Part VIII_________________________

property law
“To those who are engaged in commercial dealings, justice is indispensable for the conduct of
business.”
– Cicero

uying property is considered a land and to various rights that go along with land

B
vital part of living the “American or some interest in it.
Dream.” While most people buy The term land includes the actual surface
property for personal enjoyment, area and everything under and above a parcel
some individuals make a business of ground. In the past, ownership of a parcel of
of buying, selling, leasing, or land began at the center of the earth and extended
renting real property. So, whether someone is a through the boundaries of the parcel out into
homeowner, business owner, real estate magnate, space. Today, the airspace above the parcel is not
or merely interested in purchasing land as an exclusive; it is considered to be part of the public
investment, it is important to understand the large domain and subject to rights of navigation, which
and complex world of property law and, in means that members of the general public can
particular, real property law. travel through or use that airspace.
Generally, a fixture is something not naturally
a part of the land, but affixed to the land in such
Kinds of Property a way that it cannot readily be removed without
causing damage. Because buildings are usually
The word “property” has many meanings. In affixed to land, they are thought of as real prop-
a strict legal sense, it signifies ownership. As a erty. A furnace is personal property until it is
practical matter, it refers to objects that can be installed, when it becomes a fixture. If something
owned. The two main classifications of property on the land is portable, such as a mobile home, it
are real property and personal property. Real may or may not be considered part of the land,
property law deals with land, fixtures on land, depending on how it is installed. For example,
and rights and other intangible interests relating crops and trees are part of the land while growing,
to land that are capable of ownership. Real prop- but become personal property when they are har-
erty may include land, a single-family house, vested. The same is true of minerals, which are
a condominium or a vacation home. Personal part of the land in their natural state, but become
property is anything that is not related or attached personal property when mined, quarried, pumped
to real estate; it may be tangible or intangible. or otherwise removed. Fixtures such as crops and
Personal property might include cars, clothes, minerals are sometimes referred to as mixed prop-
furniture, refrigerators, tools and cash as well as erty, because they have some characteristics of
various rights or interests such as stocks or bonds. both real and personal property.
(Different aspects of personal property law There are many degrees of land ownership,
are also addressed in Part VI, “Contracts,” ranging from full ownership—that is, including
and Part VII, “Business Transactions and all rights relating to it, such as the right to sell it
Organizations.”) or give it away—to rental (permission from the
owner to use a portion of the land for specific
Real Property purposes). (Of course, all interests in property
The terms real property, real estate and realty are subject to the rights of the community. Thus,
refer to land, buildings and other fixtures on land. even the full owner of real estate must comply
They also refer to different kinds of interests in with zoning and building codes, for example.)

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Someone who has less than full ownership of
land is said to have a partial interest in the land. Types of Real
Certain types of ownership carry particular rights,
such as the right of a landowner to receive any Property Ownership
rent the land might yield.
When an individual is said to own real estate,
Personal Property it usually means that he or she is the full owner of
Personal property is anything that is not real a particular piece of property. Full ownership is
estate or affixed to real estate. Personal property only one of the ways to own real property. Or,
can be tangible or intangible. someone with a lesser degree of ownership might
Tangible personal property can be transported, have an interest in a property for a lifetime (called
seen and touched. Examples of tangible personal a life estate) or for a period of years, months or
property include cars, clothes, furniture, refriger- even weeks. Ownership also may be shared in
ators, tools and cash. various ways.
Intangible personal property includes various Property may act as security for debt, and the
rights or interests that cannot be seen or touched. security interest is a kind of shared ownership. An
Examples include ownership of stocks and bonds, individual may own an interest in real property
ownership of a debt and the right to bring a legal merely by having the owner’s permission to use
action. Stocks and bonds merely represent the it in a certain way, such as where the owner of a
value of the underlying interest; it is not the large yard allows the neighborhood children to
underlying interest. For example, a stock play ball there. Many different kinds of interests
certificate represents an amount and kind of can be separated from the full ownership and can
ownership interest in a particular corporation. be owned or disposed of separately. For example,
Personal property includes money in a bank the mineral rights of a piece of property can be
account, interest in a joint bank account, or a sold while the property owner continues to own
payable-on-death account. A joint-and-survivor- the land and live on it.
ship bank account is an account in the names
of two or more individuals who have an equal Fee Simple
right to the assets in the account with ownership Full ownership of real property is called fee
passing to the survivor(s) on the death of one of simple ownership, fee simple title or, sometimes,
them. The payable-on-death account (POD) is ownership in fee. The distinguishing characteristic
an account owned by one person during his or of a fee simple title from lesser degrees of owner-
her lifetime, which passes, on the owner’s death, ship is the right to pass full ownership to someone
to one or more named persons. else, whether during the original owner’s lifetime
Personal property is subject to a set of rules or upon his or her death.
that is different from those governing real prop-
erty. Because there is such a wide variation in
types of personal property, a variety of rules
govern its ownership and use.

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 interest in the property. Further, the life tenant
Fee simple ownership cannot destroy or waste the property because
also gives the right to… such action affects the rights of those who will
own the property after the life tenant dies.
 use the real property as the owner sees fit; When a life estate is created, a remainder
 allow others to use the property; interest is also created. The person who holds the
 limit the use of the property by other remainder interest (called the remainderman)
people; automatically acquires the fee simple title to the
property when the life tenant dies. The terms
 sell, rent or lease the property;
of the original grant determine whether the fee
 collect rents or profits the property yields; simple title stays with the remainderman. If no
and
remainderman is named, fee simple ownership
 mortgage the property. reverts to the original owner or to the owner’s
heirs upon the death of the life tenant.

Fee simple ownership of real property is

sometimes described as absolute ownership.
Types of Joint or Common
This description is misleading because there are Ownership
substantial limits on how a fee simple owner may In Ohio, there are currently two different
use the real property. For example, the fee simple forms of ownership of real property where two
owner must pay taxes on the real property, abide or more individuals own the property: tenancy
by zoning and other restrictions on the use of the in common and survivorship tenancy.
land, and honor the rights of others who own an In a tenancy in common, each owner has
interest in the land (tenants, lessees, mortgagees, an undivided, fractional share of the property.
holders of easements, etc.). Further, the fee simple Depending on how the tenancy in common is
owner’s use of the land must not interfere with the created and the transactions that subsequently
rights of other landowners or the public. take place, the shares may be equal or unequal.
Regardless of the size of an individual’s share,
Life Estate and Remainder Interest each tenant in common enjoys full ownership
of his or her share, and can sell, mortgage, use
A fee simple property owner can grant owner-
or dispose of it as a full owner. On his or her
ship of the property to another person for the
death, the tenancy passes to heirs or to those
duration of the other person’s life. This type of
named in the will of the tenant in common.
ownership is called a life estate. The person who
For example, if one tenant wishes to take
holds the life estate is called a life tenant. (The
control of his or her rights in the property, or to
term tenant may be confusing. In this context,
obtain the monetary value for that part, the tenant
tenant does not refer to a participant in a rental
may file a lawsuit to divide or partition the prop-
arrangement, but to a kind of ownership in real
erty. If partition is ordered, the property may be
property.) With certain important exceptions, a
physically divided and a fee simple portion given
life tenant can treat the property in much the same
to each tenant in common, or the property may be
way that a fee simple owner can treat the property.
sold as a unit and the proceeds divided among the
For example, a life tenant has access to the
tenants in proportion to their respective shares.
property and is entitled to use the property, to
In Ohio, a survivorship tenancy is a form of
lease it, and to retain any rents or profits the prop-
joint ownership created by statute. A survivorship
erty may yield. However, by definition, the life
tenancy is similar to tenancy in common, except
tenant’s interest in the property ends at his or her
that tenants have a right of survivorship. That is,
death. The life tenant cannot sell a fee simple

