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CLIENT ADVISORY - January 28, 2008
New Bill In Ohio Would Allow Cities To Foreclose On Nuisance Properties
by Larry R. Rothenberg, Esq.
A bill was introduced into the Ohio Legislature on January 22 that would empower cities to foreclose on "nuisance property". Nuisance properties are defined in the bill as those being vacant, and either: (1) out of compliance with various code requirements; (2) delinquent in the payment of real estate taxes; (3) established to be a nuisance; (4) used or occupied by a criminal gang on multiple occasions; or (5) illegally used in connection with gambling. It will not be necessary for the city to have a lien of its own on the property. Rather, under certain circumstances, it will be sufficient for the city to allege that there is a continuing existence of conditions causing the property to be a "nuisance".
If the city commences such a foreclosure, it will be required to join and notify the lienholders as parties in the case. Lienholders may have the case dismissed if they abate the nuisance within 45 days after receiving notice. The distribution of the proceeds of the foreclosure sale will be based on the same priorities as ordinary foreclosures.
In addition to the Cleveland Municipal Court which already has jurisdiction to handle foreclosures, Franklin County (Columbus) and Lucas County (Toledo), which also have housing or environmental courts, will now have jurisdiction to handle these "nuisance property" foreclosures.
The Ohio Bankers League raised serious concerns with the proposed legislation, because it empowers cities to allege that a property is a "nuisance" even for relatively minor code violations, such as vandalism. In addition, the requirement for notice to be given to the lienholders is not clearly defined in the bill.
Weltman, Weinberg & Reis will keep you advised of further developments with regard to this proposed legislation. If you have any questions on this information, please contact Mr. Larry R. Rothenberg, Esq. Larry can be reached at (216) 685-1135 or via e-mail at lrothenberg@weltman.com.
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.
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. ©2008