Legislation

 2013


HOUSE Bills

 

HB 80 MORTGAGE SERVICERS (Sponsors Representatives Denise Driehaus – District 31, and  Michael Foley – District 14) seeks to require registration of residential mortgage servicers, to regulate residential mortgage servicers, and to adopt civil and criminal penalties for violations of the bill’s provisions. OREIA is watching this bill but is not sure it will move through the legislature.

HB 84 HOME RENOVATIONS (Sponsors Representatives Michael Stinziano – District 18 and Cheryl Grossman – District 23) a bipartisan bill to authorize a nonrefundable income tax credit for the purchase or construction of an accessible home or for the renovation of a home to improve its accessibility.  At present OREIA has no position on this bill.

HB 85 HOMESTEAD EXEMPTION (Sponsors Representative Louis Terhar – District 30. and Anne Gonzales – District 19) is to enhance the homestead exemption for military veterans who are 100% disabled from a service-connected disability.  At present OREIA has no position on this bill.

HAS FAIR HOUSING STEP OVER THE LINE

Gary Pallini of Great Lakes REIA – eastern Cleveland area has been following this story. And OREIA has received emails and personal request for information on this issue.  OREIA PAC plans to be in touch with the attorney for further discussion on this issue.

Housing discrimination claims are being prosecuted in N.E. Ohio on behalf of an agency which hires testers to contact landlords. The initial inquiry by the testers has been a request for housing for a person with “anxiety” who has a “therapy dog” to “help them sleep.”

After the charge is filed, the Ohio Civil Rights Commission makes an initial inquiry and then demands that the landlords pay to the agency a monetary settlement (an amount that the agency itself determines) or else face further prosecution. The OCRC does not seek to resolve the discrimination, and does not offer any resolution of the charges which does not require the landlord to pay the agency the amount it demands.  There is no accounting for the amount of the demand (usually not less than $3,500), no explanation for how it relates to the alleged discrimination and OCRC exercises no discretion in the amount of the demand:  “Pay them $3,500 or else we will prosecute the charge.”

 

As part of the threat of prosecution, the landlord is further told by the State of Ohio (OCRC and Ohio Attorney General) that if any discrimination is later found, the landlord will have to pay attorney fees of tens of thousands of dollars, any damages to the agency, and face punitive damages, all of which can far exceed $30,000 or more.  So who does not pay?  No one….Everyone paid.  Then, three years ago a 78 year old widow decided to challenge the system because “it just wasn’t fair,” and found a lawyer willing to take up the fight.

After several weeks of research, the attorney came to the following conclusions:

 

1. The legal theory which the agency and the State of Ohio used to support the agency’s claims of discrimination and its entitlement to recover any damages were based on a very loose interpretation of case law from other jurisdictions.  The following issues have not been clearly established under any law:

A. Standing. Does a housing agency sustain any damages when it conducts testing paid for by a grant from HUD, and there is no complaint of discrimination by a bona fide applicant against the landlord, i.e. the only alleged discrimination is based on statements to a tester (*who is not a member of the protected class*.)

Damages are generally based on an injury which flows from a person’s wrongful conduct. What injury was sustained by the agency after the landlord made a discriminatory statement to one of its testers?  Liability is not imposed in a vacuum or based on a hypothetical event.

 

B.  Ambiguous Allegations.  Is “anxiety” a disability protected under the Fair Housing Laws?  Does “anxiety” “substantially limit” a “major life activity” sufficient to require an accommodation? What are the requirements for a “therapy dog” to be considered necessary or helpful to a person with anxiety to “help them sleep”?  Is the need for a “therapy dog” a reasonable accommodation for a person with “anxiety” to “help them sleep”?

This fact pattern contains the most vague and ambiguous terms which raises the critical question: Who and How are these issues to be decided?

2.  The Ohio Statues under which the OCRC and the Ohio Attorney General prosecute housing discrimination claims are fundamentally unconstitutional, including the following grounds:

A.   Due Process

a.   If a charge is not resolved through “conference, conciliation, and persuasion” the case goes to a hearing and if any discrimination is found, the landlord must pay “reasonable attorney fees” and is subjected to potential punitive damages.  There is no provision for the landlord to recover attorney fees or punitive damage if no discrimination is found regardless of how frivolous the charges may be.

b.  The landlord faces prosecution for any discrimination, not limited to the allegations in the complaint and not even limited to the parties in the complaint.

c.  Vague, Ambiguous and Inconsistent requirements. The statute obligates the landlord to make a “reasonable accommodation” for a “disability,” but also prohibits any inquiry about the extent of the disability and does not provide any specific standard of what is reasonable, or even what constitutes a “disability.”  Moreover, a reasonableness requirement fundamentally implies a compromise of competing interests, but the punishment for a failure to “settle”  under the statute is solely upon the landlord. (A mediation where if the parties don’t reach a “compromise” the landlord pays.)

B. Criminal Proceeding.   The attorney fees are mandatory against the landlord based on a finding of any discrimination. The award of attorney fees is historically viewed as punishment under U.S. law.  Where the state seeks to impose a punishment on a person for a wrong to the general public, it is considered a criminal proceeding and the accused is entitled to his constitutional rights: right to trial by jury, right to remain silent, the right to counsel, and the right to know specifically the charges which he is facing at trial.  The statute pretends to be a civil action, but in fact is being operated as a criminal sanction when it is used to enforce housing laws in favor of the general public, i.e. a housing agency.

ZINNGER – The constitutionality of the statues can only be decided on Appeal to the County Court following the OCRC’s administrative decision.  In other words – the only way to have a court even consider the constitutionality of the statutes issue is for a landlord to go through the administrative process, lose, face tens of thousands of dollars in attorney fees and damages, plus pay for their own attorney, and then pay an attorney to prosecute an appeal to the Common Pleas Court and then to the Ohio Supreme Court two or three years after the appeal is filed.


Legislation

 2013


OREIA RECOMMENDATIONS TO SENATE BILL 22 ON METHAMPHETAMINE LABS

 

Senate Bill 22 on Methamphetamine Labs (Sponsors Senators Frank LaRose – District 27 and William  Beagle – District 6.) is to provide for the remediation of real property on which an illegal methamphetamine manufacturing laboratory has been discovered. The goal of the bill is to protect Ohio families from exposure to dangerous chemicals used in methamphetamine labs as to what happened last year with the tragic death of a 17-month-old Akron child poisoned by meth lab chemicals. The bill is to establish rules and procedures for remediating homes that contain harmful meth-related chemicals. Once a lab is discovered, the bill establishes a notification chain by law enforcement of the property owner, board of health and children services if children are living in the home. When homes used in the production of the drug are identified, citizens should be assured that they will be cleaned up and families will not be living in unsafe conditions.

In its first hearing, Senator Capri Cafaro – District 32 questioned whether the notification was inclusive enough and suggested an expansion to all others living within the vicinity of the property. And she suggested title notification be expanded to include motor vehicles that have been used as mobile meth labs. Senator LaRose agreed to consider such language regarding vehicles noting because of the porous nature of vehicles with carpets and seats, vehicles become a “sponge” for the chemicals. He suggested vehicles become virtually valueless in such cases but suggested a possible title branding should such a vehicle is salvaged enough for continued use.

OREIA’S Concern is the cost to landlords which can be expensive (an average of $5000 – $10,000 per remediation).  While this was at one time a more rural issue than urban, the simplicity of manufacturing this poison has made it hard to detect, as a consequence, the activity is moving into urban areas. Landlords are to pay for the remediation of the property.  This issue is a bit complicated in that landlords, even under the best of safeguards, may not be aware of this activity occurring on their property.  Landlords use a variety of methods to screen clients, criminal and drug activities being among the criteria.  However, once a client is screened, there seems to be an expectation in this bill that the landlord will continue screening tenants for this illegal activity which has now become harder to detect. There is often an assumption that landlords have ready cash reserves to meet all emergencies.  For many REIA organizations, this is not necessarily true for its members.  Property upkeep is usually on a strict budget and when a large cost emerges that is unforeseen, this often results in discomfiture to other tenants for a delay in renting other property until the costs are recouped.  This not too far from the reason OREIA supported Senator William Seitz’s (District 8) bill on copper theft in the 2012 session of the legislature.

A second concern is whether how often a landlord is to review the property and the activity of the tenants without crossing a threshold of harassment with the Ohio Human Rights Commission.  There is some question by OREIA whether this bill was discussed with the Commission with this concern in mine. A third concern is that once the remediation is completed the actual value of the property is compromised by the fact that methamphetamine manufacturing had once taken place on the property.

OREIA recommends that the bill would allow land lords access to seized assets of offending tenants by local law enforcement authorities. These incomes would be used to assist landlords in the remediation of the property.  There is often a lot of discretion by those in charge of these seized assets as to how they will be used in the community.  Surely, a purpose to insure public health would be a valid resource.  The trust fund suggested in the bill for land lords to access, is vague and the payback time might not be in keeping with the ability of the property owner’s ability to do so.

Also, OREIA recommends that once a local health department or comparative local agency approves the remediation of the methamphetamine damage to the property as complete, it be placed on the deed to allow future sale of the property to be at current market value.  This has precedence with lead abatement rules and we believe this should be emulated here.

BILL 52  PROPERTY TAX COMPLAINTS (Sponsors Senator William Coley – District 4) is a reintroduction of legislation considered last session. It would allow property tax complaints to be initiated only by the property owner instead of the current process whereby a county establishes property value through the county auditor’s office.

Presently, after the government sets the valuation through the auditor’s office, other governmental entities then can file a complaint with the auditor disputing its determination of value for the property.

“This has resulted in property owners having to consent to the higher valuation set forth in the complaint or spend funds defending the complaint, even if the owner has no major objection to the original valuation,” Mr. Coley said.

The appeals are processed through the Board of Tax Appeals, which has a substantial backlog in cases. The bill would help to alleviate its caseload, he said. “Although this legislation would prevent anyone other than the property owner from filing a complaint, if the property owner files a complaint, all other parties, including local school boards, will continue to receive notification of the complaint and will have a right to defend the complaint or even counter claim that the auditor’s valuation is too low,” Sen. Coley said. This bill has just come to OREIA’s attention and will be reviewed.


Legislation

 2013


GOVERNOR’S BUDGET MAY AFFECT ASSOCIATION DUES

 

Since the introduction of the executive budget (HB 59) we have been investigating the proposed tax reforms, and how they might impact our clients. We have had discussions with legislative leaders, attended numerous interested party meetings, and have spoken with experts in tax policy. The new sales tax proposal is difficult to analyze because it does not specifically list each service that would be taxed, but rather simply lists exclusions to the tax. Through our efforts, we have determined that association dues would now be subject to a 5% tax under the current budget proposal. This was confirmed by trusted attorneys who have reviewed the governor’s proposal. We will continue to investigate this issue and will be sure to provide you with all available information that will help provide clarity to the tax reforms proposed in the budget.