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when one tenant dies still owning his or her share, tenant in common with other apartment owners
the share passes automatically to the surviving as to halls, stairways, recreational facilities,
tenant(s). Thus, a survivorship tenancy interest walkways and other common areas, including
cannot be transferred by will, as the nature of this the ground on which the building stands. Of
form of ownership is that it automatically passes course, because each owner has an interest in
to the survivor(s). these common areas, he or she also must con-
The right of survivorship may be ended tribute toward their maintenance and repair.
where, for example, all tenants transfer or convey
their interest to a third person. Leasehold Estate
In most states, the right of survivorship is A property owner may give temporary pos-
automatically created when a joint tenancy session and use of a particular property to another
(common ownership by two or more persons) individual in return for the payment of rent or
is created. In Ohio, however, the right of survi- something else of value. If the owner does this by
vorship must be specifically described in the means of a written agreement called a lease, the
document that creates it. The statute allowing party taking possession of the property acquires a
joint tenancy with right of survivorship states leasehold interest or leasehold estate. In such a
that this law should be liberally interpreted to case, the landowner is called the lessor or landlord
comply with the intent of the owners. However, and the person to whom the property is rented is
the legal document that creates the joint tenancy called the lessee or tenant. The term of the lease
must use clear survivorship language. If the may be weeks, months, or years. Many residential
document does not have such a provision, the property leases are for one year, whereas business
result will probably be tenancy in common. property leases are often for five, 10, or 20 years
It should be noted that joint and survivor or longer. A lease may provide one or more
ownership is commonly used for both real prop- renewal options. An example of a renewal option
erty and personal property. A bank account with is a provision that states the tenant may extend
more than one name on it, for example, normally the lease for another year at a rate that will be
is joint and survivor property, because the signa- adjusted by a certain formula. This provision
ture card that opens the account usually contains gives the tenant the security of knowing that the
survivorship language. lessor will not lease the property to someone else
Tenancy by the entireties is essentially a at the end of the term without first giving the
survivorship tenancy created by a husband and tenant the right to stay.
wife. Ohio law allowed tenancy by the entireties Commonly, leases state that a tenant or lessee
from 1972 to 1984. Under that statute, each cannot sell a leasehold interest (that is, sublet the
spouse owned the entire property and the entire property or assign the lease to someone else, with-
ownership automatically transferred to the sur- out the lessor’s [owner’s] permission).
viving spouse. Tenancy by the entireties can no If the lessor sells fee simple title to the prop-
longer be created in Ohio, although those interests erty during the term of a lease, the new owner
that were created while the statute was in effect must honor the lease.
are still valid. Sometimes a lease provides for automatic
Condominium ownership created by statute is renewal: that is, if the lessee does not tell the
a hybrid of individual and group ownership. An owner he or she is going to leave the property at
individual condominium owner normally owns a the end of the term, the lease is automatically
portion of the property (such as one apartment) renewed. Sometimes the lease will specify that a
outright and a portion (the common areas) as a tenant’s holdover (failure to leave the property)
tenant in common. For example, each resident is not an automatic renewal of the lease term,
might be a fee simple owner of the unit and be a

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but converts the tenancy to one running from loan, the bank can foreclose its mortgage lien,
month-to-month, week-to-week, or at will. sell the property, and pay off the loan from the
Obviously, it is very important to read and proceeds of the sale.
fully understand the specific terms of a particular There are many other types of liens:
lease or rental agreement, as the terms can vary • A tax lien attaches to real property at the
widely. beginning of each tax year, even though the
actual amount of the property taxes has not
Tenancy from Month-to-Month, been determined and the taxes are not yet due.
A tax lien is just like a mortgage lien, but it
Week-to-Week, or at Will exists automatically, because all property
Rental arrangements not bound by a lease
owners have a duty to pay real estate taxes
may be either by the month or at the pleasure of
to the community. To ensure that those taxes
the parties. (See the “Landlord and Tenant” sec-
are paid, the community automatically has the
tion later in this chapter for more information.)
protection of this lien on the property. If taxes
Usually, when residential property is rented with-
are not paid for a long enough period, the
out a lease, it is on a month-to-month basis. The
community—that is, county authorities—can
tenant is entitled to possession for one month at a
have the property sold in order to pay off the
time, and if he or she stays on the premises for
tax debt.
even one day into the following month, occupancy
• A judgment lien may be used when someone
is renewed for that entire month. One month’s
has won a money judgment in a lawsuit and
notice by either the landlord or tenant generally is
wants to make sure to collect the money that
necessary to terminate a month-to-month rental
is owed. Let us say Mr. Smith was awarded
agreement, and one week’s notice is necessary to
$25,000 from a lawsuit against Mr. Jones
terminate a week-to-week agreement.
over injuries sustained in a traffic accident.
Transient accommodations, such as furnished
If the $25,000 is not paid, Mr. Smith can file
rooms, are often rented by the day, and rental
a judgment lien on Mr. Jones’s property,
arrangements of this sort can usually be termin-
and ultimately can ask the court to have Mr.
ated by either party without advance notice, that
Jones’s property sold to generate cash to pay
is, terminated at will.
off the $25,000 judgment.
• One way of making sure an arrested person
Liens and Mortgages will appear for a criminal trial is for the state
A lien is a claim against property to secure the to place a lien on the defendant’s property by
payment of a debt or the performance of some act. the terms of the bail bond he signs.
The most common form of lien is created when an • A mechanic’s lien protects those people who
individual mortgages his or her real property to build or repair homes or other buildings. If the
another person to ensure repayment of a loan. owner does not pay the bill within a certain
That is really what a mortgage is about: a period of time, the party supplying labor or
bank loans a large amount of money to a real materials can file documents to secure a lien
estate buyer, but nobody is likely to loan a buyer against that property. Again, as a practical
$100,000 without some protection. That protec- matter, the property cannot be sold to a third
tion is the signed mortgage that gives the bank a person without paying the amount owed, and
special kind of lien on the property. Most mort- the lienholder (for example, the contractor)
gages provide that the real estate owner cannot ultimately can ask the court to have the prop-
convey (sell) a fee simple interest in the property erty sold and the proceeds of the sale applied
to someone else without first paying off the bank to pay the outstanding bills.
loan. And if the real estate owner fails to pay this

113
 Property is frequently subject to many liens. sell or otherwise transfer it to someone else.
In such cases, it is desirable to avoid a series of Also, the property owner can terminate a license
foreclosures and forced sales. Accordingly, when at any time. A typical example of a license
one lienholder sues to foreclose, all lienholders would be oral permission for a person to hunt
are notified and their claims dealt within the same on another individual’s property.
suit. This process is called marshaling of liens. Because an easement is a genuine interest in
When there are many liens, the property may property while a license is not, a dispute may
not be worth enough to cover all liens, so it is arise about what kind of permission was given.
necessary to determine the priority of liens. The If the court decides that an easement was granted,
general rule is that the first lien in time is the first the permission is an enforceable property right,
lien in priority (“first come, first served”). Thus, whereas if the court decides that only a license
when the property is sold, the first lienholder will was granted, then no property right is involved.
be paid. If enough money is left, the second lien-
holder will be paid, and so on in order of priority. Mineral Rights and Similar Interests
The priority of some liens is outlined by statute. Rights to search for and develop minerals and
Thus, for example, tax liens almost always take harvest timber are among important real property
priority over other kinds of liens. interests that may be owned separately. Typically,
these activities require a lot of money, so land-
Easements and Licenses owners often lease mineral or lumber rights to
Sometimes a landowner will give someone professionals. For example, a landowner might
permission to use part of his or her property for a lease the mineral rights to his or her property to
specific purpose. Such permission may be either an oil-exploration company in return for a flat
an easement or a license. payment when the lease is signed, plus a royalty
An easement is formal permission, granted of, say, one-eighth of the value of any oil or nat-
in writing by deed or similar document, to use ural gas brought to the surface. Leases to mine
another’s property. An easement can run with coal, quarry stone, sand, or gravel usually involve
the land, meaning it remains valid even though fixed rent rather than royalties. Timber leases
the property involved is rented, mortgaged, sold often are granted for a single, flat payment, but
or transferred through a succession of owners. sometimes also include payment based on the
Normally, an easement is automatically cancelled amount of timber cut.
when the easement holder abandons the specific Sometimes, ownership of the property itself,
purpose for which it was granted. Easements are and of the mineral rights, is transferred separately.
commonly granted to utility companies to install There are many areas in Ohio, for example, where
and maintain water, sewer, gas, electric, and tele- mineral rights were transferred more than 50 years
phone and cable lines across private property. ago; the land is now owned by grandchildren of
Sometimes an owner whose property has no the original landowner, and the original oil
entryway (ingress) or exit (egress) will acquire company long ago sold out to a major producer—
an access easement across adjoining property. but the land is still being farmed, the wells are still
A license is informal permission to use producing oil and royalties are still being paid.
another’s property and is most often personal Under certain circumstances, mineral interests not
in nature (that is, the rights may be exercised exercised for at least 20 years can be considered
only by the specific person to whom the per- abandoned and the interest in the mineral rights
mission is given). It may be in writing, but is returned to the landowner. This termination of
more often oral and may be implied from the mineral interest can be very important to clear title
conduct of the parties. Licenses do not run with to property.
the land, so that the holder of a license cannot

