Ohio's D.O.L.L.A.R. Deed Program

The 131st Ohio General Assembly is currently considering new legislation to give individuals and families another opportunity to stay in their homes and avoid foreclosure after default on a mortgage loan.

House Bill 303 would create the D.O.L.L.A.R. Deed Program, established in part by the Ohio Housing Finance Agency. Under the new program, if the borrower defaulted on a mortgage loan, the borrower and lender would enter into an agreement in which the borrower transfers his interest in the property to the lender by way of a deed in lieu of foreclosure. In return, the lender would then rent the property back to the borrower for a specified period of time. During the lease term, the borrower would be able to repurchase or refinance the property.

House Bill 303 was passed by the House on December 8, 2015 and is currently under consideration by the Senate Committee on Financial Institutions.

Arkansas Law of Damages Released

One of our attorneys, Christian H. Brill, and his father, Prof. Howard W. Brill recently published the 6th edition of Law of Damages, a comprehensive treatise on damages law in Arkansas. The volume is now available for purchase from Thomson Reuters.

Completely rewritten for the first time in more than a decade, the 6th edition of Law of Damages covers both the general principles of damages law in Arkansas and the damages relating to substantive principles of the law.

Part one treats damages generally, discussing damages in their many forms. Part two puts these varieties into perspective, relating them to substantive areas of the law.

The text also:

• Provides in-depth discussions of different types of damages, including punitive damages, compensatory damages, attorneys fees, interest, and costs
• Includes instruction on procedural and evidentiary aspects of proving and calculating damages
• Discusses application of statutes and case law regarding damages to specific fields of law

With over 4000 judicial decisions and numerous statutory and secondary references, the new edition comprehensively covers Arkansas law. It includes expanded sections on compensatory damages, apportionment of damages, attorney fees, contracts, real property, restitution and wrongful death.

Previous editions have been cited over 200 times by Arkansas state and federal courts. As it has for 30 years, the volume will continue to be an essential text for every Arkansas attorney’s book shelf, and will serve as a tool for bench and bar.

Brill, an Arkansas and Ohio attorney, has been practicing with Mallory Law Office, LLC since 2013.

Nonresident Commercial Real Estate Brokers

Ohio law requires a real estate broker’s license before an individual or entity can sell, rent, lease, or manage property in return for a fee. However, an important exception does exist for commercial real estate brokers who are located outside the state.

Ohio Revised Code 4735.022 permits an out of state broker who is actively licensed in another state to act as a broker in Ohio without obtaining a license if certain conditions are met. The out of state broker may act as a broker in Ohio if it works in cooperation with a licensed Ohio broker.

The two parties must sign a written agreement detailing the terms of cooperation, and the out of state broker must agree to follow Ohio law, submit to the jurisdiction of Ohio courts, and provide an out of state certificate of good standing. Documents and trust funds must be held by the Ohio broker, and importantly, the name of the Ohio broker must be included on all advertising.

The Ohio Association of Realtors has more information on the topic, as well as a sample agreement.

After the Lease Expires: Holdover Tenants

In a general month-to-month tenancy in Ohio, the landlord must give a tenant at least thirty (30) days notice of termination prior to the periodic rental date, which is the date on which rent is due. For example, if monthly rent is due on May 1, the landlord must give notice on or before April 1. If the landlord does not give notice until April 3, however, the tenant can stay until May 31.

But what happens if notice is given but the tenant does not leave? A landlord can either 1) have the tenant evicted or 2) accept payment from the holdover tenant. (Baltimore & Ohio RR. Co. v. West, 57 Ohio St. 161, 165-166 (1897)). If a lease expires and the tenant continues to pay rent, and the landlord continues to accept the rent payment, the “holdover tenant” has created a new periodic tenancy.

The length of the term of the new tenancy is based on the expired lease. A lease that provided for annual rent will be held as a year-to-year tenancy, and one that required rent to be paid monthly will be a month-to-month tenancy. A provision that states an annual Base Rent payable in equal monthly installments is considered, under Ohio law, a year-to-year tenancy. (Cesta v. Manfredi, 101 Ohio App.3d 326, 329 (1995)).