THE STATE HOUSE


Legislation

 2013


GROBOSKY ISSUE

 

Local REIA groups are asking for taking point on this issue.  Right now there are discussion going on as to how to deal with issues, OREIA, Great Lakes REIA(Cleveland Area), National REIA, National Vacant Lands Association are in discussion with state officials. Mahoning Valley REIA has been taken measures to insure that unfair testing does not implode on its service area. There will be a report on this later.  ORIEA ANNUAL CONFERENCE will be held in the Greater Cincinnati area, come and meet Mrs. Grobosky at a special reception and learn how to support her.  She is a very nice and brave lady who has stood up for investors since 2008.

Related, in our last issue we congratulated HOUSING MADE EQUAL IN CINCINNATI in notifying the community about testing dogs and current rules.  The inability of the local housing authority in Astabula County to do so, that lead to the situation affecting Mrs. Graboskey.  We asked if your local housing authority has done so for your community.  No word back as yet.  Good news though. Ohio Civil Right Commission will come to your group and explain the situation.  Greater Dayton REIA has accepted the offer.

 

DISAPPEARANCE OF HUD (Maybe not such a good thing)

Having issues with your local Housing Authority?  Have you noticed that Ohio no longer has local HUD offices?  Are these related?  REIA Greater Cincinnati is now investigation the impact on this for investors and reaching to local faith based and housing groups to understand its implications for tenant and landlords alike.


Legislation

 2013


OCT/NOV 2013 Newsletter

 

OREIA WANTS TO KNOW:  ARE OPHP CERTIFED MEMBERS SITTING ON YOUR LOCAL LANDBANK BOARD?

TO REPLY CONTACT OREIALEGISLATIVE@aol.com

OREIA President, Don Newman writes:

When this Ohio SB 172 first came out, I remember discussing the notion that this was the first bill ever to recommend that an OPHP graduate be placed on the board of each local landbank. I and our local president offered to be on the Lucas County Landbank but were never even consulted.  It ended up that the treasurer put all of the same old people from the political arena on, and we haven’t heard a word since.

Is there any accountability for what the Landbank does?

Also, recently a local investor lost close to 100 properties and the Landbank swept every one of them up. Many had existing tenants and many did need renovation and some needed torn down. But, the local housing authority quickly established a new LLC and bought most of them for $250.00 each. Yes $250.00 each. I did the closing.

It seems extremely odd that they were never offered on the market so that investors could have bought them yet an entity formed by a government agency swept them up without a word.

I have asked our lobbyist to you check on the specifics of this law as to an OPHP graduate on the local landbank boards. Yet, I have not heard of one investor on any board.

Let us know what is happening in your area on this issue.

Thanks

Don Newman

 

CHANGES IN POWER IN COLUMBUS

Attracting quite a bit of attention recently has been the race within the Republican Party to succeed Rep. William G. Batchelder (R-Medina) as speaker of the Ohio House of Representatives. Speaker Batchelder is term-limited and will pass his gavel after next year’s election. At the moment, Rep. Ron Amstutz (R-Wooster) and Rep. Cliff Rosenberger (R-Clarksville) appear to be the top contenders. Amstutz, the 32-year veteran legislator, has been chairman of the powerful House Finance Committee since 2011 and trails only Speaker Batchelder in legislative experienced. Rosenberger on the other hand, was elected to the House in 2010 after serving in the Air Force and working for President George W. Bush’s administration, first in the Office of Political Affairs and later as a special assistant to the U.S. Secretary of the Interior. Although the formal leadership vote is more than 15 months away, Republican members of the House are already choosing sides with hopes to be on the future speaker’s leadership team or to land a key committee chairmanship. Whoever prevails will establish the order of power and influence in the Ohio House and will chart the course for Ohio’s 131st General Assembly.

 

NEW GRANTS FOR AFFORDABLE HOUSING

In housing news, the Ohio Development Services Agency has awarded four cities and nine counties grants to improve affordable housing for low- to moderate-income Ohioans. The grants will support home rehabilitation and repair assistance, homebuyer and homeowner education programs and homeless prevention services. “These grants help keep families in their homes and improve neighborhoods long-term, that strengthens the quality of life in the community,” said David Goodman director of the Ohio Development Services Agency.

HB5 MUNICIPAL CORPORATIONS INCOME TAXES (GROSSMAN C, HENNE M) To revise the laws governing income taxes imposed by municipal corporations.
  Current Status:    5/8/2013

House Ways and Means Committee – Seventh Hearing

IT APPEARS THE NET OPERATING LOSS WILL BE KEPT AND IMPLEMENTED OVER A TWO YEAR PERIOD

 
HB9 RECEIVER’S POWERS (STAUTBERG P) To add to and clarify the powers of a receiver and to provide a procedure for a receiver’s sale of real property.
  Current Status:    10/9/2013

Senate Civil Justice Committee – Third Hearing

No report, as yet.

HB46 SMALL CLAIMS DIVISION-TAX APPEALS BOARD (AMSTUTZ R) To create a small claims division of the Ohio Board of Tax Appeals.
  Current Status:    2/13/2013

Referred to the House Ways and Means Committee

HB80 RESIDENTIAL MORTGAGE SERVICERS REGULATION (DRIEHAUS D, FOLEY M) To require registration of residential mortgage servicers, to regulate residential mortgage servicers, and to adopt civil and criminal penalties for violations of the bill’s provisions.
  Current Status:    6/4/2013

House Financial Institutions, Housing and Urban Development Committee

Second Hearing

 
HB84 HOME ACCESSIBILITY TAX CREDIT (STINZIANO M, GROSSMAN C) To authorize a nonrefundable income tax credit for the purchase or construction of an accessible home or for the renovation of a home to improve its accessibility.
  Current Status:    6/12/2013

House Ways and Means Committee

First Hearing

 
HB85 HOMESTEAD EXEMPTION (TERHAR L) To enhance the homestead exemption for military veterans who are 100% disabled from a service-connected disability.
  Current Status:    10/8/2013

House Finance and Appropriations Committee

First Hearing

 
HB138 TAX APPEALS BOARD LAW CHANGES (MCCLAIN J, LETSON T) To make changes to the law governing the Board of Tax Appeals
  Current Status:    7/11/2013

SIGNED BY GOVERNOR

Eff. 10/11/2013; Some Provisions Other Dates

 
HB140 RESIDENTIAL CONSTRUCTION CONTRACTORS (PATMON B) To require licensure of residential construction contractors and to create the Residential Builders’ and Maintenance and Alteration Contractors’ Licensing Board to regulate the licensure and performance of residential construction contractors.
  Current Status:    5/8/2013

House Commerce, Labor and Technology Committee

First Hearing

HB173 DEBT SETTLEMENT SERVICES (TERHAR L, MALLORY D) To regulate providers of debt settlement services.
  Current Status:    6/19/2013

House Financial Institutions, Housing and Urban Development Committee

Second Hearing

 
HB201 MORTGAGE SUBROGATION (BUTLER, JR. J) To make changes relative to mortgage subrogation and entries of satisfaction.
  Current Status:    6/19/2013

House Financial Institutions, Housing and Urban Development Committee

First Hearing

 
HB223 RESIDENTIAL FORECLOSURE ACTIONS (GROSSMAN C, CURTIN M) To expedite the foreclosure and transfer of unoccupied, blighted parcels and certain abandoned properties and to make other changes relative to residential foreclosure actions.
  Current Status:    10/9/2013

Senate Civil Justice Committee

Fourth Hearing

No sponsor hearing set as yet for this bill.

 
SB22 PROPERTY REMEDIATION-METHAMPHETAMINE LABS (LAROSE F, BEAGLE B) To provide for the remediation of real property on which an illegal methamphetamine manufacturing laboratory has been discovered.
  Current Status:    3/6/2013

Senate Medicaid, Health and Human Services Committee

First Hearing

This bill is not moving at the present time.  OREIA has kept an eye on this, in particular, in that it is concerned, as it was written when last attending a drafting session, it will be in conflict with Tenant/Landlord Law.

 
SB29 INCOME TAX REFUND-JUDGMENT DEBTOR TENANT (SCHAFFER T) To enable a judgment creditor landlord to obtain a court order directing the Tax Commissioner to pay the judgment debtor tenant’s income tax refund to the landlord.
  Current Status:    2/27/2013

Senate Ways and Means Committee

First Hearing

OREIA is studying this bill to see what implications it will have on landlords.

 
SB51 FLAG DISPLAYS (COLEY W) To prohibit manufactured homes park operators, condominium associations, neighborhood associations, and landlords from restricting the display of service flags, and the U.S. flag.
  Current Status:    3/13/2013

Senate Public Safety, Local Government and Veterans Affairs Committee

First Hearing

 
SB52 PROPERTY TAX COMPLAINTS (COLEY W) To permit property tax complaints to be initiated only by the property owner.
  Current Status:    6/18/2013

Senate Ways and Means Committee

Fourth Hearing

 
SB125 OHIO CIVIL RIGHTS LAW EXPANSION (LAROSE F, SKINDELL M) To prohibit discrimination on the basis of sexual orientation or gender identity.
  Current Status:    6/26/2013

Referred to the Senate Civil Justice Committee

 
SB172 LAND REUTILIZATION-PROPERTY TAX FORECLOSURE LAWS (PATTON T) To modify the laws governing land reutilization programs and property tax foreclosures.
  Current Status:    10/9/2013

Senate Public Safety, Local Government and Veterans Affairs Committee

First Hearing

OREIA  is currently studying implications of this bill on investors.

 
SB191 LANDLORD-FORECLOSURE ACTION NOTIFICATION (TAVARES C) To require a landlord who has been served with notice of a foreclosure action to disclose to a prospective tenant of the property subject to that action of the action and to terminate the provisions of this act on January 1, 2018.
  Current Status:    9/26/2013

Referred to the Senate Civil Justice Committee

Other legislation under watch is HB 22t – Property Tax Roll Back, this would remove 12!/2% exemption for properties and result in possible tax increases.

If your area has a particular interest in a bill stated above or a concern contact us at OREIALEGISLATIVE@aol.com.


Legislation

 2013


NOV/DEC 2013 Newsletter

 

In last month’s newsletter, OREIA President challenged each chapter to respond to a question of whether and OPHP awardee, as required by state statute, sits on the local land bank board.  As of now, two responses: Cincinnati no, Mahoning Valley yes.  OREIA WANTS TO KNOW, are local real estate investors represented by an OPHP member on your local land bank board?