114
 • is signed by the grantor; and
How Real • is acknowledged (notarized) by the grantor.

Property Ownership If the grantor is an individual, a deed should

state whether the grantor is married so that a
Is Transferred spouse’s interest in the property (called a dower
interest) can be determined and released. In a
Property is a commodity, meaning it often general warranty deed, the grantor guarantees
changes hands from one individual to another. that he or she has legal authority to transfer the
An individual can acquire an interest in real property and will defend the title to the property
property through: against all claims of other people. If the grantee’s
• a written document, such as a deed, lease, title is successfully challenged at a later date, the
mortgage or other conveyance; grantee has a claim against the grantor based on
• inheritance; the grantor’s warranty. A limited warranty deed
• the operation of law (such as a property (referred to in some states as a “special warranty
transfer following abandonment by the deed”) guarantees title only as to acts of the
owner or a transfer ordered by a court grantor and matters arising during the grantor’s
following a lawsuit); or ownership. Warranty deeds are used to convey
• adverse possession or prescription, that fee simple title. A quitclaim deed is similar to a
is, through “squatter’s rights.” warranty deed, except that it does not guarantee
the grantor’s title to the property. The effect of a
Deeds, Leases, Mortgages and other quitclaim deed is to convey the grantor’s interest
in the property (if he or she has any), without
Conveyances guaranteeing that he or she has any interest to
Fee simple interest in land is generally granted
convey and without guaranteeing that the prop-
through a deed. A leasehold interest is granted by
erty is free from liens or other claims. Quitclaim
means of a lease. A mortgage is an interest in land
deeds are often used to adjust boundaries, correct
where the land is pledged to secure or guarantee
errors in previous deeds and to obtain releases in
payment; it is created by a document called a
land disputes.
mortgage deed, or, more simply, a mort-gage. A
A lease is used to bind a property rental
conveyance is any transfer of an interest in real
agreement and is both a contract and a transfer
property, whether done by deed, lease, or
of an interest in the property. A lease names the
mortgage. Deeds, leases and mortgages are not
property owner (the landlord or lessor) and the
only conveyances (transfers) of real property
renter (the tenant or lessee) and describes the
interest, but they also may be contracts or con-
premises involved. It states the period of the lease
tained in contracts, meaning that other rights and
and the amount and method of payment of the
obligations may be spelled out that the parties
rent. The lessor usually promises to protect the
must honor.
lessee’s possession and “quiet enjoyment” of the
The higher degrees of ownership in land are
property. The lessee promises to pay the rent as
almost always granted by means of a deed or
agreed, use the premises for proper purposes,
similar document that:
protect the property from undue harm and return
• names the person making the grant (the
it in good condition when the lease expires. The
grantor) and the person to whom the grant
terms of a lease frequently cover a variety of other
is being made (the grantee);
matters, such as renewal and assignment.
• describes the property or interest being
granted in formal, technical terms;

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 A mortgage is similar to a deed, except that inheritance or survivorship in real property, that
the mortgage lender’s ownership of the property interest passes when the property owner dies. Title
is in the nature of a lien, enforceable against the to personal property, on the other hand, is not
property upon default. A mortgage states the pro- automatically assigned to heirs. Although the title
missory note amount and terms for the repayment to real property passes immediately upon death,
of the debt, as well as the language usually found real property and interests in real property may
in a deed. The borrower (called the mortgagor) have to go through an estate administration
may have to take steps to protect the lender’s process to ensure that the deceased’s debts and
security, such as paying the taxes when due and taxes are paid and that the transfer of title to the
keeping various insurance policies up to date. property is properly recorded in public records.
Further, a mortgage states that if the borrower (See Part IX, “Probate Law,” for a more
or mortgagor pays the debt in full as agreed, the complete discussion of inheritance and estates.)
mortgage will become null and void and the lien
will be released; but if the debt is not paid accord- Transfer by Operation of Law
ing to the terms of the promissory note, the lender Ownership in real property may be transferred
can ask a court to foreclose the mortgage and without a formal conveyance procedure. Such a
cause its sale to satisfy the amount due to the transfer may occur as the result of a judgment
lender. in a lawsuit. For example, a divorce decree, or
the court order in dissolution of marriage that
Transfer by Inheritance approves a separation agreement, may award the
When someone dies owning or holding some family home to the wife (or husband), and the
interest in real property, the deceased owner’s decree, or order, may have an effect similar to a
interest must be transferred to another person or deed. An abandoned mineral interest is another
entity. That other individual may be a beneficiary example.
named by the deceased owner’s will or the per-
son entitled by law to the property when there is Transfer By Adverse Possession
no will. This other individual also may acquire
the property of the deceased because he or she
or Prescription
Sometimes the title to real property or an
owns the remainder interest after a life estate,
interest in real property is transferred because
or because of a right of survivorship. Ohio also
the original owner neglects his or her rights.
recognizes transfer-on-death (TOD) affidavits
For example, an individual may acquire title
(and, under prior law, transfer-on-death deeds).
to another person’s real property by adverse
Such affidavits or deeds transfer ownership to
possession (which, in lay terms, is something
an individual named in the affidavit or deed
like “squatter’s rights”). Adverse possession is
upon the death of the property owner. Transfer-
using real property without permission contin-
on-death affidavits or deeds differ from right of
uously for 21 years, provided that the use is
survivorship deeds in that survivorship property
obvious and exclusive against others and that
is owned jointly by the individuals during the
the original landowner does nothing significant
life of both of them, whereas ownership of TOD
to assert his or her rights as owner. Sometimes
property goes to the second individual named
entire tracts of land are acquired by adverse
in the affidavit or deed only upon the death of
possession, although the usual case involves a
the title owner.
small portion of someone’s property that an
A feature that distinguishes real property from
adjoining owner uses for 21 years. For example,
personal property is that real property automatic-
one individual may build a fence three feet into
ally belongs to the successor on the death of the
his neighbor’s side of the property line, without
lifetime owner. When an individual has a right of

