ohio’s real estate transaction processes, including the adoption of the most favorable view of mortgage subrogation, enhancements to judgment lien law, and modernization of recording and access to real estate records. In short, Senate Bill 94 will streamline the process of completing real estate transactions in Ohio, and it will allow certain cases involving real estate to be resolved more efficiently. Details about these major changes and their implications for our valued clients in the real estate industry are outlined below.

1. Streamlined Lien Priority Disputes

Senate Bill 94 codifies the most favorable view of mortgage subrogation, providing a clear and consistent legal standard across Ohio. This uniform standard, based on extensive research and best practices from throughout the country, largely eliminates confusion and reduces litigation time frames.

Benefits: Provides a predictable legal environment, reducing costs and risks.

Judgment creditors are now required to include the last known address of the judgment debtor in judgment liens.

Judgment creditors are now required to include the last known address of the judgment debtor in judgment liens.

2. Improved Judgment Lien Process

The new law requires judgment creditors to include the last known address of the judgment debtor in judgment liens. This simple addition helps title agents and parties to real estate transactions accurately determine which liens actually affect a particular parcel of real property, facilitating smoother transactions.

Benefits:
• Title Companies and Agents: Easier identification of which judgment liens actually affect particular real property.
• Attorneys and Lenders: Reduced risk of errors in property transactions.

3. Electronic Recording by June 2026

By June 2026, all Ohio counties must provide mechanisms for electronic recording of real property instruments. The new law provides funding for counties that have not yet been able to offer this resource, and it provides for a “document preservation surcharge” of up to $5 per recorded instrument to cover the costs of future maintenance of those records, to help bring Ohio fully into the 21st century. This change will enable all counties to streamline the recording process and reduce the need for physical document handling.

Benefits:
• Developers, Owners, and Brokers: Faster and more efficient recording.
• County Officials: Streamlined operations and improved document management.

The new law streamlines the recording process and reduces the need for physical documents.

The new law streamlines the recording process and reduces the need for physical documents.

4. Enhanced Electronic Access to Records

Counties must also provide electronic access to property records and indexes dating back to at least January 1, 1980. This change means that most real estate records for most transactions will be accessible online, saving time and effort for all parties involved in property transactions.

Benefits:
• Property Managers and Legal Professionals: Convenient access to real property records.
• Real Estate Professionals: Reduced need for driving and walking to county offices (and parking).

5. Simplified Power of Attorney Processes

Senate Bill 94 introduces a cure mechanism for issues related to the timely recording of powers of attorney. If a power of attorney is executed and acknowledged on the same date as the authorized instrument, it is presumed valid, even if recorded later. This provision simplifies real estate transactions and ensures that valid documents are recognized, reducing delays and disputes.

Benefits:
• All Parties in Real Estate Transactions: Fewer delays, difficulties, and disputes over document validity.
• Legal Professionals: Clearer standards for power of attorney documentation for real estate transactions.

These improvements represent significant steps forward in modernizing Ohio’s real estate laws and processes, and we were happy to have played a key role in the process. Whether you are a developer, owner, broker, lender, or legal professional, these changes will facilitate smoother, more efficient real estate transactions. Omni Title remains committed to ensuring that our clients benefit from the most favorable and up-to-date commercial real estate legal standards.

Contact us for additional information about these changes and how they may affect your transactions and your business.

Acquiring Property By Adverse Possession

An Ohio Court of Appeals recently affirmed a determination that adverse possession had been achieved, even though conflicting testimony was presented on that subject at Trial.  Lloyd v. Newland, 2021-Ohio-2342.

In that case, Lloyd purchased property in 1997 that was adjacent to an overgrown lot owned by Newland.  A couple of months later, Lloyd requested that Newland and her sons clean-up and maintain the Newland property.  Nevertheless, several months later, the Newland property remained overgrown, and so Lloyd cleared it, and began taking care of the Newland property.  According to Lloyd, he then proceeded to mow the grass, built a pitching mound, filled in a valley, and planted a garden – all on the Newland property.

Newland testified that she did not pay much attention to her property, although she noticed that the grass had been cut, but didn’t know by whom.  In October of 2019, Lloyd filed a Complaint, asserting adverse possession of the Newland property.  Lloyd denied ever asking for anyone’s permission to do anything with the Newland property.  Therefore, there was contradicting evidence as to the adversity element of adverse possession.  However, the Trial Court found Lloyd’s testimony was more credible, and ultimately concluded that Lloyd acquired title by adverse possession.

The Appellate Court found that testimony was introduced at the Trial that Lloyd used the Newland property exclusively, and that Lloyd’s use was continuous, adverse, notorious, and open for more than 21 years.  Although there was conflicting evidence presented at Trial on the adversity element, the Trial Court was in the best position to determine whose testimony was more credible, and the Trial Court believed Lloyd’s testimony.  Thus, the Court of Appeals found that Lloyd provided clear and convincing evidence supporting each element of adverse possession and upheld the Trial Court’s decision.

Adverse possession is one of very few ways that ownership of real estate may be different than the public records reflect.  When purchasing real estate, be mindful of whether the elements of adverse possession might have been satisfied by someone else.  Obtain a survey, and make part of your due diligence whether and how the property you are purchasing is being used by others, and consult with counsel who has experience with these issues if you have any doubt or any questions whatsoever.

Real Property Tax Challenge Bill to Become Ohio Law

Governor DeWine signed House Bill 126 on April 21, 2022, and it will officially become the law of Ohio 90 days later on July 21, 2022.  Passage of House Bill 126 is a great step in the right direction for the commercial real estate industry, and our lawyers were active in the process to help make this happen.

To learn more about the passage of this legislation, click here to review the final version of House Bill 126 that was passed.

Bill Would Improve Multiple Facets of Ohio Real Estate Title Law

Omni Title’s General Counsel, Rick Craven, recently testified before the Ohio House Finance Committee on behalf of the Ohio State Bar Association, in support of Ohio House Bill 237, which would improve multiple facets of Ohio real estate title law, including electronic recording, access to real property records, powers of attorney, lien priority, and judgment liens.

If it becomes law, this proposed Bill would require County Offices throughout Ohio to accept documents electronically for recording and to provide access to records electronically going back to at least 1980.  Additionally, language that our lawyers drafted was amended into HB 237 to improve Ohio judgment lien law and to codify the Restatement view of mortgage subrogation in lien priority cases.

Check out Rick Craven’s impressive testimony in support of HB 237 by clicking here to view a video of the Hearing before the Ohio House Finance Committee, during which Rick explained the Bill and its contours extremely well to the members of that inquisitive legislative body.

Real Property Taxation Bill Future Uncertain

The Ohio House of Representatives unanimously rejected the Ohio Senate’s amended version of House Bill 126 that would have changed Ohio law to only allow school boards to file complaints to increase value in response to a complaint to reduce value.  That Bill now heads to a Conference Committee with select members of the House and Senate set to determine its fate.