OREIA WANTS TO KNOW:  ARE OPHP CERTIFIED MEMBERS SITTING ON YOUR LOCAL LANDBANK BOARD?

UPDATE ON LEGISLATION

S.B. 16 – ABANDONED PROPERTIES (Schiavoni) – OREIA PAC Legislative Committee has voiced approval to amendments regarding the beautification of abandoned properties.  Much of the bill’s requirement in protecting the right of property owners were provided by the Committee (no trespassing in the interior of the building, no squatters on property who are hired to do external repairs, insuring beautification is excludes any activity that is not cosmetic).  In addition, the Committee supports an amendment by Senator Coley of Butler County that beautification of properties will be first approved by municipal court – an amendment supported by the OREIA PAC. S.B. 16 as amended was favorably reported out of committee with a unanimous vote.  The bill must now be voted on by the full Senate and then go through the committee process in the House.  We will keep you update on the bill’s status.

WATER METER FREEDOM BILL – OREIA PAC is currently writing an amendment to utilities bill that requires an unpaid water bill to be the responsibility of the landlord, unlike other unpaid utility bills that follow the tenant.  This process is now beginning.

HELEN GRYBOSKY FAIR HOUSING LEGISLATION – is now under way to insure that Ohio law affecting testing and fines in accordance with federal law.

RELATED – All Ohio REIA Legislative Action Committee, an independent organization from OREIA, held a reception the OHIO REAL ESTATE CONFERENCE, this past month raising funds from for Helen Grobosky’s legal funds.  Monies raised are to be matched by National Real Estate Investor’s Association.

LOSS OF LOCAL HUD OFFICES

There is a question why political leaders, real estate investors and fair housing advocates have been silenced regarding the closing local HUD offices.  For instance, Ohio, Michigan, Wisconsin, Illinois and Indiana are serviced out Chicago.  Some telling effects of this are the emboldening of certain Housing Authorities establishing questionable laws.  For instance, Cincinnati Housing authority making rules on Section 8 that could very well be beyond the ability of landlords to comply, forcing them to the market and leave many tenants without affordable residences.  There seems to be a situation that the Housing Authority of the City of Hamilton feels it is above the Ohio Sunshine Laws when disclosing public documents.  OREIA is investigating the facts behind these issues.


Legislation

 2014


Repair regulations are finally issued

 

On Friday, the IRS issued long-awaited final (T.D. 9636) and proposed regulations regarding the treatment of expenditures incurred in acquiring, producing, or improving tangible assets, including rules on determining whether costs related to tangible property are deductible repairs or capital improvements.

The IRS noted that it had received many comments on the regulations, most of which it addressed in issuing the rules. (The AICPA submitted a comment letter recommending various changes, described here.)

The regulations affect all taxpayers that acquire, produce, or improve tangible property. The final regulations, which will be published in the Federal Register on Sept. 19 and apply to tax years beginning on or after Jan. 1, 2014, do not finalize or remove the temporary regulations governing dispositions of property under Sec. 168. Instead, to address significant changes in this area, revised proposed regulations were issued at the same time as the final regulations.

The final regulations adopt the temporary regulations issued in 2011 (T.D. 9564), with the following changes:

  • In response to comments that the $100 threshold for property that is exempt from capitalization was too low, the final rules raise it to $200 and retain the rule that the amount can be increased in IRS guidance. The rules also incorporate the definition of standby emergency spare parts contained in Rev. Rul. 81-185 and make these spare parts eligible for the optional election to capitalize certain materials and supplies.
  • The final rules retain the rule in the temporary regulations permitting taxpayers to elect to capitalize certain materials and supplies but, in response to comments, limit the rule to rotable, temporary, or standby emergency spare parts.
  • The rules clarify that taxpayers may revoke the election discussed above by filing a ruling request, which the IRS will grant if the taxpayer establishes that it acted reasonably and in good faith and that revocation will not prejudice the government.
  • The final rules change the requirement that taxpayers using the optional method for pools of rotable spare parts use it for all pools of rotable spare parts used in that trade or business to permit taxpayers to not use the optional method for those pools of rotable spare parts for which it does not use the optional method in its books and records for the trade or business.
  • Also in response to many taxpayer comments, the final rules clarify the de minimis rules, including permitting the safe harbor to be elected each year, providing rules for taxpayers without applicable financial statements to use the method, and simplifying the complicated method for calculating the ceiling for applying the de minimis amount provided in the temporary regulations.
  • The preamble clarifies that earlier revenue procedures treating certain property as materials and supplies are not affected by the final rules.
  • Again in response to comments, the final rules allow taxpayers that are members of consolidated groups for financial statement purposes but not for federal income tax purposes to use the applicable financial statements and accounting procedures of their group to qualify for the de minimis safe harbor.
  • The final rules change the treatment of additional costs of acquiring property subject to the safe harbor to include additional invoice costs, such as delivery fees.
  • Again in response to comments, the final rules simplify the de minimis safe harbor by requiring all materials and supplies be included if taxpayers elect to use the safe-harbor method.
  • Another change is a clarification of the interaction of the de minimis rule with the rule under Sec. 263A that certain property be capitalized.
  • The final rules clarify the meaning of certain terms that are used in determining contingency fees for inherently facilitative costs in acquiring property that are required to be capitalized.
  • In response to comments, the final rules provide that taxpayers may deduct the removal cost when they remove a unit of property.
  • A significant change for small taxpayers is that taxpayers with gross receipts of $10 million or less can elect to deduct, for buildings that initially cost $1 million or less, the lesser of $10,000 or 2% of the adjusted basis of the property for repairs, etc. each year.

The IRS also issued proposed regulations on dispositions of property depreciable under the Modified Accelerated Cost Recovery System (REG-110732-13). The IRS had announced in Notice 2012-73 that it intended to revise the disposition rules that appeared in the temporary regulations. Friday’s proposed regulations contain those revisions, but taxpayers can continue to apply the rules in Temp. Regs. Secs. 1.168(i)-1T and 1.168(i)-8T for tax years beginning on or after Jan. 1, 2012, and before Jan. 1, 2014.

While the proposed regulations contain many of the same property disposition rules as the 2011 temporary regulations, they make changes to the rules on determining the asset disposed of and the qualifying disposition of an asset in a general asset account. They also contain new rules for partial asset dispositions.

Comments on the proposed regulations are requested within 60 days of their publication in the Federal Register (scheduled for Sept. 19), and a public hearing has been scheduled for Dec. 19.

Alistair Nevius (anevius@aicpa.org) is the JofA’s editor-in-chief, tax and Sally P. Schreiber (sschreiber@aicpa.org) is a JofA senior editor

Legislation

May 2014


Do You Want Your Government Competing with You for the Best Deals?

 

Ohio Real Estate Investors Take Action To Oppose: S.B. No 172 Wants to Remove Ownership Threshold Limits on Land Banks

We need witnesses willing to testify about their experiences dealing with land banks, contact Kim@OREIA.com ASAP.

WHY THIS MATTER TO YOU: For OREIA members and real estate investors the cap on land bank ownership is not as concerning as how land banks have begun taking ownership of occupied properties, especially in smaller counties. This practice is limiting inventory. For example some properties are never making it to sheriff’s sales. We are going to bat for real estate investors in hopes of making changes to this bill.

What we propose:
1. Land banks have 0% acceptance of occupied property
2. Land banks have 0% property occupied by tenants
3. Creation of an exemption of property that is sold to an owner or owner/occupant in legitimate land contracts with ownership to take place within 5 years
4. The Land contract would have to be bona fide and recorded.


Legislation

May 2014


Finally, a Win for Landlords!

 

City of Mt. Healthy Repeals Rental Registration Law in Face of Landlord Lawsuit

The City of Mt. Healthy, Ohio, repealed its new “Rental Registration” law under threat of a lawsuit by several plaintiffs claiming that the law was unconstitutional.

The law, which required a $100 annual fee per rental unit and a yearly interior and exterior inspection, was in effect for less than 1 month before the suit was filed and the requirement withdrawn.

The 1851 Center for Constitutional Law issued this press release in regard to the law:

The 1851 Center for Constitutional Law today moved in federal court to immediately enjoin Ohio municipalities, and the City of Mt. Healthy in particular, from enforcing new “Rental Permit Programs” that require small landlords to undergo warrantless inspections, pay permit fees, and obtain a license simply to continue renting their houses to tenants.

Such municipal ordinances, such as the Mt. Healthy ordinance which became effective in March, in addition to restricting Ohioans’ property rights, subject property owners and tenants to open-ended warrantless searches that violates the Fourth Amendment to the United States Constitution and Section 14, Article I of the Ohio Constitution. Further, the Rental Permit Program discriminatorily applies only to single family homes, and not to multi-family residences, such as apartments.

 The legal action is filed on behalf of four rental property owners and one tenant, all in the City of Mt. Healthy, Ohio, which is located just outside of Cincinnati in Hamilton County. These property owners have long rented their property in Mt. Healthy without license or inspections, and their properties have never been the subject of complaint by tenants, neighbors, or others.

 The City has threatened to criminally prosecute and even imprison these landlords if they continue to rent their homes without first submitting to an unconstitutional warrantless search of the entire interior and exterior of these homes.

 Both the United States and Ohio Supreme Court have invalidated warrantless inspections of rental property, and repeatedly held that warrantless administrative inspections of business property are generally invalid, absent exigent circumstances.

 Nevertheless, Ohio cities have vigorously sought to collect licensing fees from area landlords and find cause to impose fines, and the warrantless searches serve as the lynchpin to each of these goals.

 Ordinances such as the Mt. Healthy Rental Permit Program establish an absolute prohibition on renting property within a community, even though the landlord may have long done so and even though his or her property may be in pristine condition, without a government-approved license that cannot be acquired without first paying a $100 annual fee per rental home and submitting to an open-ended warrantless search of the property, inside and out.

 The lawsuit seeks to restore Ohio small business owners’ freedom from warrantless searches without probable cause. In doing so, the 1851 Center’s Complaint explains the following:

  • Searches of homes, even when business property to the owner, require a warrant, and warrantless searches violate Ohioans’ Fourth Amendment rights.
  • Even if a city were to seek a warrant to insect a rental home, in the absence of serious complaints about the property or an emergency, regulatory schemes such as rental permit programs do not allow cities to seek and obtain warrants to search homes.
  • Licensing fees that are designated for the purpose of conducting unconstitutional searches are also unconstitutional, and cities cannot require their payment.

 “Local government agents do not have unlimited authority to force entry into Ohioans’ homes or businesses. To the contrary ‘houses’ are one of the types of property specifically mentioned by the Fourth Amendment; and Ohioans have a moral and constitutional right to exclude others, even government agents, from their property. Entry requires either a warrant or an emergency, and neither is present with respect to these suspicionless rental inspections,” said Maurice Thompson, Executive Director of the 1851 Center.