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realizing it is the neighbor’s property. If the
neighbor does not consent and fails to dispute Land Records
the fence’s location and this situation continues
for 21 years, the individual who built the fence Ownership of real property is recorded in a
will own the property by operation of this legal government office for the owner’s protection.
principle. Under the law, if an individual’s ownership
Similarly, an easement (the rights to use interest is not made a matter of public record, he
real property) may be acquired by prescription, or she may not be able to assert title—especially
which is based on actual use (without permission) against those who innocently purchased the prop-
coupled with the landowner’s failure to prevent erty from a former owner. Every state maintains
the use. An example of a prescriptive right is a public records of land and transactions and events
right-of-way acquired over another’s property affecting land ownership. In Ohio, the county
by using the property for driveway purposes for recorder of each of the state’s 88 counties main-
a substantial period of time without complaint tains ownership records for the land within its
by the owner; the non-owning person acquires geographical borders. A careful search of these
an easement by prescription. records will reveal the status of the record title
or ownership of any given parcel of land.
Encouraging Unrestricted Transfer
Feudal land laws in medieval times allowed Necessity for Land Records
the concentration and retention of land (and thus Just because someone lives in a house on a
wealth and power) in the hands of a few families, certain property does not mean that person is
thus stifling economic growth. In response, soci- the property owner. The actual owner may or
ety developed a policy that land should be freely may not live on the land. Further, the actual
transferable. The law gradually developed legal owner of the land may be an international
rules implementing this policy. The proper devel- corporation with headquarters outside of the
opment, use and transfer of land are essential to country. Consequently, some system of land
the health of our national economy. records is necessary to keep track of land titles
The law generally does not permit grantors and interests. The primary value of land records is
(those who transfer their property) to impose to give notice to anyone examining these records
restrictions that would unreasonably keep future of the existence and nature of interests in, and
owners from selling, leasing, mortgaging, or claims on, real property.
otherwise disposing of the property as the future An individual with an interest in real property
owners see fit. is responsible for filing documents to prove he or
The rule against perpetuities is another rule she has a right to that property (this filing is often
that encourages free transfer of property by called recording). Failure to record does not, in
limiting the period of time a property owner can itself, destroy the individual’s interest in the prop-
delay a change of ownership. This rule states erty, but it may prevent the individual from taking
that any grant of interest in real property that is action against anyone who might subsequently
to occur in the future must take effect, if at all, challenge that interest.
within the period of the life or lives of benefici- For example, if a buyer has not recorded a
aries living at the time of the grant, plus 21 years. deed establishing the property transfer, he or she
(The rule against perpetuities is discussed in Part may not be able to make a valid claim against a
IX, “Probate Law,” at “Limitations On Wills; third person who subsequently “acquired” the
Special Provisions.”) property without knowing about the holder’s prior

117
claim. The reasoning behind this is clear. Since recording. Land registration requires a court pro-
the holder’s claim, while valid, was not recorded ceeding (a land registration suit) to establish the
in public records, others who might have a later status of the title. Once the status of the title is
potential interest in the property cannot be determined, a certificate of registration is filed
expected to know about the existing claim. In and all mortgages, liens, subsequent transactions
fact, the third person may acquire the real and other claims are noted on the certificate.
property innocently, relying on public records. The system is called the “Torrens” system, and
Or, let’s suppose a landowner mortgages registered land is often described as “Torrenized”
the property as security for a loan, but the lender land. Such certificates are used in only a few
neglects to file the mortgage deed in the county Ohio counties today. Although the original goal
records. Later, the owner sells the property to a of land registration was to compile all records
third person who does not know about the unre- relating to a parcel on a single certificate, and
corded mortgage. The mortgagee (lender) is now thus to simplify recordkeeping, in actual practice
powerless to foreclose its mortgage on the real it has turned out to be more complex. Therefore,
estate, because its claimed lien on the property registration has become unpopular.
was not made a matter of public record. The The county recorder’s office is the repository
property that secured the mortgage has been for plats and surveys. A plat is a map of sub-
transferred to a third party who had no know- divided land, showing the various lots, the por-
ledge of the mortgage. If the mortgage had been tions of the land dedicated for roads or other
filed, it could have been foreclosed. In that case, public uses, and the easements for utilities and
the buyer legally would have been presumed to other features. Surveys are exact descriptions of
know about the filed mortgage, even if the buyer land parcels using “compass calls” and precise
neglected to examine the public record. measurements that come from actual observation
and measurement by means of instruments such as
Types of Land Records a compass, transit, theodolite or surveyor’s chain.
In Ohio, the county recorder’s office has Other county officials also keep important
records of mechanic’s liens, property bonds land records. For example, the county auditor and
posted for bail, deeds, mortgages and indexes county treasurer are responsible for keeping track
for these records. The most numerous are the of property taxes. (Taxes are mentioned here
records of deeds and mortgages. Mortgages and because they are liens, or charges, on real prop-
deeds to be filed with the recorder’s office are erty.) The auditor’s tax maps can be used to
copied in detail and bound. This information is identify property and are often the starting point
also maintained on computer databases. When for a title search. Also, records kept by the clerk
a deed or mortgage is recorded and placed in of common pleas courts must be searched because
its proper book, the volume and page where it lawsuits and judgments can affect the title to
appears is noted in a general index. The simplest property. Similarly, probate court records are
form of index is arranged alphabetically accord- extremely important in determining the status
ing to grantors (sellers), with a reverse index of of property ownership. The county sheriff also
grantees (buyers). In many counties, indexes keeps a record of “foreign” judgments filed in the
and copies of records are in electronic files or county (a foreign judgment being one rendered in
on microfilm, and books are no longer used for a court in another county). Thus, if a judgment is
new filings. issued in a lawsuit in Montana against someone
A land registry is another important set of who owns property in Ohio, the foreign judgment
land records kept in some counties, and is part can be recorded in Ohio and thereby becomes a
of an entirely different and separate system of lien on the Ohio property.

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Descriptions of Property “Beginning at a clump of black
There are several ways to describe a parcel locust located at the northeast corner of
of real property, but the most common method the Peter Schweitzer farm, then north-
includes some sort of map reference to locate the easterly 250 rods, more or less, to a
parcel in the county, plus a series of bearings and large flat rock on the southerly bank
distances called metes and bounds, describing of Moccasin Creek.”
the exact boundaries of the parcel. If property is
subdivided and platted, a parcel can be accurately There are numerous potential difficulties with
described by giving the subdivision name, lot this description. For example, the surveyor’s
number and location of the recorded plat. compass was inaccurate; the locust trees died of
natural causes or were cut for fence posts; the
record of Peter Schweitzer’s farm was possibly
Title Examination; Marketable Title destroyed in the courthouse fire of 1831; and the
Searching land records and determining the
large flat rock could have been washed away in
status of land titles is a job for professionals
the 1913 flood when Moccasin Creek cut a new
because of the many different kinds of interests
bed, etc. Luckily, today we have legal descrip-
in real property, and the complexity of land
tions based on data from more accurate surveying
records. Any person interested in finding the title
instruments.
to a particular piece of property should contact
In Ohio, complete title examinations are
an attorney or a title agent.
usually unnecessary. Statutory or written laws
A typical title examination is a backward
set the rules about what constitutes a marketable
search of the records, beginning with the present
title (one that can be relied on when buying
owner and tracing back through each preceding
and selling property). Standards for searching
owner. The object of this examination is to estab-
titles have been established by the courts, title
lish the chain of title. The present owner’s claim
insurance companies, lenders and the Ohio State
is good if his or her title proves to be part of an
Bar Association. Under Ohio law, if a title search
unbroken chain of ownership.
shows that there is an unbroken chain of recorded
In a complete title examination, the chain of
title that goes back to a deed or other conveyance
title is taken back to the original source, which, in
document of record for at least 40 years, it is
Ohio, will vary depending on the location of the
considered proof of fee title. Further, it can be
property. The original sources of Ohio property
assumed that the current owner has fee title, that
usually date back to land grants from Congress
is, the right to pass title. This right to pass title is
or from various state legislatures (especially
established by the title document recorded at least
those of Virginia and Connecticut, both of
40 years before the search, called the root of title.
which granted land in the “Ohio Country” to
It must be noted that a title search often must
Revolutionary War veterans after the war as
go beyond the marketable root of title. For exam-
payment for their services).
ple, a 99-year lease, or easement, which was
A complete title examination is tedious and
effective in 1950 would be beyond 40 years of a
can be difficult or impossible to obtain. Many
search conducted in 2010, but still could affect
early records have been destroyed, since nearly
the title to the property if it falls within certain
every courthouse in Ohio has been damaged or
exceptions under the marketable title law. In such
destroyed by fire at least once. Further, older
a situation, fee title could be passed, because the
records are not reliable because the men who
chain of title is verified, but the title might be
created them generally used crude instruments.
subject to the lease or easement made in 1950.
Harsh environmental conditions did not help
Many title examiners follow a 65-year standard
matters. Old land descriptions can be vague.
to gain a more complete record.
They can read, for example:

