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Buying property is considered a vitalpart of living the “American Dream.”While most people buy property forpersonal enjoyment, some individu-als make a business of buying, sell-

ing, leasing, or renting property. So, whethersomeone is a homeowner, business owner, realestate magnate, or merely interested in pur-chasing land as an investment, it is importantto understand the large and complex world ofproperty law, and in this case, real property law.

Kinds of Property

The word “property” has many meanings.In a strict legal sense, it signifies ownership. Asa practical matter, it refers to objects that canbe owned. The two main classifications of proper-ty are real property and personal property. Realproperty law deals with land, fixtures on land,and rights and other intangible interests relat-ing to land that are capable of ownership. Itmay include land, a single-family house, a con-dominium, or a vacation home. Personal prop-erty is anything that is not related or attachedto real estate; it may be tangible or intangible.Personal property might include cars, clothes, fur-niture, refrigerators, tools and cash as well as var-ious rights or interests such as stocks or bonds.

(Different aspects of personal property law are dealtwith in this section, Part VI, “Contracts,” and Part VII,“Business Transactions and Organizations.”)

Real PropertyThe terms real property, real estate and real-

ty refer to land, buildings and other fixtures onland. They also refer to different kinds of inter-ests in land and to various rights that go alongwith land or some interest in it.

The term land includes the actual surfacearea and everything under and above a parcelof ground. In the past, ownership of a parcel of

land began at the center of the earth andextended through the boundaries of the parcelout into space. Today, the airspace above theparcel is not exclusive; it is considered to bepart of the public domain and subject to rights ofnavigation, which means that members of the gen-eral public can travel through or use that airspace.

Generally, a fixture is something not natu-rally a part of the land, but affixed to the landin such a way that it cannot readily be removedwithout damage. Because buildings are usuallyaffixed to land, they are thought of as realproperty. A furnace is personal property untilit is installed, when it becomes a fixture. Ifsomething on the land is portable, such as amobile home, it may or may not be consideredpart of the land, depending on how it is installed.For example, crops and trees are part of the landwhile growing, but become personal propertywhen they are harvested. The same is true ofminerals, which are part of the land in theirnatural state, but become personal propertywhen mined, quarried, pumped, or otherwiseremoved. Fixtures such as crops and mineralsare sometimes referred to as mixed property,because they have some characteristics of bothreal and personal property.

There are many degrees of ownership ofland, ranging from full ownership—that is,including all rights relating to it, such as theright to sell it or give it away—to rental (per-mission from the owner to use a portion of theland for specific purposes). (Of course, all interestsin property are subject to the rights of the commu-nity. Thus, even the full owner of real estate mustcomply with zoning and building codes, for exam-ple.) Someone who has less than full ownership ofland is said to have a partial interest in the land.Certain types of ownership carry particular rights,such as the right of a landowner to receive anyrent the land might yield.

Part VIIIproperty law

“To those who are engaged in commercial dealings, justice isindispensable for the conduct of business.”

– Cicero

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Personal PropertyPersonal property is anything that is not

real estate or affixed to real estate. Personalproperty can be tangible or intangible.

Tangible personal property can be trans-ported, seen and touched. Examples of tangiblepersonal property include cars, clothes, furni-ture, refrigerators, tools and cash.

Intangible personal property includes vari-ous rights or interests that cannot be seen ortouched. Examples include ownership of stocksand bonds, ownership of a debt and the rightto bring a legal action. Stocks and bonds mere-ly represent the value of the underlying inter-est; it is not the underlying interest. For exam-ple, a stock certificate represents an amountand kind of ownership interest in a particularcorporation.

Personal property includes money in a bankaccount, interest in a joint bank account, or apayable-on-death account. A joint-and-sur-vivorship bank account is an account in thenames of two or more individuals who have anequal right to the assets in the account withownership passing to the survivor(s) on thedeath of one of them. The payable-on-deathaccount (POD) is an account owned by one per-son during his or her lifetime, which passes, onthe owner’s death, to one or more named persons.

Personal property is subject to a differentset of rules from real property. Because there issuch a wide variation in types of personal proper-ty, a variety of rules govern its ownership and use.

Types of Real PropertyOwnership

When an individual is said to own realestate, it usually means that he or she is thefull owner of a particular piece of property.

Full ownership is only one of the ways to ownreal property. Or, someone with a lesser degreeof ownership might have an interest in a prop-erty for a lifetime (life estate), or for a periodof years, months or even weeks. Ownershipalso may be shared in various ways.

Property may act as security for debt, andthe security interest is a kind of ownership. Anindividual may own an interest in real proper-ty merely by having the owner’s permission touse it in a certain way, such as where theowner of a large yard allows the neighborhoodchildren to play ball there. Many differentkinds of interests can be separated from thefull ownership and can be owned or disposedof separately. For example, the mineral rights ofa piece of property can be sold while the ownercontinues to live on the land.

Fee SimpleFull ownership of real property is called fee

simple ownership, fee simple title, or sometimesownership in fee. The distinguishing character-istic of a fee simple title from lesser grades ofownership is the right to pass full ownership tosomeone else, whether during the originalowner’s lifetime or upon his or her death.

Fee simple ownershipalso gives the right to . . .

• use the real property as the owner sees fit;

• collect rents or profits the property yields;

• mortgage the property;

• limit the use of the property by other people;

• allow others to use the property; and

• sell, rent or lease the property.

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Fee simple ownership of real property issometimes described as absolute ownership.This description is misleading because thereare substantial limits on how a fee simpleowner may use the land (real property). Forexample, the fee simple owner must pay taxeson the land, abide by zoning and other restric-tions on the use of the land, and honor therights of others who own an interest in theland (tenants, lessees, mortgagees, holders ofeasements, etc.). Further, the fee simpleowner’s use of the land must not interfere withthe rights of other landowners or the public.

Life Estate and Remainder InterestA fee simple property owner can grant own-

ership of the property to another person forthe duration of the other person’s life. Thistype of ownership is called a life estate. Theperson who holds the life estate is called a lifetenant. (The term tenant may be confusing. Inthis context, tenant does not refer to a rentalarrangement but to a kind of ownership in realproperty.) With certain important exceptions, alife tenant can treat the property in much thesame way that a fee simple owner can treat the property.

For example, a life tenant has access to theproperty and is entitled to use the property, tolease it, and to retain any rents or profits theproperty may yield. However, by definition, thelife tenant’s interest in the property ends at hisor her death. The life tenant cannot sell a feesimple interest in the property. Further, the lifetenant cannot destroy or waste the propertybecause such action affects the rights of those whowill own the property after the life tenant dies.

When a life estate is created, a remainderinterest is also created. The person who holdsthe remainder interest (called the remainder-man) automatically acquires the fee simple titleto the property when the life tenant dies. Theterms of the original grant determine whether

the fee simple title stays with the remainder-man. If no remainderman is named, fee simpleownership reverts to the original owner or theowner’s heirs upon the death of the life tenant.

Types of Joint or CommonOwnership

In Ohio, there are two different forms ofownership of real property where two or moreown the property: tenancy in common and asurvivorship tenancy.