 “Government inspections of one’s home frequently results in arbitrary orders to make thousands of dollars worth of untenable improvements to even the most well-maintained properties. The right to own property in Ohio has little value if local governments can continuously chip away at one’s right to actually make use of that property, requiring government permission slips for even the most basic human arrangements.”

OREIA is exploring ways in which to support this non-profit public interest law firm. Learn more about the 1851 Center for Constitutional Law at www.OhioConstitution.org


Legislation

July 2014


Ohio Department of Commerce Takes a Shot at the Legal Rights of Contract Assignors

 

In the past 6-12 months, leaders of several OREIA-affiliated associations have received reports of members receiving “cease and desist” letters from the Division in regards to both wholesaling activities and lease/option assignments.

These letters have been described as “pseudo cease and desists”, because in their most common form, they indicate that the recipient MIGHT be engaged in activities which require a license, and if so, the recipient should stop.

However, in this quarter’s ODRE newsletter (full text available at //www.com.ohio.gov/documents/real_newsletterSpring2014.pdf, the Division took things a step further with an article aimed at real estate agents entitled: BEWARE: Seminars That Teach Unlicensed Real Estate Activity.

            The article states, in part: “Beware of seminars that provide instructions on wholesaling and option purchase contracts. Language included in these schemes include: ‘tying up the real property,’ putting the house in contract until a buyer is found, and placing the home in contract for the purpose of re-selling the property. Despite what is being taught at these seminars, a real estate license is required to engage in these activities.”…

“Pursuant to R.C. 4735.052, the Ohio Real Estate Commission may impose a civil penalty up to $1,000.00 a day for unlicensed activity. Each day a violation occurs or continues is a separate violation. For example, under most circumstances, if an individual is involved in unlicensed activity for one month, a civil penalty of $30,000 may be issued”

            The article goes on to warn real estate agents and brokers that they may be subject to disciplinary action for working with wholesalers or lease/option assignors, and encouraging them to report such activity when they see it.

            However, the Department of Commerce’s stance in this matter conflicts with that of other legal experts, who believe that ORC 4735.01 does NOT apply to correctly-handled contract assignment transactions. These authorities argue that, while real estate agents and brokers do in fact earn commissions for representing others in real estate transactions, wholesalers and lease/option assignors, by virtue of the fact that they are the buyer, seller, or tenant in a purchase and/or lease agreement, are principals in the transaction. Per the revised code, it is only required the people transact real estate deals for another obtain and maintain a real estate license.

            Several wholesalers and organizations throughout the state are working with attorneys in various cases; until this matter is adjudicated, OREIA holds no official position as to whether a real estate license is legally necessary to wholesale or assign lease/options.

However, to clarify questions received from members and group leaders, we do want members to know that the Division’s current position does NOT appear to be that wholesaling or lease/option assignments are “illegal” in Ohio—only that CONTRACT ASSIGNMENTS (whether of purchase agreements, options, or lease/options) require a real estate license.

            In other words, it appears that the clear ways to avoid scrutiny from the division in regards to wholesaling contracts is to:

1. Get a real estate license OR

2. Close deals—with your own cash or that of a transactional funder or private lender—before reselling it.

            Information regarding actions by and against the Division is moving quickly; watch the OREIA website at www.OREIA.com for updates as they occur.


Legislation

August 2014


Ohio SB 349 ("The Grybowsky Bill") Seeks to Level the Playing Field for Housing Providers

 

OREIA members should, by now, be familiar with the case of Helen Grybosky, the 78 year old widow from Northeastern Ohio who was accused of discrimination after being “tested” by a local Fair Housing agency on 8 separate occasions, with each tester claiming a different—and apparently entirely made-up—set of familial or medical factors .

   In 2 of these cases, the Fair Housing Resource Center, a fair housing agency, accused Ms. Grybosky of discrimination and demanded a $3500 “settlement”. When she refused to pay, the FHRC filed complaints against her with the U.S. Department of Housing and Urban Development, which sent the cases to the Ohio Civil Rights Commission for investigation. Because Ohio law imposes mandatory damages and attorney’s fees on defendants found guilty of discrimination in these cases, Ms. Grybosky was ultimately fined $100 for her “discrimination”—and $9,000 to pay the attorneys who prosecuted her.

   This case has drawn national attention to Ohio and the problem of “Fair Housing Bounty Hunting”. This practice, legal and, in fact, incentivized by the current anti-landlord slant of Ohio law, works like this:

  • Fair Housing organizations receive grants from HUD which are used, in part, to hire “testers” to pose a legitimate housing seekers.
  • These “testers” make contact with owners and managers of available rental units, claim to be interested in those units, then reveal their membership in a protected class. They may claim to have children, have a disability, or, as in one of the cases with Ms. Grybosky, need a pet to “help them sleep” or “relieve anxiety”.
  • If the housing provider says or does anything that might be construed as a violation of fair housing law (In Ms. Grybosky’s case, she agreed to the “helper animal” despite a published no-pets policy, but asked for a $100 pet deposit to cover any possible damages), the Fair Housing Organization generally offers a “settlement”—that is, a fee that the landlord can pay to avoid further prosecution. This is generally, according to landlords who’ve been through the process, accompanied by assurances from the Fair Housing organization that refusal to pay the money will result in escalation to HUD and the OCRC, which will cost the landlord a great deal more even if he wins, due to his own legal expenses.
  • If the housing provider refuses to pay, either on the grounds that he did not discriminate or on the grounds that the amount of the “settlement” is excessive, the Fair Housing Organization files a complaint with HUD, which sends it to the Ohio Civil Rights Commission, which ‘investigates’ the allegations. If the OCRC determines that there has been discrimination of any sort, Ohio law requires that it levy damages and that the defending landlord pay the attorney’s fees for the Fair Housing organization

In other words, there’s no real downside for Fair Housing Organizations in these cases. Taxpayer money pays the salaries of the testers. Most property owners and managers simply pay the “settlements” rather than risk tens of thousands of dollars in legal expenses.

And what’s most interesting of all is that these particular cases do little for the very-important cause of fair housing: when a tester is the source of the complaint, no one was reallyseeking housing, thus no one was really denied it.

The ability of Fair Housing Organizations and their teams of testers to collect money in the form of settlements and damages for cases in which no actual housing seeker was discriminated against provides a strong financial motive for more testing, and none for outreach, education, and working with industry groups like OREIA and its member organizations to spread the word about illegal discrimination

   A new bill proposed by Ohio Senator William Seitz (R-Cincinnati) proposes to bring Ohio law into sync with federal fair housing law and the laws of most states, plus de-incentivize “Fair Housing Bounty Hunting” . Ohio Senate Bill 349 would:

  • Make the awarding of actual damages, punitive damages, and attorney’s fees to plaintiffs discretionary, not mandatory as they are today
  • Allow defendants accused of discrimination to recover attorneys fees in cases where the defendant is the prevailing party
  • Prohibit actual or punitive damages from being awarded to fair housing agencies
  • Reinstate the “Mrs. Murphy” law in Ohio, which exempts certain small owners from certain facets of fair housing law

   The Fair Housing community’s reaction to this law has been, unsurprisingly, swift, violent, loud, and inaccurate.

     Claims that the law would “take Ohio out of compliance with federal law” and “cost Ohio $1 million [in federal money for fair housing]” are, according to legal experts, incorrect—in fact, it would make Ohio’s law more closely mirror federal law. And of course, statements that this revision “sets back civil rights” or “allows landlords to discriminate and risk only a slap on the wrist” are emotional statements meant to inflame the passions of those who haven’t read the bill, or who haven’t personally experienced the crushing unfairness of the system as it exists today.

   OREIA fully supports the goals and visions of fair housing and anti-discrimination laws. No American should be denied housing because of his or her membership in a ‘protected class’. Our members are required to get fair housing training in order to receive the Ohio Professional Housing Provider designation provided by OREIA. Southern Ohio’s fair housing organization, Housing Opportunities Made Equal, has been included as an exhibitor—at no cost—at each OREIA conference since it’s been held in Cincinnati, providing all attendees with the chance to get even more training and information about fair housing. Intentional refusal to follow the dictates of fair housing law is cause for removal from our organization per its ethics requirements.

   At the same time, the fair housing SYSTEM must be “fair” to all, including those who expend enormous amounts of time, energy, and money providing the housing—and under current Ohio law, it’s not. That’s why OREIA supports SB 349: it’s a law that brings some sanity back to Ohio’s fair housing system.

Furthermore, OREIA would like to call upon all of the organizations and parties interested in ending housing discrimination in Ohio to open a dialog about how we, and our member groups, can assist in reaching out to small housing providers throughout the state with additional education and training about these issues.

     We all want the same thing: for people to have housing. The providers of that housing have much to learn from, and much to offer to, the people who defend it; and the reverse is equally true. OREIA and its members stand ready to learn, and to teach; do you?


Legislation

November 2014


OREIA's New Legislative Director Unveils 2015 Goals

 

In late October, Dan Acton, a member of Butler County Investment Property Owner's Association (IPOA) and experienced real estate investor, was hired on as OREIA's new legislative director. Dan continues to work with OREIA's lobbyist, Governmental Policy Group, and to set and work on legislative goals for OREIA and its local associations.

The 2015 plan for OREIA's legislative activities includes:

For local associations:

  • To encourage group leaders to get all members more active in the government process at some level, including:
    • Volunteering rental properties as locations for signs for investor-friendly candidates in the hundreds of local elections coming up in 2015
    • Attending or hosting a small event for candidates (non-profit associations should check with their attorneys before sponsoring these events; members can, of course, do so freely)
    • Serving on governmental board and committees, such as the planning commission, board of appeals, or land bank
    • Running for office
  • For the associations themselves to become more openly involved in the community, with activities like:
    • Adopting struggling families that need food or other assistance during the holidays
    • Supporting and sending volunteers to local "repair affairs" and other events and projects that help poor homeowners with repairs and housing


For the State Legislature
 2015 promises to be an interesting year with many new members in both the House and Senate. Bipartisan legislation has increased culminating in the passing of the redistricting bill. That places on the ballot a more competitive and fair bipartisan approach to the way House and Senate districts are chosen. Our industry and the entire state win with both parties working with each other.