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 Purchase and Sale
What the offer does...
of Real Estate • identifies the premises, usually by street
address;
The most common real estate transaction is • states the proposed terms of the purchase,
the purchase or sale of a home. This section out- such as amount of down payment, type of
lines some of the matters to be considered in pur- financing and maximum interest rate;
chasing or selling a home, including a contract • specifies the type of evidence or proof of title
of sale, financing, title examination and closing. (certificate of title, abstract of title or title
insurance) to be furnished by the seller;
• provides for payment of unpaid taxes and
Contract of Sale assessments (usually these will be prorated
Real estate brokers use one of several standard between buyer and seller, based on the
form contracts for the purchase and sale of resi- amount of taxes accrued but not yet payable
when the sale is completed);
dential property. The contract contains an offer by
• lists the various kinds of personal property to
the prospective buyer, with a space for acceptance be included in the transaction, such as rugs,
by the seller. Frequently, offers are limited in drapes, dishwasher and other items; and
time: that is, the offer is automatically withdrawn • states other terms and conditions.
if it is not accepted by a specified time.
The boxed text on the next page explains what
the offer does. Premises refers to land plus any In Ohio, certain transferors of real estate,
buildings upon the land. It can also refer to a including homesellers, must provide a disclosure
particular part of a building in the case of a form around the time the contract is signed. On
condominium. this form, sellers must summarize what they
Both parties are bound by the contract when know about any problems with the water supply,
the seller accepts it. If the buyer defaults, the the sewage system, the walls and the foundation,
seller may hold the buyer liable for the difference the presence of hazardous substances, such as
between the contract price and the price at which lead-based paint, asbestos, and radon gas and any
the seller is eventually able to sell the property other material defects. In certain situations, when
(assuming it is lower than the original contract undisclosed defects are discovered before the
price). If the seller defaults, the buyer may com- closing, the buyer may rescind the contract with-
pel the seller to specifically perform the contract, out any liability.
or may sue for damages. In either case, liability This law does not apply to a number of
can have serious consequences. A buyer should common transfers or sales. For example, it does
not sign an offer until he or she has read all of not apply to sales of new homes that have never
it and understands all of the terms. Similarly, a been inhabited, sales to persons who have already
seller should not accept a contract (the offer to inhabited the property for one year or more, or in
purchase) until he or she has read all of it and general, to transfers made as part of a court order.
understands all of the terms. If either party has Federal law also requires sellers to advise buyers
any questions, an attorney should be consulted if a home was built before 1978, and to allow the
before any paperwork is signed. buyers to inspect the home for lead-based paints.

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 Finally, buyers should understand their The federal government insures some kinds
relationship with a real estate agent, whether the of mortgages through agencies such as the Federal
agent is hired by the buyer or the seller. An agent Housing Administration (FHA) or the U.S.
may work for the seller or the buyer, and, in some Department of Veterans Affairs (VA).
cases, may represent both the buyer and seller. Mortgages by banks and other lending
This representation of both the buyer and seller companies are called conventional mortgages.
is referred to as dual agency. The agent must Usually, a purchase on an FHA or VA mortgage
give the client(s) (the buyer or seller or both) a will require a smaller down payment than pur-
Consumer Guide to Agency Relationships, which chase on a conventional mortgage, although the
explains the various relationships between brokers total costs in an FHA or VA transaction may be
and their clients. The agent also must provide an higher because of the increased risk involved
Agency Disclosure Statement, which describes in a high-ratio loan (a loan where the amount
the particular relationship between the agent and of the loan is high in relation to the value of
the client(s). the property).
Sometimes, when mortgage money is espe-
Financing the Purchase cially hard to find or interest rates are very high,
Most people borrow money to buy a house. a seller may sell a home on the condition that
The usual ways for financing are a conventional the buyer assumes and agrees to pay the seller’s
mortgage, an FHA or VA mortgage, a mortgage existing mortgage. This arrangement is called a
assumption or a land contract. mortgage assumption. The buyer who assumes a
All buyers should ask themselves, “Can I mortgage takes over the seller’s mortgage and the
afford to buy this house?” No matter how care- interest rate of that mortgage. If the mortgage’s
fully a family may budget its income and expen- interest rate is lower than the current market rate,
ditures, there are limits on how much housing it would be an advantage to the buyer, although
debt a family can afford. Other expenses, such as the mortgage assumption may require a higher
food, medical and automobile insurance, etc., also down payment than a conventional loan.
must be paid. One rule of thumb (though not the For a mortgage assumption to be legal, the
only one) is to limit monthly housing expense to seller’s mortgage must allow assumption. Many
one week’s take-home pay. “Housing expense” mortgages do not allow assumption. Also, the
includes the mortgage payments (principal and seller generally remains liable on an assumed
interest), plus fire or homeowner’s insurance mortgage, so the seller must choose a buyer who
premiums and property taxes and assessments. can and will keep the payments current. A seller
For example, suppose the monthly payment also can accept a mortgage from the buyer. This
on a proposed mortgage is $600, the homeowner’s means that the seller, rather than a bank or other
insurance costs are $192 per year or $16 per financial institution, becomes the lender, and the
month, and the property taxes are $720 per year title is conveyed to the buyer subject to the mort-
or $60 per month. Adding these costs together, gage lien. This usually occurs only where the
the total monthly housing expense would be buyer cannot qualify for a loan from a bank or
$676 ($600+$16+$60). To handle this expense other commercial lender. However, it is more
comfortably, the buyer should earn at least $676 common for a seller to sell the property on an
per week. installment land contract rather than accept a
Money may be borrowed from various types mortgage, because, under a land installment
of financial institutions, including savings and contract, the seller does not have to give the
loan companies, banks, mortgage bankers and buyer title to the property until the full purchase
mortgage brokers. price is paid.

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Title Examination and Evidence can reveal environmental concerns. Some of
these matters may be regulated by either the
of Title federal Environmental Protection Agency (EPA)
If a home purchase is to be financed through a
or the Ohio Environmental Protection Agency
bank or other financial institution, the lender will
(OEPA) or both.
require a title examination. If the lender does not
The EPA is the federal agency charged with
require it, or if there is no institutional lender, the
implementing the environmental laws passed by
buyer should contact an attorney or a title agent
Congress. The OEPA was created in 1972 to
to have the title examined. The seller’s promise
implement Ohio laws and regulations regarding
to furnish a good title is not a guarantee that the
air and water quality standards; solid, hazardous
seller actually can, or will, furnish such a title.
and infectious waste disposal standards; water
In some parts of the state, the buyer is
quality planning, supervision of sewage treatment
responsible for protecting himself or herself by
and public drinking water supplies; and cleanup
securing the title examination. In other areas of
of unregulated hazardous waste sites.
Ohio, purchase contracts require that evidence
of title be furnished by the seller in one of three
ways. One way is to have an attorney give a Closing
certificate stating the title is good. The certificate A contract of sale is closed when:
often may list a series of exceptions—issues or • a title has been examined and all necessary
areas the lawyer has not researched or cannot documents are signed;
research. Another way is to obtain an abstract • closing costs and the purchase price are paid
of title, which is a chronological summary of all (either entirely by the buyer, or partially via
transactions concerning the property found in the mortgage lender);
the public records. • the property is transferred to the buyer by the
The third and most common method is to seller’s delivery of the deed; and
purchase title insurance. Title insurance provides • the seller’s mortgage and any other liens are
protection against claims arising from title prob- paid from the purchase price, to clear the
lems that may not be uncovered by a title search. buyer’s title.
If the buyer pays for a title insurance policy only
on the loan, then the title company would only This process is called a closing. There are
pay the mortgagee (lender) if the title to the prop- two kinds of closings: round table and escrow.
erty is successfully challenged in court. By paying A round table closing is an actual meeting where
an additional premium, the buyer can get an own- the buyer, seller, lender and their representatives
er’s title insurance policy that will pay the buyer meet, make payments and adjustments and
if there is a title defect that the title insurance actually sign and exchange the various
company did not discover. documents. The deed is recorded shortly after a
round table closing. An escrow closing is not an
actual meeting. All the necessary documents,
Environmental Concerns payments and adjustments are delivered to a
Identifying certain potential environmental
neutral third party (called the escrow agent), and
risks or concerns before purchasing property
on the scheduled day, the escrow agent records
can alleviate future stress and expense. Home-
the deed and delivers money, with neither buyer
buyers may be concerned about lead-based
nor seller present. The purpose of both types of
paints, asbestos, radon gas and gases emanating
closings is similar, although which one is used
from fuel storage tanks, or the home’s water
depends on local custom and the needs of the
supply and septic system, for example. A prop-
individual transaction.
erty inspection by a certified home inspector