In a tenancy in common, each owner has anundivided, fractional share of the property.Depending on how the tenancy in common iscreated and the transactions that subsequentlytake place, the shares may be equal or unequal.Regardless of the size of an individual’s share,each tenant in common enjoys full ownershipof his or her share, and can sell, mortgage, use,or dispose of it as a full owner. On his or herdeath, the tenancy passes to heirs or to thosenamed in the tenant-in-common’s will.

For example, if one tenant wishes to take ashare in the sense of taking control of his orher rights in the property, or to obtain themonetary value for that part, the tenant mayfile a lawsuit to divide or partition the proper-ty. If partition is ordered, the property may bephysically divided and a fee simple portiongiven to each tenant in common, or the proper-ty may be sold as a unit and the proceeds divid-ed among the tenants in proportion to theirrespective shares.

In Ohio, a survivorship tenancy is a form ofownership created by statute. A survivorshiptenancy is similar to tenancy in common,except that joint tenants have a right of sur-vivorship. That is, when one joint tenant diesstill owning his or her share, the share passesautomatically to the surviving tenant(s). Thus,a survivorship tenancy cannot be transferredby will, as the nature of this form of ownership isthat it automatically passes to the survivor(s).

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The right of survivorship also may be endedwhere, for example, all joint tenants transfer orconvey their interest.

In most states, the right of survivorship isautomatically created when a joint tenancy iscreated. In Ohio, however, the right of sur-vivorship must be specifically described in thedocument that creates it. The statute allowingjoint tenancy with right of survivorship statesthat this law should be liberally interpreted tocomply with the intent of the owners. How-ever, the legal document that creates the jointtenancy must use clear survivorship language. Ifthe document does not have such a provision, theresult will probably be tenancy in common.

It should be noted that joint and survivorownership is commonly used for both personalproperty and real property—a bank accountwith more than one name on it, for example,normally is joint and survivor property, be-cause the signature card that opens the accountusually contains survivorship language.

Tenancy by the entireties is essentially a sur-vivorship tenancy created by a husband andwife. Ohio allowed tenancy by the entireties bystatute from 1972 to 1984. Under it, each indi-vidual owned the entire property. As with jointtenancy, survivorship is a predominant featureof tenancy by the entireties. Tenancy by theentireties can no longer be created in Ohio,although those interests that were createdwhile the statute was in effect are still valid.

Condominium ownership is a hybrid of indi-vidual and group ownership. An individualcondominium owner normally owns a portionof the property (such as one apartment) out-right, and a portion (the common areas) as atenant in common. For example, each residentmight be a fee simple owner of the apartment(unit) and be a tenant in common with otherapartment owners as to halls, stairways, recre-ational facilities, walkways and other commonareas, including the ground on which the

building stands. Of course, because each ownerhas an interest in these common areas, he orshe also must contribute toward their mainte-nance and repair.

Leasehold EstateA property owner may give temporary pos-

session and use of a particular property toanother individual in return for the payment ofrent or something else of value. If the ownerdoes this by means of a written agreementcalled a lease, the party taking possession ofthe property acquires a leasehold interest orleasehold estate. In such a case, the landowneris called the lessor and the person to whom theproperty is rented is called the lessee or tenant.The term of the lease may be weeks, months,or years. Many residential property leases arefor one year, whereas business property leasesare often for five, 10, or 20 years or longer. Alease may provide one or more renewal options.An example of a renewal option is a provisionthat states the tenant may extend the lease foranother year at a rate that will be adjusted by acertain formula. This gives the tenant the secu-rity of knowing that the lessor will not leasethe property to someone else at the end of theterm, without first giving the tenant the rightto stay.

Commonly, leases state that a tenant or les-see cannot sell a leasehold interest (that is, sub-let the property or assign the lease to someoneelse without the lessor’s [owner’s] permission).

If the lessor sells fee simple title to the prop-erty during the term of a lease, the new ownermust honor the lease.

Sometimes a lease provides for automaticrenewal; that is, if the lessee does not tell theowner he or she is going to leave the propertyat the end of the term, the lease is automatical-ly renewed. Sometimes the lease will specify atenant’s holdover (failure to leave the property)is not an automatic renewal for a full year, but

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converts the tenancy to one running frommonth-to-month, week-to-week, or at will.

Obviously, it is very important to read andfully understand the specific terms of a particu-lar lease or rental agreement, as the terms canvary widely.

Tenancy from Month-to-Month,Week-to-Week, or at Will

Rental arrangements not bound by a leasemay be either by the month or at the pleasureof the parties (See “Landlord and Tenant” onpage 108 for more information.) Usually, whenresidential property is rented without a lease, itis on a month-to-month basis. The tenant isentitled to possession for one month at a time,and if he or she stays on the premises for evenone day into the following month, occupancy isrenewed for that entire month. One month’snotice by either the landlord or tenant is neces-sary to terminate a month-to-month rentalagreement, and one week’s notice is necessaryto terminate a week-to-week agreement.

Transient accommodations, such as fur-nished rooms, are often rented by the day, andrental arrangements of this sort can usually beterminated by either party without advancenotice, that is, terminated at will.

Liens and MortgagesA lien is a claim against property to secure

the payment of a debt or the performance ofsome act. The most common form of lien iscreated when an individual mortgages his orher property to another person to ensurerepayment of a loan.

That’s really what a mortgage is about: abank loans a large amount of money to realestate buyer(s), but nobody is likely to loan abuyer $100,000 without some protection. Thatprotection is the signed mortgage that gives thebank a special kind of lien on the property.Because of the mortgage, the real estate owner

cannot convey (sell) a fee-simple interest in theproperty to someone else without first payingoff the bank loan. And if the real estate ownerfails to pay this loan, the bank can foreclose itslien, sell the property, and pay off the loanfrom the proceeds of the sale.

There are many other types of liens:• A tax lien attaches to property at the

beginning of each tax year, even though theactual amount of the property taxes has notbeen determined and the taxes are not yetdue. A tax lien is just like a mortgage lien,but it exists automatically, because all proper-ty owners have a duty to pay real estate taxesto the community. To ensure that those taxesare paid, the community automatically hasthe protection of this lien on the property. Iftaxes are not paid for a long enough period,the community—that is, county authorities—can have the property sold in order to pay offthe tax debt.

• A judgment lien may be used when someone has won a money judgment in a lawsuit andwants to make sure to collect the money thatis owed. Let’s say Mr. Smith was awarded$25,000 from a lawsuit against Mr. Jonesover injuries sustained in a traffic accident. Ifthe $25,000 is not paid, Mr. Smith can file ajudgment lien on Mr. Jones’s property, andultimately can ask the court to have Mr.Jones’s property sold, to generate cash to payoff the $25,000 judgment.

• One way of making sure an arrested person will appear for a criminal trial (bail) is forthe state to place a lien on the defendant’sproperty by the terms of the bail bond hesigns.

• A mechanics lien protects those people who build or repair homes or other buildings. Ifthe owner does not pay the bill within a cer-tain period of time, the party supplying laboror materials can file documents to secure alien against that property. Again, the proper-

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ty cannot be sold to a third person withoutpaying the amount owed, and the lienholder(for example, the contractor) ultimately canask the court to have the property sold andthe proceeds of the sale applied to pay theoutstanding bills.

Property is frequently subject to many liens.In such cases, it is desirable to avoid a series offoreclosures and forced sales. Accordingly,when one lienholder sues to foreclose, all lien-holders are notified and their claims dealt within the same suit. This process is called marshaling of liens.