While the current "lame duck" session means that many of the bills introduced in 2014 are effectively dead, these will probably reappear in the next legislative session, and are of particular concern to Ohio real estate entreprenuers and landlords:

  • HB 140 - Sought to license residential contractors. Would increase costs, reporting, and permits for those acting in the capacity of a contractor.
  • HB 223 - Provided expedited sales procedures for foreclosures. Would have created possibility of a new class of real estate auction bidders known as "qualified bidders". Also advertising and who conducts sales was in question.
  • HB 422, HB 545, HB 569, HB 662 - All four dueling bills proposed changes in utility sub metering. This bill is nearly guaranteed to come back due to some renters--house staff members, to be exact--accusing investors of overcharging while sub-metering. The renters I'm referring to are House staff members!
  • HB 586 - Proposed changes to Sheriff's auctions allowing others to be involved with the sales, bypassing Sheriff.
  • HB 622 - Proposed to allow renters to display flags. Bill had several items of concern including potentially multiple flags on the same property even perhaps against the owner's wishes for location, size, placement, etc.
  • HB 615/SB 359 Proposed emergency egress bill with smoke alarm amendment - Sought to mandate emergency exits in some multi family buildings on retroactive basis. Also had provision for requirement for photo-electric smoke detectors. Both provisions of this bill are certain to be back. We are being told that both initiatives are likely to pass in the future so we need to make sure our needs are taken into consideration.

In closing, I look forward to meeting and serving you, the OREIA members in the year to come. The OREIA legislative committee is looking for additional volunteers, and has a regular teleconference on the 2nd Mondayof each month. If you'd like more information or to help with the committee, contact me at actoncompany@aol.com.

Have a safe holiday season and make sure all of you and your residents have working smoke detectors!


Happy Hanukkah and a very Merry Christmas!!!
Dan Acton


Legislation

May 2016


Ever Wonder What OREIA is Doing for YOU?

 

The majority of the financial support OREIA receives from your dues and its annual convention are focused on monitoring and influencing statewide laws that impact your wholesale, retail, and rental business.

    You might ask, "How much time and money could that actually take?"

    The answer is--a lot of both.

    You'd be amazed at the number of real estate-related bills are introduced in the Ohio legislature every year--and each one must be analyzed, tracked, and often intercepted through interacting with the bill sponsors, committees, and supporters early in the process.

   We try hard not to alarm you about each and every one of these bills, and only inform you when one is approaching enactment and needs your action. But make no mistake--the work to keep them from coming to that point (or, in some cases, push them to that point) is ongoing and intense.

   In addition to our current focus, the Grybosky bill, OREIA is currently tracking 13 other bills introduced since the beginning of this year, including:

 

HB18

FLAG-BANNER DISPLAY (GONZALES A, GINTER T) To prohibit manufactured homes park operators, condominium associations, neighborhood associations, and landlords from restricting the display of blue star banners, gold star banners, and other service flags, and to prohibit manufactured homes park operators and landlords from restricting the display of the United States flag.

Current Status:   

4/14/2015 - BILL AMENDED, House Armed Services, Veterans Affairs and Public Safety Committee, (Second Hearing)

HB77

CONTRACTOR REGISTRATION (PATMON B) To require statewide registration of home improvement contractors, to modify the membership of the Ohio Construction Industry Licensing Board, and to make an appropriation.

Current Status:   

3/24/2015 - House Commerce and Labor Committee, (Third Hearing)

HB126

NUISANCE LAW (KUNZE S, LELAND D) To expand nuisance law to include any real property on which an offense of violence has occurred or is occurring.

Current Status:   

3/25/2015 - Referred to House Judiciary Committee

HB134

FORECLOSURES-VACANT PROPERTIES (GROSSMAN C, CURTIN M) To establish summary actions to foreclose mortgages on vacant and abandoned residential properties, to expedite the foreclosure and transfer of unoccupied, blighted parcels, to make other changes relative to residential foreclosure actions, and to terminate certain provisions of this act on December 31, 2019, by repealing sections of the Revised Code on that date.

Current Status:   

5/5/2015 - House Financial Institutions, Housing and Urban Development Committee, (Second Hearing)

HB144

METHAMPHETAMINE-PROPERTY REMEDIATION (ANIELSKI M, SYKES E) To provide for the remediation of real property on which an illegal methamphetamine manufacturing laboratory has been discovered.

Current Status:   

4/21/2015 - House Judiciary Committee, (First Hearing)

HB149

ATTORNEY'S FEES-ACTUAL DAMAGES (DEVER J, PATTERSON J) To make permissive actual damages and attorney's fees, to limit certain civil penalties, to allow respondents to recover attorney's fees in certain instances, and to exempt certain landlords from the housing provisions of the Ohio Civil Rights Law.

Current Status:   

5/5/2015 - House Financial Institutions, Housing and Urban Development Committee, (Second Hearing)

HB166

LOCAL TAX-FISCAL REVISIONS (GREEN D) To extend the deadline for filing an application for the homestead exemption or 2 1/2% property tax rollback to the end of the tax year, to require that auditors certify Local Government Fund allocations to subdivisions by regular or electronic, rather than certified mail, and to repeal laws requiring county auditors to issue permits for traveling shows, issue licenses for new merchandise public auctions, certify the annual state tax interest rate to local courts, and provide certain certifications related to the repealed personal property tax.

Current Status:   

5/5/2015 - House Ways and Means Committee, (First Hearing)

HB185

ARSON-PROPERTY OWNERSHIP (KOEHLER K) To eliminate lack of the property owner's consent as an element of arson when the property is abandoned real property and to make the consent of the owner of abandoned real property an affirmative defense.

Current Status:   

5/5/2015 - Introduced

SB84

FLAG-BANNER DISPLAY (COLEY W) To prohibit manufactured homes park operators, condominium associations, neighborhood associations, and landlords from restricting the display of Ohio flags and blue star banners, gold star banners, and other service flags, and to prohibit manufactured homes park operators and landlords from restricting the display of the United States flag.

Current Status:   

3/17/2015 - Senate State and Local Government Committee, (First Hearing)

SB85

PROPERTY-TAX COMPLAINTS (COLEY W) To limit the right to initiate most types of property tax complaints to the property owner and the county recorder of the county in which the property is located.

Current Status:   

3/4/2015 - Referred to Senate Ways and Means Committee

SB96

SATISFIED MORTGAGE PENALTIES (HUGHES J) To waive any penalty due with respect to unpaid property taxes resulting when a mortgage lender fails to notify the county auditor of a satisfied mortgage.

Current Status:   

3/24/2015 - Senate State and Local Government Committee, (First Hearing)

SB99

UNPAID WATER SERVICE-LIENS (BROWN E) Regarding property liens for unpaid county or municipal water service charges.

Current Status:   

3/10/2015 - Senate State and Local Government Committee, (First Hearing)

SB104

LIENHOLDER-RIGHT TO HEARING (TAVARES C) To provide owners and lienholders of insecure, unsafe, or structurally defective or unfit buildings with a right to a hearing before the board of township trustees proceeds to remove, repair, or secure the buildings.

Current Status:   

3/4/2015 - Referred to Senate State and Local Government Committee

SB108

RENTAL PROPERTY REGISTRATION (TAVARES C) To permit townships to require owners of residential rental property located within the township to register certain information with the board of township trustees.

Current Status:   

3/4/2015 - Referred to Senate State and Local Government Committee

SB113

REMEDIATION PROPERTY-ILLEGAL METH LAB (LAROSE F) To provide for the remediation of real property on which an illegal methamphetamine manufacturing laboratory has been discovered.

Current Status:   

3/10/2015 - Referred to Senate Health and Human Services Committee

SB118

MUNICIPAL AUTHORITY-HOUSEHOLD SEWAGE TREATMENT (EKLUND J) To enact section 3718.026 of the Revised Code to authorize a board of county commissioners or municipal legislative authority to elect to withdraw the county or municipal corporation from the application of any rule adopted after January 1, 2014, by the Department of Health governing the design of household sewage treatment systems.

Current Status:   

3/10/2015 - Referred to Senate Energy and Natural Resources Committee


Legislation

June 2016


To all Ohio Housing Providers: An Important Action Alert the "Meth Lab Remediation Bill" is Unfair and Costly to Housing Providers!

 

 OREIA has been fighting hard on your behalf to modify a state bill dealing with the remediation of meth labs.

    Senate Bill 113 would make landlords responsible for the clean-up costs of meth labs found in their rentals, even when the landlord had no knowledge of or responsibility for the crime. In fact, you'd be responsible for the costs--which can range from $5,000-$150,000--EVEN IF YOU JUST PURCHASED THE PROPERTY and the prior owner didn't know about or didn't disclose the issue.

    OREIA's Legislative Affairs Director, Dan Acton, has provided the committee with opponent testimony, and OREIA has proposed reasonable suggestions for modifying the bill to assist you with this expensive, possibly business-killing remediation.

     However, despite these efforts, the committee is attempting to pass the bill without change before July 1st, which means without your help, it could be Ohio law by late summer.

 What You Can Do to Stop This Threat 
to Your Business

   Please call (preferred) or email your State Senator and tell them to delay a vote on Senate Bill 113, sponsored by Senators LaRose and Beagle, until a mechanism for funding the required meth lab clean-up is created.

   Here's a guide to what to say or write:

  • I am a rental housing provider (with # of units). I oppose the Senate’s efforts to force me to pay for the crime scene clean-up caused by meth labs, which can cost anywhere between $5,000-$150,000.
  • The bill, as written, would punt the government’s current responsibility to thoroughly investigate and remediate these crime scenes onto the backs of innocent property owners. If there is a meth lab in one of my properties, I am the victim of a crime, not the perpetrator, and I should not be punished.
  • I am particularly concerned about buying and renovating bank-owned properties, because banks, under Ohio law, do not have to disclose that the property was used as a meth lab, even if they know it to be true. [my area] has too many of these abandoned, dilapidated properties as it is, and the extreme risk of loss presented by this bill would have a severe chilling effect on the private citizens who purchase and renovate these houses.
  • Senate Bill 113, as written, would force me to displace innocent tenants in multifamilies, causing me to lose significant rental income that I depend on to support my family, and possibly forcing me to give up the property in a foreclosure.
  • The science is inconclusive on the ability to “clean” a property and public health officials have stated in public forums that this law would be difficult to implement.
  • The Ohio Real Estate Investors Association (OREIA) has put forth reasonable solutions to create funding sources to clean-up meth labs and they have not been properly vetted by the sponsors or the committee.
  • The bill needs more time for review to work out the many issues with the bill.

Who do you call/email?