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 During a closing, the balance of the purchase
price is paid and the deed signed and given to Landlord and Tenant
the buyer for recording. Various deductions and
adjustments are made in the amount paid to the The first time many people encounter aspects
seller. The buyer and seller each receive a closing of real property law is when they rent their first
statement, which is prepared before closing so apartment or house. Laws addressing real prop-
that the transaction can be completed. The state- erty transactions as well as certain aspects of the
ment lists the purchase price of the property and rights, obligations and remedies of residential
all adjustments to that price. landlords and tenants can be found in Chapter
The statement includes specific entries for the: 5321 of the Ohio Revised Code, the Ohio Land-
• buyer’s down payment (or “earnest money” lord-Tenant Act.
deposits);
• amount of cash, if any, that is to be paid to the What is a Rental Agreement?
seller; A rental agreement or lease is a written or
• pay-off price of the seller’s existing mortgage; oral contract between a lessee (tenant) and lessor
• transfer tax the seller is required to pay to the (landlord). A properly written agreement will
county; eliminate most of the misunderstandings and
• cost of the title examination and the cost of problems that commonly arise between a land-
the title insurance policy; lord and a tenant.
• proration of real estate taxes between the A rental agreement benefits and protects
buyer and seller; both parties and is an efficient way of handling
• cost of document preparation and recording a business transaction. A written agreement may
(the seller is usually required to pay for the create a tenancy for a fixed period of time or from
release of the existing mortgage and for the week to week, month to month or year to year.
preparation and recording of the documents To protect the landlord and the tenant, it is wise
necessary to cure defects in title); to specify the exact manner in which the rental
• cost of the insurance and tax escrows that agreement may be terminated. If there is no writ-
lender may require of the buyer; and ten lease or rental agreement, the landlord or the
• real estate commission. tenant may end a week-to-week tenancy by giving
the other party at least seven days’ notice prior to
The allocation of the fees and costs between termination. Either party may end a month-to-
the buyer and seller is determined by contract month oral tenancy by giving the other party at
or area custom. As stated above, the buyer also least 30 days’ notice before the end of the current
executes (signs) the promissory note and mort- monthly term.
gage to the lender. The buyer should make certain A landlord may not use a contract clause to
that all of the contract’s terms are completed limit or escape certain types of responsibility,
before signing the mortgage. The contract of sale including repair and maintenance, which are
becomes merged in the deed when the deed is mandated by law. If such a clause is included
accepted and the parties may lose the right to in a signed rental agreement, it cannot legally
enforce any unperformed contract obligations. be used against the tenant.
Also, the buyer is theoretically entitled to pos- Ordinarily, the landlord prepares a rental
session of the property immediately upon closing, agreement. For this reason, any doubtful or
but it is not uncommon for the contract to provide ambiguous terms are decided against the landlord
for delayed possession (from one to five days and in favor of the tenant if a dispute arises and
after closing), which is usually one of the con- ends up in court.
tract provisions.

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 Under Ohio law, both tenants and landlords • comply with housing, health and safety codes;
may recover damages and reasonable attorneys’ and
fees, in some situations, for certain unlawful acts • allow the landlord reasonable access to the
of the other party. premises to inspect, make repairs, deliver
large parcels or show the property to pros-
Obligations of the Landlord pective buyers or tenants.
A landlord must keep the rented or leased
property (premises) decently habitable and may The tenant cannot change any of these legal
not unreasonably interfere with the tenant’s duties. However, the landlord may agree to
privacy. assume responsibility for fulfilling any of these
The landlord must ensure that common areas tenant duties as part of the lease agreement.
(parking lots, stairs, halls, sidewalks, etc.) are
clean and safe, and that the structure complies Security Deposits
with building and housing codes. Specifically, A landlord often will require a new tenant to
electrical, plumbing, heating and ventilating post a security deposit (commonly equal to one
equipment must be maintained. The landlord month’s rent). The purpose of the deposit is to
also must provide water and heat, unless these cover any damage to the rental property caused
utilities are under the tenant’s control. If the by the tenant, and, in some instances, unpaid rent.
building contains four or more dwelling units, If the deposit is more than $50 or one month’s
the landlord must provide trash containers and rent (whichever is greater), and the tenant is in
trash removal. The landlord cannot insist on possession of the property for six months or more,
having unreasonable access to the rental prem- the landlord must credit the deposit with five per-
ises and must give reasonable advance notice cent interest. Within 30 days after a tenancy ends,
(presumed to be 24 hours) of the intention to the landlord must itemize every deduction from
enter the tenant’s suite, apartment or area. the security deposit and give the tenant a copy. If
Finally, the landlord may not attempt to evict the tenant has furnished the landlord with a for-
a tenant by changing the lock, terminating warding address, the landlord must refund the
utility service or removing the tenant’s belong- deposit plus interest and minus any valid deduc-
ings without a court order. tions. If the landlord fails to provide a refund
and/or explanation of any deductions, it could
Obligations of the Tenant cost the landlord double the amount due, plus
Tenants have a variety of obligations beyond reasonable attorney fees should the tenant pursue
paying rent or lease payments on time. Specific- legal action.
ally, a tenant must:
• keep the premises clean and safe; Rent Withholding
• properly dispose of trash; A tenant living in a building with four or
• keep plumbing fixtures as clean as their more dwelling units may place the rent in escrow,
condition permits; if the tenant reasonably believes the landlord has
• properly use electrical and plumbing failed to live up to his or her obligations, or if the
equipment; landlord is found to be in violation of any law or
• maintain appliances furnished as part of regulation affecting health or safety. However, if
the lease; the tenant does not do this properly, the tenant
• cause no disturbance and forbid family, may face eviction for non-payment. To withhold
friends and guests to disturb other tenants; rent properly, the tenant must be current in rent
• see that controlled substances (such as certain payments and give the landlord 30 days’ notice of
drugs) are not illegally used on the property;