When there are many liens, the propertymay not be worth enough to cover all liens, soit is necessary to determine the priority ofliens. The general rule is that the first lien intime is the first lien in priority (“first come,first served”). Thus, when the property is sold,the first lienholder will be paid. If enoughmoney is left, the second lienholder will bepaid, and so on in order of priority. The priori-ty of some liens is outlined by statute. Thus,for example, tax liens almost always take prior-ity over other kinds of liens.

Easements and LicensesSometimes a landowner will give someone

permission to use part of his or her propertyfor a specific purpose. Such permission may beeither an easement or a license.

An easement is formal permission, grantedin writing by deed or similar document, to useanother’s property. An easement runs with theland, meaning it remains valid even though theproperty involved is rented, mortgaged, sold, ortransferred through a succession of owners.Normally, an easement is automatically can-celled when it is no longer used for the specificpurpose for which it was granted. Easementsare commonly granted to utility companies toinstall and maintain water, sewer, gas, electric,and telephone and cable lines across private

property. Sometimes an owner whose property hasno entryway (ingress) or exit (egress) will acquirean access easement across adjoining property.

A license is informal permission to useanother’s property. It may be in writing, but ismore often oral and may be implied from theconduct of the parties. Licenses do not runwith the land, so that the holder of a licensecannot sell or otherwise transfer it to someoneelse. Also, the property owner can terminatea license at any time. A typical example of alicense would be oral permission to hunt onan individual’s property.

Because an easement is a genuine interestin property but a license is not, a land disputemay arise about what kind of permission wasgiven. If the court decides that an easementwas granted, the permission is an enforceableproperty right, whereas if the court decidesthat only a license was granted, then no prop-erty right is involved.

Mineral Rights and SimilarInterests

Rights to search for and develop mineralsand harvest timber are among important realproperty interests that may be owned separate-ly. Typically, these activities require a lot ofmoney, so landowners often lease mineral orlumber rights to professionals. For example, alandowner might lease the mineral rights to hisor her property to an oil-exploration companyin return for a flat payment when the leaseis signed, plus a royalty of, say, one-eighthof the value of any oil or natural gas broughtto the surface. Leases to mine coal, quarrystone, sand, or gravel usually involve fixed rentrather than royalties. Timber leases often aregranted for a single, flat payment, but sometimesalso include payment based on the amount oftimber cut.

Sometimes, ownership of the property itself,and of the mineral rights, is transferred sepa-

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rately. Thus, there are many areas in Ohio, forexample, where mineral rights were transferredmore than 50 years ago; the land is now ownedby grandchildren of the original landowner,and the original oil company long ago sold outto a major producer—but the land is still beingfarmed, and the wells are still producing oil.

How Real PropertyOwnership IsTransferred

Property is a commodity, or product, mean-ing it often changes hands from one individualto another. An individual can acquire an inter-est in real property through:• a written document, such as a deed, lease,

mortgage, or other conveyance;• inheritance;• the operation of law (such as a property

transfer following abandonment by the owneror a transfer ordered by a court following alawsuit); or

• adverse possession or prescription, that is, through “squatter’s rights.”

Deeds, Leases, Mortgages and other Conveyances

Fee-simple interest in land is generally grant-ed through a deed. A leasehold estate is grantedby means of a lease. A mortgage is an interestin land where the land is pledged to secure orguarantee payment; it is created by a documentcalled a mortgage deed, or simply a mortgage. Aconveyance is any transfer of an interest in realproperty, whether done by deed, lease, or mort-gage. Deeds, leases and mortgages are not onlyconveyances (transfers) of real property inter-est, but they also may be contracts or containedin contracts, meaning that other rights and

obligations may be spelled out, which must behonored by the parties.

The higher degrees of ownership in land arealmost always granted by means of a deed orsimilar document that:• names the person making the grant (the

grantor) and the person to whom the grant isbeing made (the grantee);

• describes the property or interest being granted in formal, technical terms;

• is signed by the grantor; and• is acknowledged by the grantor as his or her

“free act and deed.”In a warranty deed, the grantor guarantees

that he or she has legal authority to transferthe property and will defend the title to theproperty against all claims of other people. Ifthe grantee’s title is successfully challenged at alater date, the grantee has a claim against thegrantor based on the grantor’s warranty.Warranty deeds are used to convey fee simpletitle. A quitclaim deed is similar to a warrantydeed, except that it does not guarantee thegrantor’s title to the property. The effect of aquitclaim deed is to convey the grantor’s inter-est in the property (if he or she has any), with-out guaranteeing that he or she has any inter-est to convey, or without guaranteeing that theproperty is free from liens or other claims.Quitclaim deeds are often used to adjustboundaries, correct errors in previous deedsand to obtain releases in land disputes.

A lease is used to bind a property rentalagreement and is both a contract and a transferof an interest in the property. A lease namesthe property owner (the landlord or lessor) andthe renter (the tenant or lessee) and describesthe premises involved. It states the period ofthe lease and the amount and method of pay-ment of the rent. The lessor usually promisesto protect the lessee’s possession and “quiet enjoy-ment” of the property. The lessee promises to paythe rent as agreed, use the premises for proper

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purposes, protect the property from undueharm and return it in good condition when thelease expires. The terms of a lease frequentlycover a variety of other matters, such as renew-al, holdover and assignment.

A mortgage is similar to a deed, except thatthe mortgage lender’s ownership of the proper-ty is conditional rather than absolute. A mort-gage states the purchase price and terms for therepayment of the debt, as well as the languageusually found in a deed. The borrower or mort-gage holder may have to take steps to protectthe lender’s security, such as paying the taxeswhen due and keeping various insurance poli-cies up to date.

Further, it states that if the borrower ormortgage holder pays the debt in full as agreed,the mortgage will become null and void and thelien will be released; but if the debt is not paidaccording to the terms of the promissory note,the lender can ask a court to foreclose themortgage and transfer full ownership of theproperty to the lender.

Transfer by InheritanceWhen someone dies owning or holding

some interest in real property, that individual’sinterest must be transferred to another person.That other individual may be a beneficiarynamed by the original owner’s will, or the per-son entitled by law to the property when thereis no will. This other individual also mayacquire the property of the deceased because heor she owns the remainder interest after a lifeestate, or because of a right of survivorship.Ohio also recognizes transfer on death (orTOD) deeds. Such deeds transfer ownership toan individual named in the deed upon thedeath of the property owner. TOD deeds differfrom right of survivorship deeds in that sur-vivorship property is owned jointly by the twopeople during the life of both of them, whereasownership of TOD property goes to the second

individual in the deed only upon the death ofthe title owner.

A feature that distinguishes real propertyfrom personal property is that real propertyautomatically belongs to the successor on thedeath of the lifetime owner. When an individ-ual has a right of inheritance or survivorship inreal property, that interest passes when theproperty owner dies. Title to personal property,on the other hand, is not automatically assignedto heirs. It should be noted that although the titleto real property passes immediately upon death,real property and interests in real property mayhave to go through an estate administrationprocess to ensure that the deceased’s debts andtaxes are paid and that the title to the propertyis properly recorded in public records. (See PartIX, “Probate Law,” for a more complete discussionof inheritance and estates.)

