Although third-party purchasers are required to pay a deposit at the time they enter their bid at the Sheriff’s Sale, there has always been a customary waiver of that requirement where the bidder holds the first mortgage on the property.  The majority of the counties have now eliminated that customary waiver, and are now requiring that a deposit be paid at the sale, even by the holder of the first mortgage.  Unfortunately, there is no uniformity among the counties’ requirements.  Some counties are requiring a percentage, such as 1%, 5% or 10%, of the appraised value.  Other counties are only requiring a deposit sufficient to cover the recording costs for the deed, and yet there are a few counties that are still not requiring any deposit. 

For sales requiring a deposit of $1,000.00 or less, our firm will advance the amount needed, and will issue an invoice for reimbursement.  However, due to the volume of foreclosures which we handle, we cannot advance amounts greater than $1,000.00 for sale deposits, and we must require that you provide us with a check together with your bidding instructions.

In order to enter your bid, we must receive both your check and your bidding instructions at least five days prior to the sale date, so that we can deliver the check to our local counsel in the relevant county prior to the day of the sale.  In order to comply with the amended statute, we will also need the name, address and phone number of your representative (a natural person)  whom the city or any other interested party can contact with regard to building code violations or other issues regarding the property.

The State Sheriff’s Association convened a meeting of its Civil Justice Committee on September 17, 2008, and invited me to attend and provide input.  The goal of the committee is to make a recommendation to the sheriffs in each county, in an attempt to promote statewide uniformity.  The committee’s position is that based on language in the amended foreclosure statute, the sheriff has a duty to collect at the time of the sale, at least the amount of the recording costs for the deed.  We are hopeful that the committee’s recommendation to its membership will be to require a deposit in the minimum amount necessary.   However, each county is free to impose any requirement it deems appropriate.

For a county-by-county list based on information available to date, click here.

If you have any questions on this information, please contact Mr. Larry R. Rothenberg, Esq. Larry Rothenberg is the partner-in-charge of the Cleveland real estate and foreclosure department of Weltman, Weinberg & Reis Co., L.P.A. He is the author of the Ohio Jurisdictional Section contained within the treatise, “Dunaway, The Law of Distressed Real Estate”. The firm handles foreclosures and related litigation throughout Ohio, Kentucky, Indiana, Illinois, Pennsylvania and Michigan. Larry can be reached at (216) 685-1135 or via e-mail at lrothenberg@weltman.com.

Client Advisory is published by Weltman, Weinberg & Reis Co., L.P.A., an organization providing comprehensive creditor representation.  The information contained in this advisory is a summary of legal information and is not intended to constitute legal advice on specific matters or create an attorney-client relationship.  Contact any of our offices or visit our website at realestatedefaultgroup.com for more real estate related information, company facts and attorney profiles. (c)2008