For example, imagine a tenant who rents a commercial space for $12,000 annually (payable in monthly installments) from June 1, 2012 until May 31, 2013. If the tenant continues to pay rent after the lease expires, and the rent is accepted by the landlord, a new one year term is created. Assuming the tenant is still paying the annual rent in equal $1000 monthly installments, he can argue that a year tenancy was created and can occupy the premises until May 31, 2014, regardless of when notice to vacate is given by the landlord. If the holdover tenant vacates prior to the end of the term, the landlord can require him to pay the annual $12,000 that is due for the entire new term, but the landlord is still under a duty to mitigate damages, including finding a new tenant.

As always, it is essential for both landlords and tenants – particularly in commercial settings – to ensure that their lease has a well-drafted holdover clause.

Landlords Must Keep Premises Safe for Guests

The Ohio Supreme Court has ruled that landlords have the same duty to the guests of tenants as they do to tenants to keep their common areas safe. 
 
The case in question, Mann v. Northgate Investors, L.L.C., grew out of a 2007 incident in which a woman visited her friend's Columbus apartment.  When leaving at night, she fell down a stairwell that lacked adequate lighting and was severely injured.
 
In the February 12 decision, the court unanimously agreed that a landlord's duty under Ohio law to “[k]eep all common areas of the premises in a safe and sanitary condition” also extends to guests of tenants. Violation of this duty is negligence per se.

For more, read the full opinion or the Columbus Dispatch report on the case.

A Tenant's Unpaid Water Bill: Who's Responsible?

Imagine this scenario. A tenant suddenly vacates her apartment and moves out of state, leaving her water bill unpaid. Who is liable for the outstanding bill?

Under Ohio law, landlords can be held responsible for a tenant’s unpaid water bills. A municipality has the power to place a lien on the property and collect the payment through property taxes or bring a lawsuit against the property owner to recoup the money.

Unpaid bills can mean a large financial loss for the city, so government leaders have a high incentive to collect. For example, a 2013 investigation in Toledo found that the city was owed almost $24 million in unpaid water bills.  If cities seek to recover these missing funds from property owners, a landlord's credit and bottom line can both be affected.

As a result, landlords should take some proactive steps to protect themselves and reduce their liability for a tenant's delinquent bills, such as:

1. Perform credit checks on prospective tenants as part of a background check. This can eliminate potentially risky tenants who might be unable to pay a bill. 
2. Consider requiring a co-signer for some tenants, such as students with limited income. 
3. Rather than putting water service in the tenant's name, put the service in the landlord's name and charge additional rent to cover the cost of water. 
4. Modify the lease to make a continued tenancy contingent on the payment of water bills. If the tenant does not pay the water bills, landlords may be able to begin eviction proceedings. 
5. In order to monitor and prevent potential problems, ask the utility company to send the landlord a copy of the tenant’s monthly bills.
6. Educate and encourage tenants to check for leaks or prevent wasteful water practices in order to reduce the possibility of unusually high bills.

Can You Hear Me Now? Leasing Property for Cell Towers

In addition to leasing property for mineral extraction, landowners may be approached by wireless companies proposing to lease the individual’s property for a cell tower site. As with any lease or contract, property owners can negotiate the terms to ensure the agreement is a win for both sides.

One of the most scrutinized provisions of the lease is the monthly rate paid to the property owner by the wireless company. As you might expect, rates vary widely. Essentially, the more valuable your land is to the company, the higher the monthly rate.

A variety of factors influence the demand for the land, and thus its value. For example:

1. Where is the site located? As with any commodity, demand drives price. Sites that are in heavily urban areas or along busy highways may bring a higher rate due to the number of potential wireless users.
   
2. Are there available alternative sites? A landowner has an advantage if he owns the best site in a twenty mile radius.
3. How expensive is construction of the tower? A freestanding tower will likely cost more than simply adding an antenna to an existing church steeple. Topography of the land or existing availability of utilities can also affect cost.
   
4. How long will the approval process take? If the community’s zoning or development approval is minimal and straightforward, the wireless company can more quickly place the tower into service.

Of course, monthly rates are not the only provision of a cell tower lease to consider. To make sure you are maximizing your lease potential, please consult an attorney.