Transfer by Operation of LawOwnership in real property may be trans-

ferred without a formal procedure. Such atransfer may occur as the result of a judgmentin a lawsuit. For example, a divorce decree, orthe court order in dissolution of marriage thatapproves a separation agreement, may awardthe family home to the wife (or husband), andthe decree, or order, may have an effect similarto a deed. Another method for transferring own-ership of land is accretion, where, for example, thenatural flow of a stream erodes soil from one indi-vidual’s land and deposits it on another’s proper-ty. In this case, the amount of one owner’s landis reduced, while the other’s is increased.

Transfer By Adverse Possession or Prescription

Sometimes the title to real property or aninterest in real property is transferred becausethe original owner neglects his or her rights.For example, an individual may acquire title toanother person’s real property by adverse pos-

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session (which, in lay terms, is something like“squatter’s rights”). Adverse possession is sim-ply occupying property without permissioncontinuously for 21 years, provided that theoccupation is perfectly obvious and that thelandowner does nothing significant to asserthis or her rights as owner. Sometimes entiretracts of land are acquired by adverse posses-sion, although the usual case involves a smallportion of someone’s property that an adjoin-ing owner uses for 21 years. For example, oneindividual may build a fence three feet into hisneighbor’s side of the property line, withoutrealizing it is the neighbor’s property. If theneighbor fails to dispute the fence’s locationand this situation continues for 21 years, theindividual who built the fence will acquire titleto the property as his own by operation of thislegal principle.

Similarly, rights to use real property,notably easements, may be acquired by pre-scription, or by actual use coupled with thelandowner’s failure to prevent the use. Anexample of a prescriptive right is a right-of-wayacquired over another’s property by using theproperty for driveway purposes for a substan-tial period of time without complaint by theowner; the non-owning person acquires aneasement by prescription.

Encouraging Unrestricted TransferFeudal land laws in medieval times allowed

the concentration and retention of land (andthus wealth and power) in the hands of a fewfamilies, thus stifling economic growth. Inresponse, society developed a policy that landshould be freely transferable. The law graduallydeveloped legal rules implementing this policy.The proper development, use and transfer of landis essential to the health of our national economy.

Adverse possession is an outgrowth of thispolicy to encourage free transferability of landby allowing owners who neglect their property

rights to lose them. The law generally does notpermit grantors (those who transfer their prop-erty) to keep future owners from selling, leas-ing, mortgaging, or otherwise disposing of theproperty as the future owners see fit.

The rule against perpetuities is another rulethat encourages free transfer of property bylimiting the period of time a property ownercan delay a change of ownership. This rulestates that any grant of interest in real propertyin the future must take effect, if at all, withinthe period of the life or lives of beneficiariesliving at the time of the grant, plus 21 years.(The rule against perpetuities is discussed in PartIX, “Probate Law,” at “Limitations On Wills;Special Provisions.”)

Land Records

Ownership of real property is recorded in agovernment office for the owner’s protection.Under the law, if an individual’s ownershipinterest is not made a matter of public record,he or she may not be able to assert title—especial-ly against innocent purchasers from a formerowner. Every state maintains public records ofland and transactions and events affecting theownership of land. In Ohio, the county recorderof each of the state’s 88 counties maintainsownership records for the land within its geo-graphical borders. A careful search of theserecords will reveal the status of the record titleor ownership of any given parcel of land.

Necessity for Land RecordsJust because someone lives in a house on a

certain property does not mean that person isthe property owner. The actual owner may ormay not live on the land. Further, the actualowner of the land may be an international cor-poration with headquarters in the Far East.

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Consequently, some system of land records isnecessary to keep track of land titles and inter-ests. The primary value of land records is togive notice to anyone examining these recordsof the existence and nature of interests in, andclaims on, real property.

An individual with an interest in real prop-erty has the responsibility of filing documentsto prove he or she has a right to that property.Failure to file does not, in itself, destroy theinterest involved, but it may prevent the indi-vidual from taking action against anyone whomight challenge that interest.

If a property seller should try to challengethe buyer’s interest in the property, it would bedifficult, since the seller cannot argue he or shedid not know about the transaction. However,where the new holder of the interest has notrecorded that fact, he or she may not be able toassert a valid claim against a third person whoacquired the property without knowing aboutthe holder’s claim. The reasoning behind this isclear. Since the holder’s claim, while valid, wasnot recorded in public records, others whomight have a potential interest in the propertycannot be expected to know about the claim. Infact, a third person may acquire the real prop-erty innocently, relying on public records.

Or, let’s suppose a landowner mortgages theproperty as security for a loan, but the lenderneglects to file the mortgage deed in the countyrecords. Later, the owner sells the property to athird person who does not know about theunrecorded mortgage. The mortgagee (lender)is now powerless to foreclose its mortgage onthe real estate, because its claimed lien on theproperty was not made a matter of publicrecord. The property that secured the mortgagehas been transferred to a third party who hadno knowledge of the mortgage. If the mortgagehad been filed, it could have been foreclosed.The buyer legally would have been presumedto know about the existence of the mortgage,

even if the buyer neglected to examine thepublic record.

Types of Land RecordsIn Ohio, the county recorder’s office has

records of mechanic’s liens, property bondsposted for bail, deeds, mortgages and indexesfor these records. The most numerous are therecords of deeds and mortgages. Mortgages anddeeds filed for record are copied in detail andbound. This information is also maintained oncomputer databases. When a deed or mortgageis recorded and placed in its proper book, thevolume and page where it appears is noted inthe general index. The simplest form of index isarranged alphabetically according to grantors(sellers), with a reverse index of grantees(buyers). In many counties, indexing and copy-ing are in electronic files or on microfilm, andbooks are no longer used for new filings.

A land registry is another important set ofland records kept in some counties, and is partof an entirely different and separate system ofrecording. Land registration requires a courtproceeding (a land registration suit) to estab-lish the status of the title. Once the status ofthe title is determined, a certificate of registra-tion is filed and all mortgages, liens, subse-quent transactions and other claims are notedon the certificate. The system is called the“Torrens” system, and registered land is oftendescribed as “Torrenized” land. Such certifi-cates are used in only a few Ohio countiestoday. Although the original goal of land regis-tration was to compile all records relating to aparcel on a single certificate, and thus to sim-plify record-keeping, in actual practice it hasturned out to be more complex. Therefore, reg-istration has become unpopular.

The county recorder’s office is the reposito-ry for plats and surveys. A plat is a map of sub-divided land, showing the various lots, the por-tions of the land dedicated for roads or other

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public uses, and the easements for utilities andother features. Surveys are exact descriptionsof land parcels using “compass calls” and pre-cise measurements that come from actualobservation and measurement by means ofinstruments such as a compass, transit, theodo-lite, or surveyor’s chain.

Other county officials also keep important landrecords. For example, the county auditor andcounty treasurer are responsible for keeping trackof property taxes. (Taxes are mentioned herebecause they act as liens, or charges, on real prop-erty.) The auditor’s tax maps can be used to iden-tify property and are often the starting point for atitle search. Also, records kept by the clerk of com-mon pleas courts must be searched because law-suits and judgments can affect the title to prop-erty. Similarly, probate court records areextremely important in determining the statusof property ownership. The county sheriff alsokeeps a record of foreign judgments filed in thecounty (a foreign judgment being one renderedin a court in another county). Thus, if a judg-ment is issued in a lawsuit in Montana againstsomeone who owns property in Ohio, the for-eign judgment can be recorded in Ohio andthereby becomes a lien on the Ohio property.