124
the health or safety problem. The 30-day period specific language, including a recommendation
gives the landlord an opportunity to remedy the that the tenant seek legal advice.
problem. If the problem is not fixed, the tenant After the eviction suit is filed, the summons
may deposit the rent payment by the due date issued by the court to the tenant must state that
with the clerk of the local municipal or county the tenant:
court instead of paying it to the landlord. At the • cannot be evicted unless the tenant’s right
direction of the court, the withheld rent may be to possession has terminated (a tenant’s
applied to correct the problem, or the court may right to remain on the premises is terminated
order the monthly rent reduced until the problem when, for example, the tenant has breached
is remedied. the agreement or the lease term has ended);
• cannot be evicted in retaliation for an
Retaliatory Conduct assertion of rights covered by the law;
A landlord cannot raise the rent, withhold • should continue depositing rent with the
services or attempt to evict a tenant when a tenant court if already doing so;
exercises his or her lawful rights, including right- • has a right to jury trial in the eviction action;
fully withholding rent or properly complaining and
about living conditions. Acts of the landlord are • has a right to legal assistance.
not considered retaliatory if:
• the tenant created the problem that is the In an eviction case, the court determines who
basis for withholding rent payments; has the right to possession of the rented or leased
• the tenant owes back rent; property. It may also determine all rights and
• the tenant has failed to leave at the end of liabilities of the landlord and the tenant. For
the rental term; example, the court may order an appropriate
• correction of the problem would require governmental agency to inspect the property and
demolition or remodeling of such major report if any condition of the property violates
proportions that the tenant would lose the the law. If such a condition exists and was caused
use of the premises; or or was allowed to occur by the tenant, the court
• the rent increase is to cover improvements may order the tenant to pay the landlord the
or increased costs. reasonable cost of repairing the condition. Where
the tenant did not cause such a condition and the
If a landlord takes retaliatory action, the court decides the tenant should have possession,
tenant can recover possession of the premises the court may order the landlord to correct the
(if evicted), terminate the rental agreement or condition. If the tenant did not cause such a
use the retaliatory action as a legal defense when condition and the court decides that the tenant
protesting an eviction. The tenant also may should not have possession, the court may forbid
recover damages and reasonable attorney fees. the landlord from renting the property until the
condition is corrected.
Eviction
The technical name for an eviction action
in Ohio is forcible entry and detainer. Eviction
Other Real
actions allow landlords to recover rented or leased
premises, provided their tenants’ rights are not
Property Issues
violated.
Before bringing an eviction action, the land- Zoning
lord must give the tenant at least three days’ Zoning is the process by which political sub-
written notice to leave. The notice must include divisions (cities, villages, townships and counties)

125
regulate land use. These political subdivisions are or both. For example, a residential lot in the inner
further divided into districts or zones. Subdivision city might not be large enough, under current
officials enact regulations to control the types of zoning regulations, for a house to be built. Such
buildings and uses within each of these districts. a problem may be resolved by the granting of a
The primary purpose for zoning is to facilitate variance, or a “special case” change in zoning
planning and land development on a community- regulations. A board of zoning appeals, appointed
wide basis. Zoning legislation may regulate uses by the legislative body, hears and acts upon
of land. It also may regulate such things as the requests for variances from the zoning regu-
size of lots and buildings; minimum front, back lations. If a board agrees that applying a zoning
and side yard requirements; or the minimum regulation to a specific property is unreasonable,
number of parking spaces required for certain it will grant a variance. Generally, a board of
types of buildings, depending on the use. zoning appeals will try to grant the minimum
Planning commissions, appointed by the local variance necessary to resolve the conflict.
legislatures of political subdivisions, review land The two types of variances are an area vari-
use within the community and propose a compre- ance and a use variance. An area variance may
hensive land use plan. This plan serves as a guide permit a property owner to develop a property
for dividing the political subdivision into districts with narrower yard setbacks, smaller lot size,
or zones. The most common types of districts are larger building size, or fewer parking spaces than
residential, commercial and industrial. These those otherwise permitted in the zoning district
districts may be further divided. For example, where the property is located. A use variance may
a residential district may be restricted for only allow a property to be used in a way that is not
single-family homes, or an area may allow multi- permitted in a specific district (for example,
family buildings. a home-operated beauty parlor operating in a
A comprehensive plan may be adopted only residential district). Use variances tend to be
if the proposed zoning regulations are reasonable. more difficult to obtain because they are often
The local legislature, whether a city or village perceived as property re-zoning. In order to
council, board of township trustees or board of grant either type of variance, the board of zoning
county commissioners, is responsible for enact- appeals must apply standards that are incorporated
ing the plan and the zoning regulations that define into the zoning regulations. Zoning variances run
each zone. Because comprehensive plans and with the land and will not expire as long as the use
zoning regulations provide a blueprint for future continues.
growth and development, they should be period-
ically updated to reflect changes in the com- Planned Unit Development
munity. A planned unit development (or PUD) is a
Violation of a zoning regulation (for example, technique to provide flexibility for new construc-
establishing a commercial business in an area tion in a community. Instead of rigidly dividing
zoned for residential use only) is a civil rather land into exclusively residential, commercial and
than a criminal matter. Zoning inspectors may industrial zones, PUDs mix these and other uses.
issue orders to stop a violation. That might be Planners generally agree that a mix of residential
followed by a court action resulting in a penalty, and commercial development along with public
which might continue as long as the violation spaces such as parks can provide a very appealing
remains uncorrected. environment.
Because properties have different sizes, Planned unit developments are often part of a
shapes and topographies, applying a zoning zoning code. If they are not, many communities
regulation to a specific property may be unrea- allow them by variance or with a conditional use
sonable for either the property owner or the city permit. However, courts can view PUDs as re-

126
zonings, so local government officials must be as input from the public. In some communities,
careful about using the variance or conditional public input may include a ballot vote to approve
use procedure to allow PUDs to be implemented. or disapprove the development in question.
It is better for local governments to enact zoning Additionally, some sites are large and must be
provisions if they want to allow for PUDs, so that developed in phases. Thus, the approval process
standards are uniform throughout the community. can be ongoing.
Some common characteristics of a PUD
include: Covenants, Conditions and
• a large plot of land that is developed under
unified control and planned and developed as
Restrictions
In addition to government land use restric-
a whole;
tions, private party agreements and other
• a mix of compatible uses such as commercial,
restrictions also may control how owners use
residential, governmental (e.g., schools) and
their property. For example, certain restrictions
public spaces, or mixed single-family and
in a private purchase contract may dictate how
multiple-family units;
a home in a subdivision or a condominium may
• comprehensive plans for developing the par-
be built, designed or used. These restrictions are
ticular piece of land from the utilities to the
typically referred to as covenants, conditions and
aesthetics and relationship of the buildings to
restrictions (CC&Rs); they set forth conditions
one another (which can be so detailed as to
on uses, lot size, architectural design, setbacks
include predetermined site plans, floor plans
from the street, fence design or vehicle parking.
and building elevations);
If the terms of a private party agreement are vio-
• a program for the occupants of the district to
lated, a suit may be brought against the violator.
maintain the common areas and facilities; and
The violator may have to pay money damages or
• restrictive agreements to prevent incompatible
may be ordered to remove the violation (such as
changes to the structures and appearance of
a fence that was prohibited by the terms of the
the development.
private party agreement). The court injunction to
remove the violation also would prohibit future
The PUD’s mixed uses can provide for a
violations.
more dynamic, vibrant community as well as
A unique type of covenant that may arise on
more green space and public areas. Green space
residential property is a transfer fee covenant.
is often gained by clustering residential areas to
This covenant requires a fee to be paid to a third
achieve open space and preserve natural features
party (often the original developer) upon each
of the land. Most PUDs require a unified exterior
conveyance of the property. As of 2010, a transfer
appearance—such as the same color scheme
fee covenant cannot be placed on property in
and roofs on all units.
Ohio; however, such covenants may already
The process for getting a PUD approved is
exist in certain parts of the state. Although such
usually very complicated and extensive. The
covenants may be enforceable, FHA may not
approval process is likely to include a detailed
insure property burdened by such a covenant. A
review of the site plan by a local government’s
lawyer should be consulted if a title search reveals
planning staff, planning commission, zoning
a transfer fee covenant on a residential property.
board and often the local legislative body as well

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 For Journalists: bodies. Through open records requests and
Covering Property Law attendance at government meetings, journalists
can learn and expose how governments regulate
and negotiate property disputes (See Media Law,
Because property law is often extraordinarily Part XV).
detailed and also more locally driven than other Many rookie journalists are often assigned to
aspects of the law, journalists are advised to make local property development stories, about which
time to understand state laws and guidelines. Many they may know very little. Or they find them-
local businesses and officials work hard to abide by selves covering a major dispute between a
state laws, and state officials work diligently to landlord and tenant. In such situations, it is often
regulate all these transactions, but occasionally easy for tempers to flare and the law may be lost
journalists are the first to expose and report impor- in the dispute. Journalists are cautioned to spend
tant abuses and problems in the system. Knowing the time researching Ohio guidelines on these
what the state requires of these parties is an impor- issues to present viewers and readers with what
tant first step in exposing abuses. A second step is the law requires of the parties in property
gaining access to government records and attending discussions and disputes. Resources are provided
the local meetings of planning boards, town under “Web Links” at the end of this chapter.
councils, city governments and other public

