Just The Facts, Ma'am: Recording an Affidavit Related to Title

Ohio law permits anyone knowledgeable about facts which may affect the title to property to record an Affidavit of Facts Relating to Title with the county recorder.  This affidavit serves as evidence of facts and matters that have a bearing on title to the property.

The statute allows the affiant to state facts about a wide variety of matters, such as birth and death, the identity of parties, possession of the property, the location of physical features such as fences or streams and, most broadly, "[t]he happening of any condition or event that may create or terminate an estate or interest" in the property.

An Affidavit of Facts Relating to Title warns potential purchasers that another party may have an interest in the real estate.  Before purchasing a property, it is wise to do a comprehensive title search to ensure that you will receive clean title to the real estate.

Ohio Real Estate Tax Exemptions For Places Of Worship

Article XII Sec. 2 of the Ohio Constitution permits the enactment of general laws exempting from taxation public school houses, houses used exclusively for public worship, institutions used exclusively for charitable purposes, and public property used exclusively for any public purpose. Pursuant to this authority, the Ohio Legislature enacted Ohio Revised Code (the “ORC”) §5709, “Taxable Property – Exemptions.”

Church tax exemptions are found in ORC §5709.07. The ORC defines “Church” to mean a fellowship of believers, congregation, society, corporation, convention, or association that is formed primarily or exclusively for religious purposes and that is not formed for the private profit of any person. R.C. §5709.07(D)(1). A church can be exempt from taxation under ORC §5709.07(A)(3) if the real property owned and operated by the church is “used ordinarily for public worship.” Beth Hamidrosh Hagodol v. Kinney, 16 Ohio App. 3d, 474 N.E.2d 658 (1984).

There are a few important mentionables: (1) A church that is both a religious institution and a charitable institution cannot receive both tax exemptions under ORC §5709.12 and §5709.121. Mt. Calvary Evangelical Lutheran Church v. Kinney, 19 Ohio App. 3d 267, 483 N.E.2d 1199, 1984 Ohio App. LEXIS 11301 (Ohio Ct. App., Montgomery County 1984); (2) Property which is owned by a church and leased to another church for church purposes is exempt from taxation. New Jerusalem Soc. v. Richardson, 10 Ohio N.P. 214 (1910); (3) Partial exemptions are allowed - that is, ORC §5713.04 permits real property to be split into “exempt” and “nonexempt” if those parts can be precisely delineated (i.e., first floor and second floor). Faith Fellowship Ministries, Inc. v. Limbach, 32 Ohio St. 3d 432, 513 N.E.2d 1340, 1987 Ohio LEXIS 403 (Ohio 1987); (4) Where a church is being reconstructed (i.e., torn down and rebuilt) and if within a reasonable period of time, the church does not lose its tax exemption. In re Ohave Scholem Congregation, 156 Ohio St. 183, 46 Ohio Op. 56, 101 N.E.2d 767 (1951); (5) Lastly, if a church purchases vacant land with the intent to use the property exclusively for public worship and there is evidence of prepared plans and available funds that establish this intent, then that land is entitled to a tax exemption. Peoples Faith Chapel, Inc. v. Limbach, 18 Ohio St. 3d 236, 480 N.E.2d 781, 1985 Ohio LEXIS 442 (Ohio 1985).

Traditionally, places of “public worship” are often thought of as churches, synagogues, and the like. In other words, they are physical, tangible places where people go to worship. However, the Ohio Supreme Court recently ruled that “public worship” can also extend to property owned to further gospel through music, preaching and teaching radio programs. Specifically, Christian Voice of Central Ohio, most famously known for their radio station, WCVO’s 104.9 “The River,” was granted a tax exemption for the property upon which their radio stations existed upon. In the opinion, Justice Sharon Kennedy wrote that Christian Voice functioned as a place of “public worship” because the non-profit dedicates all its land and buildings to charity and religion -- it has all the necessary attributes of a church, minus the physical presence of a traditional church. Ultimately, the Court interpreted ORC §5709.07 broadly and held that institutions can embody and perpetuate the meaning of “public worship” even though they may not have the physical presence of a church on their property.

The information presented is for information purposes only and is not intended to be legal advice, and it should not be acted upon as such. It also does not constitute advertising or solicitation.

This post was prepared with the assistance of Lauren Augostini, a student at Capital University Law School.

Do You Know Your Surface Water Rights?

Spring is coming, and that means a lot of rain in my part of the country. This reminds me of some issues that have come up with clients who were surprised to when their backyards flooded what the law of surface water rights is.

The Supreme Court of Ohio has held that land of a lower elevation is burdened with a "servitude" to receive the natural flow of surface water from land of a higher elevation. That means that your neighbor with the higher ground has an implied right to allow his or her surface water to flow onto your property. But, do you have to take it? Yes ... well mostly. You only have to take that surface water onto your property so long as it comes in its natural state and quantity, and only so long as the flow of that surface water has not been altered by some artificial means. Your uppity neighbor cannot manage his or her flooding problems by building a channel that captures or redirects surface water and then causes it to flow as a stream onto your property.

Somewhat different rules apply if your land is considered to be in an urban location versus a rural location. The cases have not developed distinctions in the definitions of urban versus rural, so it is best to speak to a lawyer if you have questions.

Is Your Property Fairly Taxed?

Every year, Ohio counties assess a property’s real estate taxes based on the market value the county places upon the property. However, the county's assessed value does not always accurately reflect the property’s true market value.

Ohio law gives property owners the right to challenge the value the county has placed upon their property if they feel it is in excess of the true market value by filing a complaint against the property's value with the county auditor. That complaint must be submitted by March 31, 2016.

If you believe your property is not valued correctly, please contact our office to discuss whether it is in your best interest to file such a complaint, keeping in mind the deadline of March 31, 2016.

Property Deed Restrictions: Are They Enforceable?

When transferring property, an owner may wish to place certain restrictions in the deed to limit the new owner’s use of the property. Such restrictions typically “run with the land” – meaning they are not personal to the owner and will affect future owners.

Typical deed restrictions are the following:

• Grantee retains the right to use the land for hunting purposes.
• The Property may not be rented or leased to any third party. 
• Only one single-family residence is permitted on the Property. 
• No trees may be removed from the three acres of the Property bordering Buckeye Creek. 
• Grantee retains the right of first refusal and option to purchase, in the event Grantee wishes to sell the Property to a third party. 

While most deed restrictions are valid, those that are against public policy are unenforceable. For example, restrictions that bar the grantee from transferring the property are considered a restraint on alienation because they prevent the free flow of property. A restriction that limits transfer of the property to buyers of a certain race is invalid.

Ohio’s legislature and judiciary have also looked at specific restrictions in recent years. In 2003, the Ohio General Assembly amended the statutes to specifically provide that deed restrictions prohibiting flagpoles or the display of the American flag were invalid. In 2012, the Ohio Supreme Court held that a public school district could not sell a vacant school building for sale with a deed restriction preventing the property to be used for school purposes, because Ohio’s public policy supports community schools.

Sellers should consider whether they should insert deed restrictions into the transfer documents, particularly in cases in which they will live nearby or gain some value from the restrictions (be it a protected view, the option to buy back the property, or some other benefit). Likewise, before purchasing property, buyers should hire a reputable company to perform a title search to make sure that they are informed about any existing deed restrictions on the property.

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.