Descriptions of PropertyThe usefulness of a public land record often

depends on its accuracy. There are severalways to describe a parcel of real property, butthe most common method includes some sortof map reference to locate the parcel in thecounty, plus a series of bearings and distancescalled “metes and bounds,” describing theexact boundaries of the parcel. If property issubdivided and platted, a parcel can be accu-rately described by giving the subdivision name,lot number and location of the recorded plat.

Title Examination; Marketable TitleSearching land records and determining the

status of land titles is a job for professionalsbecause of the many different kinds of interestsin real property, and the complexity of landrecords. An attorney should be contacted byany person interested in finding the title to aparticular piece of property.

A typical title examination is a backwardsearch of the records, beginning with the pres-ent owner and tracing back through each pre-ceding owner. The object of this examination isto establish the chain of title. The presentowner’s claim is good if his or her title provesto be part of an unbroken chain of ownership.

In a complete title examination, the chain oftitle is taken back to the original source, which,in Ohio, will vary depending on the location ofthe property. The original sources of Ohioproperty usually date back to land grants fromCongress or from various state legislatures(especially Virginia and Connecticut, both ofwhich granted land in the “Ohio Country” toRevolutionary War veterans after the war aspayment for their services).

A complete title examination is tedious andcan be difficult or impossible to obtain. Manyearly records have been destroyed, as nearlyevery courthouse in Ohio has been damaged ordestroyed by fire at least once. Further, olderrecords are not reliable because the men whocreated them were mostly illiterate and usedcrude instruments. Harsh and hostile environ-mental conditions didn’t help matters. Old landdescriptions can be irritatingly vague. They canread, for example:

“Beginning at a clump of black locust located at the northeast corner of the Peter Schweitzer farm, then northeasterly 250 rods, more or less, to a large flat rock on the southerly bank of Moccasin Creek.”

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There are numerous potential difficultieswith this description. For example, the survey-or’s compass was inaccurate; the locust treesdied of natural causes or were cut for fenceposts; the record of Peter Schweitzer’s farmwas possibly destroyed in the courthouse fireof 1831; and the large flat rock could have beenwashed away in the 1913 flood when MoccasinCreek cut a new bed, etc.

In Ohio, complete title examinations areusually unnecessary. Statutory or written lawsset the rules about what constitutes a mar-ketable title (one that can be relied upon whenbuying and selling property). Standards forsearching titles have been established by thecourts, title insurance companies, lenders andthe Ohio State Bar Association. Under Ohiolaw, if a title search shows that there is anunbroken chain of recorded title that goes back40 years, it is considered proof of fee title.Further, it can be assumed that thecurrent owner has fee title, that is,the right to pass title. This right topass title is established by the firsttitle recorded 40 years prior to thesearch, called the root of title.

It must be noted that a titlesearch often must go beyond the rootof title. For example, a 99-year lease,or easement, which was effective in1950 would be beyond 40 years of asearch conducted in 2001, but stillcould affect the title to the property.In such a situation, fee title could bepassed, but the title might be subjectto the lease or easement made in1950, which would not be found ifthe search were limited to 40 years.Many title examiners follow a 65-year standard.

Purchase and Sale of Real Estate

The most common real estate transaction isthe purchase or sale of a home. This sectionoutlines some of the matters to be consideredin purchasing or selling a home, including acontract of sale, financing, title examinationand closing.

Contract of SaleReal estate brokers use one of several stan-

dard form contracts (developed by their legaldepartments) for the purchase and sale of resi-dential property. The contract contains anoffer by the prospective buyer, with a space foracceptance by the seller. Frequently, offers arelimited in time; that is, the offer is automaticallywithdrawn if it is not accepted by a specified time.

What the offer does...• identifies the premises, usually by street address;

• states the proposed terms of the purchase, such as amount

of down payment, type of financing and maximum interest rate;

• specifies the type of evidence or proof of title (certificate of

title, abstract of title, or title insurance) to be furnished by the

seller;

• provides for payment of unpaid taxes and assessments

(usually these will be pro-rated between buyer and seller, based

on the amount of taxes accrued but not yet payable when the

sale is completed);

• lists the various kinds of personal property to be included in the

transaction, such as rugs, drapes, dishwasher and other items;

and

• states other terms and conditions.

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As used in the chart, premises means landplus any buildings upon the land. It can alsomean a particular part of a building.

Both parties are bound by the contractwhen the seller accepts it. If the buyer defaults,the seller may hold the buyer liable for the dif-ference between the contract price and theprice at which the seller is eventually able tosell the property (if lower than the originalcontract price). If the seller defaults, the buyermay compel the seller to specifically performthe contract, or may sue for damages. In eithercase, liability can have serious consequences. Abuyer should not sign an offer until he or shehas read all of it and understands all of theterms. Similarly, a seller should not accept acontract (the offer to purchase) until he or shehas read all of it and understands all of theterms. If either party has any questions, anattorney should be consulted before any paper-work is signed.

In Ohio, certain transferors of real estate,including home-sellers, must provide a disclo-sure form around the time the contract issigned. On this form, sellers must summarizewhat they know about any problems with thewater supply, the sewage system, the walls andthe foundation, the presence of hazardous sub-stances, such as lead-based paint, asbestos, andradon gas and any other material defects. Incertain situations, when undisclosed defectsare discovered before the closing, the buyermay rescind the contract without any liability.

This law does not apply to a number ofcommon transfers or sales. For example, it doesnot apply to sales of new homes that havenever been inhabited, sales to persons whohave already inhabited the property for oneyear or more, or in general, to transfers madeas part of a court order. Federal law alsorequires sellers to advise buyers if a home wasbuilt before 1978, and to allow the buyers toinspect the home for lead-based paints.

Finally, buyers should understand their rela-tionship with a real estate agent, whether theagent is hired by the buyer or the seller.Generally, the agent works for the seller. (Thebuyer’s agent shares in the commission thatresults from a sale.) A buyer should ask theagent to provide an agency disclosure statement(a statement that explains the agent’s legal rela-tionships to the seller, the broker, the buyer, etc.)when beginning a relationship with the agent.

Financing the PurchaseMost people borrow money to buy a house.

The usual ways for financing are a convention-al mortgage, an FHA or VA mortgage, a mort-gage assumption, or a land contract.

All buyers should ask themselves, “Can Iafford to buy this house?” No matter how care-fully a family may budget its income andexpenditures there are limits on how muchhousing debt a family can afford. Otherexpenses, such as food, medical and automobileinsurance, etc., must also be paid. One rule ofthumb (but not the only one) is to limit month-ly housing expense to one week’s take-homepay. Housing expense includes the mortgagepayments (principal and interest), plus fire orhomeowner’s insurance premiums and proper-ty taxes and assessments.

For example, suppose the monthly paymenton a proposed mortgage is $600, the homeown-er’s insurance costs are $192 per year or $16per month, and the property taxes are $720 peryear or $60 per month. Adding these coststogether, the total monthly housing expensewould be $676 ($600+$16+$60). To handlethis expense comfortably, the buyer shouldearn at least $676 per week.