 

Republicans

BACON, Kevin 3rd District 614-466-8064             SD03@ohiosenate.gov

BALDERSON, Troy 20th District 614-466-8076     SD20@ohiosenate.gov

BEAGLE, Bill 5th District 614-466-6247                 SD05@ohiosenate.gov

BURKE, David 26th District 614-466-8049             SD26@ohiosenate.gov

COLEY II, William P. 4th District 614-466-8072     SD04@ohiosenate.gov

EKLUND, John 18th District 614-644-7718                         SD18@ohiosenate.gov

FABER, Keith 12th District 614-466-7584               SD12@ohiosenate.gov

GARDNER, Randy 2nd District 614-466-8060        SD02@ohiosenate.gov

HITE, Cliff 1st District 614-466-8150                       SD01@ohiosenate.gov

HOTTINGER, Jay 31st District 466-5838                 SD31@ohiosenate.gov

HUGHES, Jim 16th District 614-466-5981               SD16@ohiosenate.gov

JONES, Shannon 7th District 614-466-9737            SD07@ohiosenate.gov

JORDAN, Kris 19th District 614-466-8086             SD19@ohiosenate.gov

LAROSE, Frank 27th District 614-466-4823          SD27@ohiosenate.gov

LEHNER, Peggy 6th District 614-466-4538                         SD06@ohiosenate.gov

MANNING, Gayle 13th District 614-644-7613        SD13@ohiosenate.gov

OBHOF, Larry 22nd District 614-466-7505             SD22@ohiosenate.gov

OELSLAGER, Scott 29th District 614-466-0626     SD29@ohiosenate.gov          

PATTON, Thomas F. 24th District 614-466-8056     SD24@ohiosenate.gov

PETERSON, Bob 17th District 614-466-8156          SD17@ohiosenate.gov                      

SEITZ, Bill 8th District 614-466-8068                       SD08@ohiosenate.gov

UECKER, Joe 14th District 614-466-8082                SD14@ohiosenate.gov

WIDENER, Chris 10th District 614-466-3780          SD10@ohiosenate.gov

 

Democrats

BROWN, Edna 11th District 614-466-5204             SD11@ohiosenate.gov

CAFARO, Capri S. 32nd District 614-466-7182       SD32@ohiosenate.gov

GENTILE, Lou 30th District 614-466-6508             SD30@ohiosenate.gov

SAWYER, Tom 28th District 614-466-7041             SD28@ohiosenate.gov

SCHIAVONI, Joseph 33rd District 614-466-8285   SD33@ohiosenate.gov

SKINDELL, Michael J. 23rd District 614-466-5123 SD23@ohiosenate.gov

TAVARES, Charleta B. 15th District 614-466-5131SD05@ohiosenate.gov

THOMAS, Cecil 9th District 614-466-5980              SD09@ohiosenate.gov

WILLIAMS, Sandra R. 21st District 614-466-4857 SD21@ohiosenate.gov

YUKO, Kenny 25th District 614-466-4583                SD25@ohiosenate.gov

 

How do I find who my Senator is?

 Go to: https://www.legislature.ohio.gov/ and type in your Zip Code. You will be directed to your Senator

  If you email or leave a voice mail, please provide your name, address and phone number to ensure the possibility of follow-up.

Calls/emails must be completed ASAP, 
BUT NO LATER THAN June 30th 
for your voice to be heard.

If each member takes 5 minutes to act on this, we can make a huge impact on this bad bill. Don't depend on your fellow members to do this for you; take a moment now and make the contact.

And feel free to forward this to your fellow housing providers throughout the state, or use your social media to direct them to www.OREIA.com where this issue is outlined for them.

Thank you for your time in defending the real estate industry for ALL Ohioans!

Legislation

August 2016


A Huge Win for Housing Providers, Tenants, and FREEDOM.

 

Sept 2015 

The Southern District of Ohio today ruled that the City of Portsmouth’s occupational licensing requirements imposed upon landlords – – rental property inspections and licensing fees – – violates the Fourth Amendment to the United State Constitution.

  The OREIA-supported 1851 Center for Constitutional Law’s victory on behalf of Portsmouth rental property owners Ron Baker, Nancy Ross, Thomas Howard, and Darren Oliver means that indiscriminate and warrantless government inspections of rental properties are unconstitutional nationwide, and that unlawfully-extracted “rental inspection fees” must be returned to the rental property owners who paid them.

  These property owners had long rented their property in Portsmouth without license or inspections, and their properties had never been the subject of complaint by tenants, neighbors, or others. However, the City threatened to criminally prosecute and even imprison these landlords if they continued to rent their homes without first submitting to an unconstitutional warrantless search of the entire interior and exterior of these homes.

Judge Susan Dlott, of the Western Division of the Southern District of Ohio, held as follows:

  • “[T]he Court finds that the Portsmouth [Rental Dwelling Code] violates the Fourth Amendment insofar as it authorizes warrantless administrative inspections. It is undisputed that the [Rental Dwelling Code] affords no warrant procedure or other mechanism for precompliance review . . . the owners and/or tenants of rental properties in Portsmouth are thus faced with the choice of consenting to the warrantless inspection or facing criminal charges, a result the Supreme Court has expressly disavowed under the Fourth Amendment.”
  • “The inspections are also significantly intrusive. As the Supreme Court has noted, the ‘physical entry of the home is the chief evil against which the wording of the Fourth Amendment is directed.’”
  • “The search inspection sheet details eighty items to be inspected throughout the entirety of the rental property. The Court thus concludes that the intrusion is significant.”
  • “Taking into account the above factors—the significant expectation of privacy, the substantial intrusion into the home, and the inefficacy of the warrantless inspections on the proffered special need—the Court finds the warrantless inspections are unreasonable.”
  • “Having determined that the Code is not saved by special needs or the closely regulated industry exceptions, the Court concludes that the Code’s failure to include a warrant provision violates the Fourth Amendment.”

Both the United States and Ohio Supreme Court have invalidated warrantless inspections of rental property, and repeatedly held that warrantless administrative inspections of business property are generally invalid, absent exigent circumstances.

Nevertheless, Ohio cities had vigorously sought to collect licensing fees from area landlords, and the warrantless searches served as the lynchpin to each of these goals. Ordinances such as Portsmouth’s Rental Dwelling Code established an absolute prohibition on renting out property within a community – – even though the landlord may have long done so and even though his or her property may be in pristine condition – – without a government-approved license that cannot be acquired without first paying a $100 annual fee per rental home and submitting to an open-ended warrantless search of every area of the property, inside and out.

“The Federal Court’s ruling yesterday is a victory for all property owners and tenants. Local government agents do not have unlimited authority to force entry into Ohioans’ homes or businesses. To the contrary ‘houses’ are one of the types of property specifically mentioned by the Fourth Amendment; and Ohioans have a moral and constitutional right to exclude others, even government agents, from their property. Entry requires either a warrant or an emergency, and neither is present with respect to these suspicion-less rental inspections,” said Maurice Thompson, Executive Director of the 1851 Center.

“Government inspections of one’s home frequently results in arbitrary orders to make thousands of dollars worth of untenable improvements to even the most well-maintained properties. These enactments were nothing more than a set of back-door tactics to collect revenue on the backs of Ohio property owners, while attempting to chase ‘the wrong type of owners’ out of town.”

Read the Federal Court’s Order HERE

Support the ongoing fight against intrusive and unconstitutional mandatory inspections by donating to 1851 Center for Constitutional Law HERE


Legislation

August 2016


Legislative News: New Smoke Detector Rules Coming, Fair Housing and Nuisance Property Bills Move Forward

February promises to be an interesting month with the abbreviated Ohio Legislature calendar. OREIA continues to work on several bills of high importance, including the long awaited “Grybosky Bill”, which was introduced at the request of OREIA, National REIA, and the Ohio Apartment association.

We expect action on this bill later in the summer. The purpose of this is to bring fairness to the process of fair housing claims, particularly those brought by “testers” who are not in fact seeking housing, but who pose as people who are. The bill emphasizes education for first offenders while maintaining tough penalties for repeat offenders and the more egregious violations.

As you know, OREIA encourages members and member groups to educate themselves about fair housing law and about how to avoid discrimination, in part by offering the Ohio Professional Housing Provider (OPHP) designation that mandates a fair housing component.

At the same time, OREIA supports true fairness in fair housing, and has been actively seeking a letter from HUD to clarify that the current version of this bill will satisfy the “substantial equivalency threshold” to maintain funding for the Ohio Civil Rights Commission.

We also continue to work on the “nuisance bill(s)”, SB 201 and HB 126, which would give cities increased powers to declare rental properties nuisances because of the behavior of the tenants, and allow local governments to shut down such properties.

We’ve also been informed that a new bill will be introduced shortly dealing with smoke detectors. Following the lead of the City of Cincinnati, Ohio will soon propose that photoelectric smoke detectors be mandated in all rental properties.

We will be getting more guidance on this bill shortly; in the meantime, we suggest that you let your members know that they should strongly consider purchasing the photoelectric smoke detectors, rather than the more popular ionization type, when replacements are necessary.

Other recommendations to OREIA members and groups:

Please push to certify your members, or if you are a member, to GET certified, through the OPHP program. This coursework is proactive evidence we are educated professionals, and not the slumlords many local elected officials like to compare us to. With the many changes in Fair Housing and the questionable tactics used by a few of the testing agencies on questions of new classifications of accommodation that have not been proven in a court of law, every OREIA group should strive to bring in an expert on Fair Housing for the monthly meeting as soon as scheduling permits.

Respectfully submitted; Dan Action OREIA legislative coordinator

 


Legislation

August 2016

 

Ohio Cities' "Point of Sale" Home Inspections Unconstitutional

OREIA and 1851 Center for Constitutional Law move to protect Ohioans' property rights from unlawful searches and fees statewide

 

After months of effort and laying groundwork, one of OREIA's major goals for 2016--ending unconstitutional inspections for all Ohioans--is one step closer to begin achieved.

 

In partnership with the Ohio Real Estate Investors Association ("OREIA"), the Finney Law Firm in Cincinnati, and the law firm of Berns, Ockner & Greenberger in Cleveland, the 1851 Center for Constitutional Law today moved in federal court to immediately enjoin Ohio cities, and the Cities of Bedford and Oakwood in particular, from enforcing "point of sale" and "presale" programs that require citizens to endure and pass arbitrary and warrantless government inspections before they can sell their homes to even the most informed and willing buyers.

 

Such municipal ordinances, in addition to restricting Ohioans' property rights, subject homeowners to open-ended warrantless searches of every interior and exterior space of a home, violating the Fourth Amendment to the United States Constitution and Section 14, Article I of the Ohio Constitution.

 

The legal action against Bedford is filed on behalf of area landlord Ken Pund, who is forbidden from selling to his daughter a home that he owns and she already resides in, and John Diezic, who was prohibited from selling his Bedford home due to minor cracks in the asphalt of his driveway. In Oakwood, Plaintiff Jason Thompson was forced to pay for and undergo an inspection simply after making an alteration to the title of his property.

