For many years, my real estate clients engaged in transactions throughout the country complained that they had greater challenges completing transactions in Ohio than in other state. I represented many clients in prolonged litigation in Ohio over seemingly minor title issues. When I served as president of the Ohio Land Title Association from 2010-2011, I decided it was time to do something about it. The association gathered title cure statutes from all 50 states and I closely analyzed them to identify what worked well. Thus began my seven-year journey to overhaul Ohio’s title cure statute, which hadn’t been updated in 50 years. The development community had a lot at stake in this debate, and NAIOP played a key role in the successful outcome.
State Title Cure Statutes
Ohio’s title cure statute had a 21-year cure period for defects in recorded deeds and other real estate documents with limited application. The next closest state in terms of duration was 10 years; the national median and mean were both below four years. These defects in recorded documents may include flaws in execution or certificates of acknowledgement. Many other states provided for a presumption of validity for certain real estate instruments. We decided to borrow the best attributes of the cure statutes from throughout the country to take Ohio from the worst to the best title cure statute. I drafted new statutory language that was quickly approved by the Ohio Land Title Association.
Our advocacy efforts in Ohio included building a coalition. As a member of the Ohio State Bar Association Real Property Section Council, a group that consists of many of the top real estate lawyers in Ohio, I presented a chart summarizing the cure statutes throughout the country and explained how out of touch Ohio’s cure statute was. They decided that the Bar Association should take an active role in advocating for this long-overdue change; this ultimately led to a presentation to more than 200 lawyers who serve on the Council of Delegates. They agreed that the Bar Association, as a whole, should take the lead advocacy role.
With the support of the Ohio State Bar Association and the Ohio Land Title Association, combined with the fact that real estate transactions throughout Ohio were being held up due to our weak statute, the Ohio Association of Realtors agreed to support the cause to modernize and strengthen Ohio’s title cure statute.
NAIOP of Ohio is the entity that focuses its efforts on advocating to advance the interests of the commercial real estate industry at the state level. NAIOP’s state board quickly recognized the importance of a “clean and clear” title that is in compliance with state laws as part of any real estate transaction. They agreed to get behind this initiative, which became a featured part of our discussions with Ohio senators and state representatives at NAIOP of Ohio’s Legislative Days in 2015 and 2016.
I also testified as the expert on the bill before the Ohio Senate and House Committees and mentioned the support of the respected associations behind it. NAIOP of Ohio also submitted a well-crafted letter to Ohio senators and state representatives in support of the bill. When the senators who co-sponsored the bill testified, they also mentioned NAIOP’s support of the bill, which showed the esteemed standing NAIOP has in legislative circles in Ohio. It mattered to the Ohio General Assembly that major developers and other commercial real estate professionals wanted that bill to pass and that we believed it would streamline transactions and improve economic activity in our state.
SB 257 passed at the end of the Legislative Session in 2016, was signed by Governor John Kasich on January 4, 2017, and became effective on April 6, 2017. Our firm and title agency are already using it to help our real estate clients complete transactions in ways they would not have been able to before, and our firm has already helped several clients avoid litigation or short-circuit litigation within the last two months alone, since the new law has been effective.
What You Can Do
If you have an interest in maximizing your opportunity to minimize risks and complete deals, you should seize this opportunity to adopt similar legislation in your state. What we did in Ohio took a lot of time and work, so much of that work has already been done. The extensive research, analysis and drafting is already finished. Ohio’s new title cure statute now includes the best attributes of title cure statutes throughout the country. You now have a blueprint that you can use to create your own new and improved title cure statute that will expedite CRE transactions.
Thank you to Michael J. Sikora III for sharing his perspective and expertise on this issue. Learn more about Michael at http://www.sikoralaw.com/michael-sikora/.