Borrowed money may be obtained from var-ious types of financial institutions, includingsavings and loan companies, banks, mortgagebankers and mortgage brokers. Many of thelarger insurance companies, which must keep

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their funds invested in a high percentage offirst mortgages, have mortgage departmentsand many acquire their mortgages throughmortgage bankers and brokers. The federalgovernment insures some kinds of mortgagesthrough agencies such as the Federal HousingAdministration (FHA) or the VeteransAdministration (VA).

Other mortgages are called conventionalmortgages. Usually, a purchase on an FHA orVA mortgage will require a smaller down pay-ment than purchase on a conventional mort-gage, although the total purchase price in anFHA or VA transaction may be higher becauseof the increased risk involved in a high-ratioloan (a loan where the amount of the loan ishigh in relation to the value of the property).

Sometimes, when mortgage money is espe-cially hard to find or interest rates are veryhigh, a seller may sell a home on the conditionthat the buyer assumes and agrees to pay theseller’s existing mortgage. This arrangement iscalled a mortgage assumption. The buyer whoassumes a mortgage takes over the seller’smortgage and the interest rate of that mortgage.If the mortgage’s interest rate is lower than thecurrent market rate, it would be an advantageto the buyer, although the loan assumptionmay require a higher down payment than aconventional loan.

It’s important to note that, for a mortgageassumption to be legal, the seller’s mortgagemust allow assumption. Many mortgages donot allow assumption. Also, the seller generallyremains liable on an assumed mortgage, so theseller must choose a buyer who can and willkeep the payments current. A seller also canaccept a mortgage from the buyer, meaning theseller, rather than a bank or other financialinstitution, becomes the lender. This usuallyoccurs only where the buyer cannot qualify fora loan from a bank or other commercial lender.However, it is more common for a seller to sell

the property on an installment land contractbecause, under this kind of a contract, the sellerdoes not have to give the buyer title to theproperty until the full purchase price is paid.

Title Examination and Evidence of Title

If a home purchase is to be financedthrough a bank or other financial institution,the lender will require a title examination. Ifthe lender does not require it, or if there is noinstitutional lender, the buyer should contactan attorney to have the title examined. Theseller’s promise to furnish a good title is not aguarantee that the seller actually can, or will,furnish such a title.

In some parts of the state, the buyer isresponsible for protecting himself or herself bysecuring the title examination.

In some areas, purchase contracts requirethat evidence of title be furnished by the sellerin one of three ways. One way is to have anattorney give a certificate stating the title isgood. The certificate may often list a series ofexceptions—issues or areas the lawyer has notresearched or cannot research. Another way isto obtain an abstract of title, which is a chrono-logical summary of all transactions concerningthe property found in the public records.

The third and most common method is topurchase title insurance. Title insurance pro-vides protection against claims arising fromtitle problems that may not be uncovered by atitle search. If the buyer only pays for a titleinsurance policy on the loan then the title com-pany would only pay the mortgagee (lender) ifthe title to the property is successfully chal-lenged in court. By paying an additional premi-um, the buyer can get an owner’s title insur-ance policy that will pay the buyer if there is atitle defect that the title insurance company didnot discover.

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Environmental ConcernsIdentifying certain potential environmental

risks or concerns before purchasing propertycan alleviate future stress and expense. Home-buyers may be concerned about lead-basedpaints, asbestos, radon gas and gases emanat-ing from fuel storage tanks, or the home’swater supply and septic system, for example. Aproperty inspection can reveal environmentalconcerns. Some of these matters may be regulatedby either the federal Environmental ProtectionAgency (EPA) or the Ohio EnvironmentalProtection Agency (OEPA) or both.

The EPA is the federal agency charged withimplementing the environmental laws passedby Congress. The OEPA was created in 1972 toimplement Ohio laws and regulations regardingair and water quality standards; solid, haz-ardous and infectious waste disposal standards;water quality planning, supervision of sewagetreatment and public drinking water supplies;and cleanup of unregulated hazardous waste sites.

ClosingA contract of sale is closed when:

• a title has been examined and all necessary documents are signed;

• closing costs and the purchase price are paid (either entirely by the buyer, or partially viathe mortgage lender);

• the property is transferred to the buyer by the seller’s delivery of the deed; and

• the seller’s mortgage and any other liens are paid from the purchase price, to clear thebuyer’s title.This process is called a closing. There are

two kinds of closings: round table and escrow. Around table closing is an actual meeting wherethe buyer, seller, lender and their representa-tives meet, make payments and adjustmentsand actually sign and exchange the variousdocuments. The deed is recorded shortly aftera round table closing. An escrow closing is notan actual meeting. All the necessary documents,

payments and adjustments are delivered to aneutral third party, and on the scheduled day,the escrow agent delivers the deed and money,with neither buyer nor seller present. The pur-pose of both types of closings is similar, althoughwhich one is used depends on local custom andthe needs of the individual transaction.

During a closing, the balance of the pur-chase price is paid and the deed signed andgiven to the buyer. Various deductions andadjustments are made in the amount paid tothe seller. The buyer and seller each receive aclosing statement, which is prepared prior toclosing so that the transaction can be complet-ed. The statement lists the purchase price ofthe property and all adjustments to that price.

The statement includes specific entries for the:• buyer’s down payment (or “earnest money”

deposits);• amount of cash, if any, that is to be paid to

the seller;• pay-off price of the seller’s existing mortgage;• transfer tax the seller is required to pay to

the county;• cost of the title examination and the cost of

the title insurance policy;• pro-ration of real estate taxes between the

buyer and seller;• cost of document preparation and recording

(the seller is usually required to pay for therelease of the existing mortgage and for thepreparation and recording of the documentsnecessary to cure defects in title);

• cost of the insurance and tax escrows that lender may require of the buyer; and

• real estate commission (the seller is usually responsible for the commission). As stated above, the buyer also executes

(signs) the promissory note and mortgage tothe lender. The buyer should make certain thatall of the contract’s terms are completed beforesigning the mortgage. The contract of salebecomes merged in the deed when the deed isaccepted and the parties may lose the right to

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enforce any unperformed contract obligations.Also, the buyer is theoretically entitled to pos-session of the property immediately upon clos-ing, but it is not uncommon for the contract toprovide for delayed possession (up to 30 to 60days after closing), which is usually one of thecontract provisions.

Landlord and Tenant

The first time many people encounteraspects of real property law is when they renttheir first apartment or house. Laws addressingreal property transactions as well as certainaspects of the rights, obligations and remediesof landlords and tenants can be found inChapter 5321 of the Ohio Revised Code.

What is a Rental Agreement?A rental agreement or lease is a written or

oral contract between a lessee (tenant) and les-sor (landlord). A properly written agreementwill eliminate most of the misunderstandingsand problems that commonly arise between alandlord and a tenant.

A rental agreement benefits and protectsboth parties and is an efficient way of handlinga business transaction. A written agreementmay create a tenancy from week to week,month to month, or year to year. To protect thelandlord and the tenant, it is wise to specifythe exact manner in which the rental agree-ment may be terminated. If there is no writtenlease or rental agreement, the landlord or thetenant may end a week-to-week tenancy bygiving the other party at least seven days noticeprior to termination. Either party may end amonth-to-month oral tenancy by giving theother party at least 30 days’ notice before theend of the current monthly term.