 

In each case, the City threatened to criminally prosecute and even imprison these homeowners if they sold their homes without first submitting to and passing city inspections.

 

 

Both the United States and Ohio Supreme Court have invalidated warrantless inspections of houses, absent consent or an emergency. Nevertheless, Ohio cities have vigorously sought to collect inspection fees and impose fines, and the point of sale inspection requirements are the lynchpin to this revenue stream - - homeowners, irrespective of whether they want or need the inspection, pay a $100 fee to fund the inspections, and then additional fees for "follow-up" inspections.

 

The lawsuit seeks to restore both Ohio homeowners' and small business owners' freedom from warrantless searches without probable cause. In doing so, the 1851 Center's Complaint explains the following:

 

• Government inspection of homes, even when for sale, requires a warrant, and these expansive warrantless searches, as "unreasonable searches" of "houses," violate Ohioans' Fourth Amendment rights.
• The Warrant Requirement is a significant protection for property owners, because a warrant can only be issued in light of serious and credible complaints about the property.
• Fees that are charged to fund these unconstitutional inspections are also unconstitutional; cities cannot require their payment, and must return past payments.
• In a prior 1851 Center victory, Baker v. Portsmouth, federal courts declared warrantless inspections of rental homes unconstitutional. The Fourth Amendment's protections should extend to inspections triggered by the marketing or sale of a home, just as they apply to inspections triggered by renting a home.
"Local government agents do not have unlimited authority to force entry into Ohioans' homes or businesses. To the contrary 'houses' are one of the types of property specifically mentioned by the Fourth Amendment; and Ohioans have a moral and constitutional right to exclude others, even government agents, from their property. Entry requires either a warrant or an emergency, and neither is present with respect to these suspicionless inspections," said Maurice Thompson, Executive Director of the 1851 Center.

"The right to own property in Ohio has little value if local governments can continuously chip away at one's right to actually make use of that property, requiring government permission slips for basic arrangements such as the sale of one's home to a willing buyer." In Bedford, the City maintains the power to block sales on account of "architectural style and detail," "color," and lack of "orderly appearance." In Oakwood, the City concedes "the inspection will seldom, if ever, reveal latent defects or violations of the Property Maintenance Code which are not readily apparent. Neither should owners nor prospective owners or occupants rely entirely upon our inspection regarding the house or accessory structures or fixtures."
Read the Property Owners' Complaint HERE
Read the Property Owners' Motion for Preliminary Injunction HERE
###
The 1851 Center for Constitutional Law is a non-profit, non-partisan legal center dedicated to protecting the constitutional rights of Ohioans from government abuse. The 1851 Center litigates constitutional issues related to property rights, regulation, taxation, and search and seizures.


Legislation

August 2016

 

Sexual Orientation May Join Ohio's List of Protected Classes

A pair of Ohio House Democrats, Reps. Denise Driehaus of Cincinnati and Nickie Antonio of Lakewood held a press conference recently push HB 389, which would prohibit discrimination in employment and housing based on sexual orientation. The bill had one hearing in May and is the fourth version of this bill in recent sessions. “The citizens seem to be on the side of equality, opportunity, and freedom whereas the legislature doesn’t necessarily reflect what their constituents are saying,” Rep. Driehaus said. Rep. Driehaus said local communities are increasingly passing nondiscrimination ordinances and that 80 of the top 90 employers in Ohio have policies prohibiting such discrimination based on sexual orientation.
There is no indication that the bill will advance during the lame duck session. As usual, ACREIA & OREIA will keep you abreast of any future developments in this and other housing-related bills.


Legislation

June 2015

To all Ohio Housing Providers:
An Important Action Alert
the “Meth Lab Remediation Bill”
is Unfair and Costly to Housing Providers!

OREIA, has been fighting hard on your behalf to modify a state bill dealing with the remediation of meth labs.

    Senate Bill 113 would make landlords responsible for the clean-up costs of meth labs found in their rentals, even when the landlord had no knowledge of or responsibility for the crime. In fact, you’d be responsible for the costs–which can range from $5,000-$150,000–EVEN IF YOU JUST PURCHASED THE PROPERTY and the prior owner didn’t know about or didn’t disclose the issue.

    OREIA’s Legislative Affairs Director, Dan Acton, has provided the committee with opponent testimony, and OREIA has proposed reasonable suggestions for modifying the bill to assist you with this expensive, possibly business-killing remediation.

However, despite these efforts, the committee is attempting to pass the bill without change before July 1st, which means without your help, it could be Ohio law by late summer.

 What You Can Do to Stop This Threat
to Your Business

Please call (preferred) or email your State Senator and tell them to delay a vote on Senate Bill 113, sponsored by Senators LaRose and Beagle, until a mechanism for funding the required meth lab clean-up is created.

Here’s a guide to what to say or write:

  • I am a rental housing provider (with # of units). I oppose the Senate’s efforts to force me to pay for the crime scene clean-up caused by meth labs, which can cost anywhere between $5,000-$150,000.
  • The bill, as written, would punt the government’s current responsibility to thoroughly investigate and remediate these crime scenes onto the backs of innocent property owners. If there is a meth lab in one of my properties, I am the victim of a crime, not the perpetrator, and I should not be punished.
  • I am particularly concerned about buying and renovating bank-owned properties, because banks, under Ohio law, do not have to disclose that the property was used as a meth lab, even if they know it to be true. [my area] has too many of these abandoned, dilapidated properties as it is, and the extreme risk of loss presented by this bill would have a severe chilling effect on the private citizens who purchase and renovate these houses.
  • Senate Bill 113, as written, would force me to displace innocent tenants in multifamilies, causing me to lose significant rental income that I depend on to support my family, and possibly forcing me to give up the property in a foreclosure.
  • The science is inconclusive on the ability to “clean” a property and public health officials have stated in public forums that this law would be difficult to implement.
  • The Ohio Real Estate Investors Association (OREIA) has put forth reasonable solutions to create funding sources to clean-up meth labs and they have not been properly vetted by the sponsors or the committee.
  • The bill needs more time for review to work out the many issues with the bill.

Who do you call/email?

 

Republicans

BACON, Kevin 3rd District 614-466-8064             SD03@ohiosenate.gov

BALDERSON, Troy 20th District 614-466-8076     SD20@ohiosenate.gov

BEAGLE, Bill 5th District 614-466-6247                 SD05@ohiosenate.gov

BURKE, David 26th District 614-466-8049             SD26@ohiosenate.gov

COLEY II, William P. 4th District 614-466-8072     SD04@ohiosenate.gov

EKLUND, John 18th District 614-644-7718                         SD18@ohiosenate.gov

FABER, Keith 12th District 614-466-7584               SD12@ohiosenate.gov

GARDNER, Randy 2nd District 614-466-8060        SD02@ohiosenate.gov

HITE, Cliff 1st District 614-466-8150                       SD01@ohiosenate.gov

HOTTINGER, Jay 31st District 466-5838                 SD31@ohiosenate.gov

HUGHES, Jim 16th District 614-466-5981               SD16@ohiosenate.gov

JONES, Shannon 7th District 614-466-9737            SD07@ohiosenate.gov

JORDAN, Kris 19th District 614-466-8086             SD19@ohiosenate.gov

LAROSE, Frank 27th District 614-466-4823          SD27@ohiosenate.gov

LEHNER, Peggy 6th District 614-466-4538                         SD06@ohiosenate.gov

MANNING, Gayle 13th District 614-644-7613        SD13@ohiosenate.gov

OBHOF, Larry 22nd District 614-466-7505             SD22@ohiosenate.gov

OELSLAGER, Scott 29th District 614-466-0626     SD29@ohiosenate.gov

PATTON, Thomas F. 24th District 614-466-8056     SD24@ohiosenate.gov

PETERSON, Bob 17th District 614-466-8156          SD17@ohiosenate.gov

SEITZ, Bill 8th District 614-466-8068                       SD08@ohiosenate.gov

UECKER, Joe 14th District 614-466-8082                SD14@ohiosenate.gov

WIDENER, Chris 10th District 614-466-3780          SD10@ohiosenate.gov

 

Democrats

BROWN, Edna 11th District 614-466-5204             SD11@ohiosenate.gov

CAFARO, Capri S. 32nd District 614-466-7182       SD32@ohiosenate.gov

GENTILE, Lou 30th District 614-466-6508             SD30@ohiosenate.gov

SAWYER, Tom 28th District 614-466-7041             SD28@ohiosenate.gov

SCHIAVONI, Joseph 33rd District 614-466-8285   SD33@ohiosenate.gov

SKINDELL, Michael J. 23rd District 614-466-5123 SD23@ohiosenate.gov

TAVARES, Charleta B. 15th District 614-466-5131SD05@ohiosenate.gov

THOMAS, Cecil 9th District 614-466-5980              SD09@ohiosenate.gov

WILLIAMS, Sandra R. 21st District 614-466-4857 SD21@ohiosenate.gov

YUKO, Kenny 25th District 614-466-4583                SD25@ohiosenate.gov

 

How do I find who my Senator is?

Go to: https://www.legislature.ohio.gov/ and type in your Zip Code. You will be directed to your Senator

If you email or leave a voice mail, please provide your name, address and phone number to ensure the possibility of follow-up.

Calls/emails must be completed ASAP,
BUT NO LATER THAN June 30
th
for your voice to be heard.

If each member takes 5 minutes to act on this, we can make a huge impact on this bad bill. Don’t depend on your fellow members to do this for you; take a moment now and make the contact.

And feel free to forward this to your fellow housing providers throughout the state, or use your social media to direct them to www.OREIA.com where this issue is outlined for them.

Thank you for your time in defending the real estate industry for ALL Ohioans!

 

OREIA Newsletter for Summer 2014

THE ORIEA PRESPECITIVE ON OHIO SENATE BILL 349

June 12th 2014

This Tuesday Matt Whitehead, our lobbyist, and I met with Senator William Seitz on Senate Bill 349. This is the bill that addresses the issue of clarifying Ohio Law as to the use of Fair Housing Testers of discrimination issues and fines/fees, punitive damages as related to Federal Fair Housing Law. As relates to the Helen Grobosky issue referred in the National REIA news release and in the memo of Senator Seitz to his fellow state senators.
Since Senator William Seitz on Senate Bill 349 bill has emerged, the Grobosky Bill. There have been attempts made by the leadership of the National Association of Fair Housing Alliance to reach its members and associates in Ohio as a bad bill. But, when one uncovers the underlying issues behind it. it is much more complicated than they present. And this, this, its detractors, are not addressing.
In 2008, Ohio Law was changed and, in so doing, does not to mirror Federal Civil Rights Law. It appears, that in federal law, there is some understanding that small landlords of very few units or single families –less than four units may not be sophisticated enough on all matters of law as those with more expansive units and history in the business. Those attacking Senator Seitz;s bill will probably not mention this. They haven’t yet. Nor, will they mention that the Ohio Civil Rights Commission reversed to a few hundred dollars of the $100,000 costs of fees that Mrs. Grobosky was burdened with. Nor, will they mention, that if a landlord defends oneself in court and wins will be paying the State of Ohio legal fees for the privilege of exercising a constitutional right of fair trial. They will not mention that in Ohio Appellate Court’s judges questioned the state’s attorney as to whether the damages levied through an action by same FHA who made charges against Mrs. Grobosky, against another small landlord did not equate itself with actual damage and even hinted about agencies working cooperatively with land lords.
The President of the National Real Estate Investors Association, who directs the Miami Valley Housing Association, is being quoted in several new articles in terms that imply that land lords are all in need of regulation in terms implying that all land lords are guilty of something. What, then, of the cooperation of our local associations members and their FHAs? This is a sad turn.