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Chapter Summary
• Real property law deals with land, fixtures on land, movable property that is not
associated with land, and rights and other intangible interests that may be owned.
• The two main classifications of property are real property and personal property.
• Real property, real estate and realty refer to land, buildings and other fixtures on land.
These terms also may refer to different kinds of interests in land and to various rights
that go along with land or some interest in it.
• Personal property is anything that can be moved by its owner or possessor. Personal
property can be tangible or intangible.
• Full ownership of real property is called fee simple ownership, fee simple title or
sometimes just ownership in fee.
• A fee simple owner can grant ownership of his or her property to another person for
the duration of the other person’s life. This type of ownership is called a life estate.
The person who holds the life estate is called a life tenant.
• In Ohio, there are two different forms of property ownership where two or more own
the property: tenancy in common and survivorship tenancy.
• Ohio also recognizes transfer-on-death (TOD) affidavits that allow an owner to
designate one or more persons to whom the property will be transferred automatically
upon the owner’s death.
• A property owner may give temporary possession and use of a particular property to
another individual in return for the payment of rent or something else of value. If the
owner does this by means of a written agreement called a lease, the party to whom
possession of the property is given acquires a leasehold interest or leasehold estate.
• A lien is an enforceable claim against property to secure the payment of a debt or the
performance of some act. A mortgage is a lien on the real estate. Three other types of
liens are tax, judgment and mechanics’ liens.
• Sometimes a landowner will grant another person permission to use a portion of his
or her property for a specific purpose. Such permission may be either an easement or
a license.
• Rights to explore for and develop minerals and harvest timber are among important
real property interests that may be owned separately from the real estate itself.
• Property is a commodity, meaning it often changes hands from one individual to
another. There are many methods individuals use to acquire interests in real property.
• Fee interest in land is granted through a deed. A leasehold estate is granted by means
of a lease.
Continued on page 130

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 Chapter Summary continued
• A mortgage is an interest in land where the land is pledged to secure or guarantee
payment; it is created by a document called a mortgage deed or, simply, a mortgage.
• A conveyance is the transfer of an interest in real property.
• When someone dies owning or holding some interest in real property, that individual’s
interest must be transferred to another person or to an entity. That other individual may
be a beneficiary named by the original owner’s will, or entitled by law to the property
when there is no will. The other individual also may acquire the property of the deceased
because he or she owns the remainder interest to a life estate or because of a right of
survivorship. The transfer may also be made to the named beneficiary in a transfer-on-
death affidavit.
• Sometimes the title to real property or an interest in real property is transferred because
the original owner neglects his or her rights. Adverse possession is simply taking
possession and keeping possession continuously for 21 years, provided that the
possession is obvious and open, and that the landowner does nothing significant to
assert his or her rights as owner.
• Ownership of real property is a matter of public record. Every state maintains public
records of land and transactions and events affecting the ownership of land. In Ohio,
the county recorder of each of the state’s 88 counties maintains these records for the
land within its geographical borders.
• The most common real estate transaction is the purchase or sale of a home. The
elements involved in the purchase or sale of a home include a contract of sale,
financing, title examination and closing.
• The Environmental Protection Agency (EPA) is the federal agency charged with
implementing the environmental laws passed by Congress and the Ohio Environmental
Protection Agency (OEPA) implements state laws and regulations regarding air and
water quality standards; solid, hazardous and infectious waste disposal standards; water
quality planning, supervision of sewage treatment and public drinking water supplies;
and cleanup of unregulated hazardous waste sites. Any property purchase should
include an environmental inspection.
• The first time many people encounter aspects of real property law is when they rent
their first apartment or house. The law respecting such transactions is addressed by
sections of the Ohio Revised Code reviewing particular aspects of the rights,
obligations and remedies of landlords and tenants.
• A rental agreement or lease is a written or oral contract between a landlord (lessor)
and tenant (lessee).
• A rental agreement benefits and protects both parties and is an efficient way of
handling a business transaction. A written agreement may create a fixed term or a
tenancy from week to week, month to month, or year to year.
• Zoning is the process by which political subdivisions (cities, villages, townships
and counties) regulate land use by dividing themselves into districts or zones and
enacting regulations to control the buildings and uses within each district.
• A planned unit development (or PUD) is a technique to provide flexibility for new
construction in a community. Instead of rigidly dividing land into exclusively
residential, commercial and industrial zones, PUDs mix these and other uses.

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Web Links:
From the OSBA’s Law Facts pamphlet series:
www.ohiobar.org/lawfacts (search by title)
“What you should know about … Tenant/Landlord Rights and Obligations”

From the OSBA’s “Law You Can Use” column:

www.ohiobar.org/lawyoucanuse (search by title or topic)
“After Foreclosure: What You Should Know”
“Agricultural Districts Protect Farms and Farmers”
“Agricultural Easements Help Protect Farmland”
“Ask Questions When Using Title Insurance Agencies”
“Be Careful When Using Home Equity Loans”
“Before Foreclosure: What You Should Know”
“Brownfields Development on the Rise – But There’s Good Reason for Caution”
“Circumstances Determine When Tenants Can Terminate Lease Agreements”
“Eminent Domain: What Every Property Owner Should Know”
“Home-Buyers Should Determine Asbestos and Lead Paint Risks”
“Home-Buyers Should Determine Environmental Risks”
“Home-Buyers Should Investigate Water and Septic Systems”
“Homeowners’ Insurance Covers Wide Range of Goods and Services”
“Joint Economic Development Districts Aid Local Development”
“Joint Ownership of Property: Common Sense Advice for Older Persons”
“Know about Eviction Procedures in Ohio”
“Know about Evictions of Month-to-Month Tenants in Ohio”
“Know Basics of Condominium Law”
“Land Contracts Provide Financing Alternative for Some Homebuyers”
“Landowner or Tenant Could Be Responsible for Harm to Trespassing Children”
“Laws Govern Gardening”
“Medicaid Recipients Should Know Rules before Making Real Estate Decisions”
“Mold: An Old Contaminant Creates New Concerns for Homeowners”
“Ohio Law Protects Property Owners from ‘Recreational User’ Liability”
“Ohio Law Says Private Property Sometimes Can Be Taken for Economic Development”
“Ohio Line Fence Law Says Who Is Responsible for Fences”
“Planned Unit Developments Provide Flexibility for New Construction”
“Quitclaim Deed Transfers Property Without Ownership Guarantee”
“Realtors May Act as Agents for Both Buyers and Sellers”
“Reverse Mortgages Convert Home Equity into Cash”
Continued on page 132

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 Web Links continued
“Sorting Out Housing Options for Seniors”
“State Law Regulates Most Ohio Cemeteries”
“Tax Abatements Exempt Real Estate Taxes for Improvement Projects”
“Tenants Have Security Deposit Rights”
“Tenants Should Look Out for Intent-To-Vacate Clauses”
“Title Insurance Protects Owners and Lenders”
“Transfer-on-Death Affidavit Avoids Probate of Real Estate”
“Understand How Joint Economic Development Districts Work”
“Understanding Landowners’ Water Rights”
“Use Caution When Considering Foreclosure and Debt Mitigation”
“What College Students Should Know about Apartment Leasing”
“What You Need to Know about Renter’s Insurance”
“What You Should Consider When Granting an Oil and Gase Lease on Your Land”
“What You Should Know about ‘Fracking’ in Ohio”
“What You Should Know about Annexation”
“What You Should Know about Buying and Keeping a Home”
“What You Should Know Before Using ‘Free’ Gas”
“When the Rains Come …What You Should Know about Surface Water Laws”
“Zoning Laws Aid Community Planning”

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