A landlord may not use a contract clause tolimit or escape certain types of responsibility

that are mandated by law. If such a clause isincluded in a signed rental agreement, it can-not legally be used against the tenant.

Ordinarily, the landlord prepares a rentalagreement. For this reason, any doubtful orambiguous terms are decided against the land-lord and in favor of the tenant, if a disputearises and ends up in court.

Under Ohio law, both tenants and landlordsmay recover damages and reasonable attorneys’fees, in some situations, for certain unlawfulacts of the other party.

Obligations of the LandlordA landlord must keep the rented or leased

property (premises) decently habitable andmay not unreasonably interfere with the ten-ant’s privacy.

The landlord must ensure that commonareas (parking lots, stairs, halls, sidewalks, etc.)are clean and safe, and that the structure com-plies with building and housing codes.Specifically, electrical, plumbing, heating andventilating equipment must be maintained.The landlord also must provide water and heat,unless these utilities are under the tenant’scontrol. If the building contains four or moredwelling units, the landlord must provide trashcontainers and trash removal. The landlordcannot insist on having unreasonable access tothe rental premises and must give reasonableadvance notice of the intention to enter the ten-ant’s suite, apartment or area. Finally, the landlordmay not attempt to evict a tenant without a courtorder by changing the lock, terminating utilityservice or removing the tenant’s belongings.

Obligations of the TenantTenants have a variety of obligations

beyond paying rent or lease payments on time.Specifically, a tenant must:• keep the premises clean and safe;• properly dispose of trash;

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• keep plumbing fixtures as clean as their condition permits;

• properly use electrical and plumbing equipment;

• maintain appliances furnished as part of the lease;

• cause no disturbance and forbid family, friends and guests to disturb other tenants;

• see that controlled substances (such as drugs) are not illegally used on the property;

• comply with housing, health and safety codes; and

• allow the landlord reasonable access to the premises (upon 24 hours’ notice) to inspect,make repairs, deliver large parcels, or showthe property to prospective buyers or tenants.The tenant cannot change any of these legal

duties. However, the landlord may agree toassume responsibility for fulfilling any ofthese tenant duties.

Security DepositsA landlord often will require a new tenant

to post a security deposit (commonly equal toone month’s rent). The purpose of the depositis to cover any damage to the rental propertycaused by the tenant, and, in some instances,unpaid rent. If the deposit is more than $50, orone month’s rent (whichever is greater), andthe tenant is in possession of the property forsix months or more, the landlord must creditthe deposit with five percent interest. Within30 days after a tenancy ends, the landlord mustitemize every deduction from the securitydeposit and give the tenant a copy. Where thetenant has furnished the landlord with a for-warding address, the landlord must refund thedeposit plus interest and minus any validdeductions. If the landlord fails to provide arefund and/or explanation of any deductions,it could cost the landlord double the amountdue, plus reasonable attorney fees should thetenant pursue legal action.

Rent WithholdingA tenant living in a building with four or

more dwelling units may place the rent inescrow, if the tenant reasonably believes thelandlord has failed to live up to his or her obli-gations, or if the landlord is found to be in vio-lation of any law or regulation affecting healthor safety. However, if the tenant does not dothis properly, the tenant may face eviction fornon-payment. To withhold rent properly, thetenant must be current in rent payments andgive the landlord 30 days’ notice of the healthor safety problem. The 30-day period gives thelandlord an opportunity to remedy the prob-lem. If the problem is not fixed, the tenant maydeposit the rent payment by the due date withthe clerk of the local municipal or county courtinstead of paying it to the landlord. At thedirection of the court, the withheld rent maybe applied to correct the problem, or the courtmay order the monthly rent reduced until theproblem is remedied.

Retaliatory EvictionA landlord cannot raise the rent, withhold

services, or attempt to evict a tenant when atenant rightfully withholds rent. Acts of thelandlord are not considered retaliatory if:• the tenant created the problem that is the

basis for withholding rent payments;• the tenant owes back rent;• the tenant has failed to leave at the end of

the rental term; • correction of the problem would require

demolition or remodeling of such major pro-portions that the tenant would lose the use ofthe premises; or

• the rent increase is to cover improvements or increased costs.If a landlord takes retaliatory action, the

tenant can recover possession of the premises(if evicted), terminate the rental agreement, oruse the retaliatory action as a legal defense

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when protesting an eviction. The tenant also mayrecover damages and reasonable attorney fees.

EvictionThe technical name for an eviction action

in Ohio is forcible entry and detainer. Evictionactions allow landlords to recover rented orleased premises, provided their tenants’ rightsare not violated.

Before bringing an eviction action, the land-lord must give the tenant at least three days’written notice to leave in a specified form. Thenotice must include a recommendation that thetenant seek legal advice.

After the eviction suit is filed, the summonsissued by the court to the tenant must statethat the tenant:• cannot be evicted unless the tenant’s right to

possession has terminated (a tenant’s right toremain on the premises is terminated when,for example, the term of the lease or agree-ment is over, or the tenant has breached theagreement);

• cannot be evicted in retaliation for an assertion of rights covered by the law;

• should continue depositing rent with the court if already doing so;

• has a right to jury trial in the eviction action; and

• has a right to legal assistance. In an eviction case, the court determines

who has the right to possession of the rentedor leased property. It may also determine allrights and liabilities of the landlord and thetenant. For example, the court may order anappropriate governmental agency to inspect theproperty and report if any condition of theproperty violates the law. If such a conditionexists and was caused or was allowed to occurby the tenant, the court may order the tenantto pay the landlord the reasonable cost ofrepairing the condition. Where the tenant didnot cause such a condition and the court

decides the tenant should have possession, thecourt may order the landlord to correct thecondition. If the tenant did not cause such acondition and the court decides that the tenantshould not have possession, the court may for-bid the landlord from renting the propertyuntil the condition is corrected.

Other Real Property Issues

ZoningZoning is the process by which political sub-

divisions (cities, villages, townships and coun-ties) regulate land use. These political subdivi-sions are further divided into districts or zones.Subdivision officials enact regulations to con-trol the types of buildings and uses within eachof these districts. The primary purpose for zon-ing is to facilitate planning and land develop-ment on a community-wide basis. Zoning legis-lation may regulate uses of land. It may alsoregulate such things as the size of lots andbuildings, minimum front, back and side yardrequirements, or the minimum number ofparking spaces required for certain types ofbuildings, depending on the use.

Planning Commissions, appointed by thelocal legislatures of the political subdivisions,review land use within the community andpropose a comprehensive land use plan. Thisplan serves as a guide for dividing the politicalsubdivision into districts or zones. The mostcommon types of districts are residential, com-mercial and industrial. These districts may befurther divided. For example, a residential districtmay be restricted for only single-family homes, oran area may allow multi-family buildings.

A comprehensive plan may be adopted onlyif the proposed zoning regulations are reason-able. The local legislature, whether a city or

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village council, board of township trustees orboard of county commissioners, is responsiblefor enacting the plan and the zoning regula-tions that define each zone. Because compre-hensive plans and zoning regulations provide ablueprint for future growth and development,they should be periodically updated to reflectchanges in the community.