To: All Senate Members
From: Senator Bill Seitz
Date: June 12, 2014
Re: Co-Sponsorship Request

I will soon be introducing legislation that will mirror federal fair housing laws in terms of the relief allowed to fair housing organizations under Ohio fair housing laws. Ohio law has created an environment that incentivizes fair housing organizations to aggressively file discrimination charges against housing providers, whether there is an actual injured party or not, and force the provider into settling the case since fighting the charges is a costly and lengthy judicial procedure. Such is the case of Helen Grybosky, whose story was brought to my attention by former State Senator Kevin Coughlin and the National Real Estate Investors Association:
In 2008, the 76 year old Helen Grybosky, a housing provider, was subjected to undercover testers from the Fair Housing Resource Center (FHRC), a private non-profit organization, on eight separate occasions posing as fictitious applicants with fictitious familial factors and medical conditions. FHRC later filed two complaints with the United States Department of Housing and Urban Development alleging discrimination against Ms. Grybosky on the grounds of disability and familial status. HUD sent the complaints against Ms. Grybosky to the Ohio Civil Rights Commission (OCRC) for a probable cause investigation for alleged damages. Because Ohio law imposes mandatory attorney fees and mandatory damages in cases such as this, whether egregious or justified, OCRC in 2013, five years after the original complaints were unjustly filed (these cases are required to be resolved within one year), ruled that Ms. Grybosky pay $100 in actual damages and over $9000 in attorney fees. When all was said and done, she owed over $40,000 in attorney fees to defend this action.
Ms. Grybosky is one of many housing providers who are subjected to such claims where there is no injured party filing claim of discrimination. The case against Ms. Grybosky was raised by the FHRC, NOT an actual individual with real disabilities or specific needs associated with their familial situation. To combat such egregious cases and to ensure that such cases of actual discrimination are filed and dealt with appropriately, my legislation mirrors federal law in three regards:

1) Make actual damages, attorney fees, and punitive damages discretionary;
2) Allows respondents to recover attorney fees if they are the prevailing party; and
3) Exempt housing providers who own fewer than four units from the section.

This legislation will also prohibit actual or punitive damages from being awarded to a fair housing agency, and allow for punitive damages to only be awarded in cases of actual malice, and limit punitive damages to no greater than twice the amount of the actual damages just as we have done in Ohio’s tort law statutes. Furthermore, punitive damages are not to exceed $5000 on the first offense. Through these changes, we hope to level the playing field between the government, fair housing advocates, and housing providers.
If you are interested in co-sponsoring this legislation please contact my Legislative Aide, Alex Lapso, at 614-466-8068 or seitz@ohiosenate.gov by 4:30pm on June 19, 2014.

FOOTNOTE; THE BILL IS RECEIVING CO-SPONSORS.

 

FOR IMMEDIATE RELEASE
July 2, 2014

MEDIA CONTACT
Maurice A . Thompson
(614) 340-9817
MThompson@OhioConstitution.org

Legal Center to High Court: Cleveland-Area Stormwater Tax Unconstitutional

Northeast Ohio Sewer District tax on “impervious surfaces” is without legislative authorization, and is a property tax without the required voter approval

Columbus, OH – The 1851 Center for Constitutional Law late yesterday submitted to the Ohio Supreme Court its Merit Brief asserting that the Northeast Ohio Regional Sewer District, a Cleveland-Akron area administrative agency, lacks authority to regulate property in response to rainwater, which is not sewage, and even if it has such authority, may not impose a stormwater-related tax without a vote.

The Sewer District seeks to levy a tax on “impervious surfaces” on hundreds of thousands of Northeast Ohio residential and business property owners. These surfaces include roofs, patios, driveways, and parking lots, and are taxes levied based upon the square footage of each. The District maintains that this is a means of addressing rain-related erosion, run-off, and flooding.

Although such districts’ authorities often claim that settlement agreements with the federal EPA mandate such programs, such settlements mandate no particular course of action and do not permit agencies to transgress the Ohio Constitution.

Joining the 1851 Center on the Brief is the Ohio Real Estate Investors Association. Objecting to the taxes and regulations are several Cleveland-area municipalities, as well as numerous property-owner and business organizations, including the Ohio Council of Retail Merchants, Greater Cleveland Association of Building Owners and Managers, and the Cleveland Automobile Dealers Association.

The 1851 Center’s amicus brief argues that a sewer district, as an administrative agency of defined and limited powers, has no authority to impose taxes and regulations related to rainwater falling from the sky, i.e. something other than sewage. The brief further maintains that even if the agency had power to address rainwater, it may not tax property owners because the Ohio Constitution prohibits the raising of property taxes without voter approval through a tax levy election.

The 1851 Center’s brief asserts the following:

Pursuant to the Ohio Constitution, the General Assembly can only confer administrative power on an agency, and such agencies may not make policy.

The Northeast Ohio Regional Sewer District seeks to manage stormwater – – rain, essentially. The legislature, however, fully aware that it rains and snows in Cleveland, gave the Sewer District no such authority.

The Sewer District maintains no power to levy a tax without voter approval.

Although labeled a “fee,” the stormwater fee meets the legal standards of a tax because it is levied without regard to use, on certain property owners who gain no particular benefit from paying it, to advance goals that benefit the general public.

“Agencies like this are entirely unaccountable to the public, and this case stands for the principles that such agencies cannot take control of every facet of our lives, down to rainwater and the size of our patios, while taxing development in a manner that punishes and discourages it, with no regard to economic factors or public approval,” said Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law.

“The Sewer District’s tax on impervious surfaces, including nearly every patio, rooftop, and driveway in Northeast Ohio, bares a far closer resemblance to sewage than does rainwater, and the District must consider less invasive methods to dealing with rain, which we have managed to deal with without taxation for all of human civilization.”

Oral arguments will likely take place in the fall.

Read the Amicus Brief here.

Finance Reform Legislation hurts private property owners

by: Keith Knapp

The freedom to freely enter into contract for the purpose of selling your own property may soon be deemed illegal if language currently located in HR 4173 – Wall Street Reform and Consumer Protection Act finds its way into the text of S 3217 – Restoring American Financial Stability Act of 2010. These two pieces of legislation were the focus of National REIA’s recent Day on the Hill efforts, which were successful, but considering the timeliness of the debate surrounding S 3217, as is most reasonably highlighted by the appearance of its sponsor, Senator Chris Dodd (D-CT) on yesterday’s edition of Meet the Press, it is imperative to remain diligent in our efforts to protect our industry.

In 2009, language requiring private property owners who would seek to sell their own property with ’seller financing’ to be subject to the same licensing, ongoing testing, bonding, proof of net worth and reporting required of professional mortgage loan originators passed the House of Representatives by a very slim margin. Fortunately, S 3217 does not include the same language currently, and as the bill is scheduled for a floor vote, by order of cloture, today, it appears as though it will be left out of the bill.

In the case that Senate bill and the House version (HR 4173) are at odds, the two bills will likely be discussed in conference committee where it will be our goal to have the language referenced below removed:

(E) does not include, with respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of 1 property in any 36-month period, provided that such loan-

(i) is fully amortizing;
(ii) is with respect to a sale for which the seller determines in good faith and documents that the buyer has a reasonable ability to repay the loan;
(iii) has a fixed rate or an adjustable rate that is adjustable after 5 or more years, subject to reasonable annual and lifetime limitations on interest rate increases; and
(iv) meets any other criteria the Federal banking agencies may prescribe;

The Anti-Predatory Lending provision is aimed at protecting consumers and individuals, but this provision could directly impact, negatively, more than 26,000 families, each year, which is the number of families who benefit from seller financing per every one percent of investment properties sold.

CLICK HERE for more information about the Economic Impact of Seller Financing.

In order to propel the fight against this potentially harmful legislation National REIA would ask that you contact your Congressman and Senators, NOW, to inform them of your opposition to the efforts to require private property owners to secure and maintain the same licensing as mortgage loan originators who loan money every day for a profession. It is important to note the negative impact that these efforts, if passed, will have on the same consumers that the Anti-Predatory Lending legislation is supposed to be protecting. Also, highlight that you are not opposed to the regulation of the mortgage industry at large, only of private property owners who would seek to offer terms of sale of a property for monthly payments in exchange for equity.

CLICK HERE for a SAMPLE LETTER to be sent to your legislator.

To find your Congressman visit http://www.house.gov and put in your zip code in the top left hand corner of the screen.

To find your Senators, visit http://senate.gov/general/contact_information/senators_cfm.cfm.

New Lead Paint Regulations to take Effect April 22, 2010

by: Keith Knapp

New EPA Lead Regulations scheduled to take effect on April 22, 2010 will dramatically affect Landlords, Renovators, and Investors. There is a new EPA program called “Renovate Right” that applies to virtually every housing provider and trades contractor in the country, with some narrowly drawn exceptions. The penalty for a single violation is about $35k. There is a lot to know about these new regulations and in order to be prepared for the changes we encourage everyone to visit:

http://www.epa.gov/lead/pubs/renovation.htm, and

http://www.epa.gov/EPA-TOX/2008/June/Day-26/t14507.htm

and read everything and download what you need for printing and study.

Also, the Student Manual and Instructor Manual for the New Lead Paint regulations can be found below.

Student Manual EPA-740-R-09-002 (312 pages)

http://www.epa.gov/lead/pubs/rrp_8hr_studentmanual_feb09.pdf

Instructor Manual EPA-740-R-09-001 (434 pages)

http://www.epa.gov/lead/pubs/rrrp_8hr_instructormanual_feb09.pdf

Please do not hesitate to voice your opinion regarding these regulations with your legislators on a local, state and federal level. While these regulations have already been approved, the more our leaders at capitals across the country know how negatively actions like this affect our Industry the better.

Member of OREIA

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