Violation of a zoning regulation (for exam-ple, establishing a commercial business in anarea zoned for residential use only) is a civilrather than a criminal matter. Zoning inspectorsmay issue orders to stop a violation of the zoningregulation. That might be followed by a courtaction resulting in a penalty, which might contin-ue as long as the violation remains uncorrected.

Because properties have different sizes,shapes and topographies, applying a zoningregulation to a specific property may be unrea-sonable for either the property owner or thecity or both. For example, a residential lot inthe inner city might not be large enough, undercurrent zoning regulations, for a house to bebuilt. Such a problem may be resolved by thegranting of a variance, or a “special case”change in zoning regulations. A board of zon-ing appeals, appointed by the legislative body,hears and acts upon requests for variancesfrom the zoning regulations. If a board agreesthat applying a zoning regulation to a specificproperty is unreasonable, it will grant a vari-ance. Generally, a board of zoning appeals willtry to grant the minimum variance necessaryto resolve the conflict.

The two types of variances are an area vari-ance and a use variance. An area variance maypermit a property owner to develop a propertywith narrower yard setbacks, smaller lot size,larger building size, or fewer parking spacesthan those otherwise permitted in the zoningdistrict where the property is located. A usevariance may allow a property to be used in away that is not permitted in a specific district

(for example, a home-operated beauty parloroperating in a residential district). Use vari-ances tend to be more difficult to obtainbecause they are often perceived as property re-zoning. In order to grant either type of variance,the board of zoning appeals must apply standardsthat are incorporated into the zoning regulations.

Planned Unit DevelopmentA planned unit development (or PUD) is a

technique to provide flexibility for new con-struction in a community. Instead of rigidlydividing land into exclusively residential, com-mercial and industrial zones, PUDs mix theseand other uses. Planners generally agree that amix of residential and commercial developmentalong with public spaces such as parks can pro-vide a very appealing environment.

PUDs are often part of a zoning code. Ifthey are not, many communities allow them byvariance or with a conditional use permit.However, courts can view PUDs as re-zonings,so local government officials are careful aboutusing the variance or conditional use proce-dure to allow PUDs to be implemented. It isbetter for local governments to enact zoningprovisions if they want to allow for PUDs, sothat standards are uniform throughout thecommunity.

Some common characteristics of a PUD include:• a large plot of land that is developed under

unified control and planned and developed asa whole;

• a mix of compatible uses such as commercial, residential, governmental (e.g., schools) andpublic spaces, or mixed single-family andmultiple-family units;

• comprehensive plans for developing the particular piece of land from the utilities tothe aesthetics and relationship of the build-ings to one another. This can be as detailedas predetermined site-plans, floor plans, andbuilding elevations;

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• a program for the occupants of the district to maintain the common areas and facilities; and

• restrictive agreements to prevent incompatible changes to the structures andappearance of the development.The PUD’s mixed uses can provide for a

more dynamic, vibrant community as well asmore green space and public areas. Green spaceis often gained by clustering residential areasto achieve open space and preserve natural fea-tures of the land. Most PUDs require adher-ence to a unified exterior appearance—such asthe same color scheme and roofs on all units.

The process for getting a PUD approved isusually very complicated and extensive. Theapproval process is likely to include a detailedreview of the site plan by a local government’splanning staff, planning commission, zoningboard and often the local legislative body aswell as input from the public. In some commu-nities, public input may include a ballot vote toapprove or disapprove the development inquestion. Additionally, some sites are large andmust be developed in phases. Thus, theapproval process can be ongoing.

Opponents may object to the cluster homeconcept that is an integral part of many PUDs.Developers can counter such negative reactionsby creating high-quality, aesthetically pleasingplans and by communicating and cooperatingwith local government officials and the public.Developers often bargain with local govern-ments exchanging some benefit to the overallcommunity, such as the creation of a publicpark, in exchange for approval.

Covenants, Conditions andRestrictions

In addition to government land use restric-tions, private party agreements and otherrestrictions also may control how owners usetheir property. For example, certain restrictionsin a private purchase contract may dictate howa home in a subdivision or a condominiummay be built, designed or used. These restric-tions are typically referred to as covenants, conditions and restrictions, or CC&Rs. CC&Rsset forth conditions on lot size, architecturaldesign, setbacks from the street, fence designor vehicle parking. If the terms of a privateparty agreement are violated, a suit may bebrought against the violator. The violator mayhave to pay money damages or may be orderedto remove the violation (such as a fence thatwas prohibited by the terms of the private partyagreement). The court injunction to remove theviolation also would prohibit future violations.

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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 thatgo 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 personwho 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) interests in property. • 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 theowner does this by means of a written agreement called a lease, the party to whom posses-sion 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. Three 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.

• Interest in land is granted through a deed. A leasehold estate is granted by means of a lease. 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 isthe 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. That other individual may be a beneficiarynamed 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 ownsthe remainder interest to a life estate, or because of a right of survivorship.

• 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 andkeeping possession continuously for 21 years, provided that the possession is obvious andopen, and that the landowner does nothing significant to assert his or her rights as owner.

Continued on page 114

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Property

From the OSBA:

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=155

“After Foreclosure: What You Should Know”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=174

“Do You Know A Condominium When You See One?”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=144 “Eminent Domain: What Every

Property Owner Should Know”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=69 “Homeowners’ Insurance Covers

Wide Range of Goods and Services”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=175 “How Does a Condominium Operate?”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=72“Joint Ownership of Property:

Common Sense Advice for Older Persons”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=191“New Property Deed Avoids Probate”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=130 “Property Owners Must Share Fence Costs”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=17 “Realtors May Act as Agents for Both

Buyers and Sellers”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=187 “Title Insurance Protects Owners

and Lenders”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=176 “What Makes a Condominium Work?”

Chapter Summary continued

• 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 thestate’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 ProtectionAgency (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. Anyproperty 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 review-ing 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 trans-action. A written agreement may create 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 buildingsand 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.

Web Links:

Continued on page 115

115

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=68 “What Should I Know Before I Buy a Home?”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=58 “What You Should Know Before Using

‘Free’ Gas”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=164 “When the Rains Come…What You

Should Know about Surface Water Laws”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=95 “Home-Buyers Should Determine

Environmental Risks”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=75 “Home-Buyers Should Determine

Asbestos Risks”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=111 “Home-Buyers Should Investigate

Water and Septic Systems”

http://www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=156 “Worried About Foreclosure? What You

Should Know”

From FindLaw. com:

http://www.findlaw.com/01topics/33property/index.html

From Hieros Gamos’s Web site (topic discernible from Web address):

http://www.hg.org/realest.html

http://www.hg.org/natres.html

http://www.hg.org/landlord.html

http://www.hg.org/landuse.html

http://www.hg.org/credit.html (Mortgage)

From Nolo.com:

http://www.nolo.com/encyclopedia/np_ency.html#Subtopic95 “Neighbors”

http://www.nolo.com/category/re_home.html “Real estate”

http://www.nolo.com/category/lt_home.html“Landlords and tenants”

http://www.nolo.com/keyword/houses-buying_home.html “Houses—Buying”

http://www.nolo.com/keyword/houses-selling_home.html“Houses—Selling”

http://www.nolo.com/keyword/leases_home.html “Leases”

From Cornell Law School Legal Information Institute (topic discernible from Web address):

http://www.law.cornell.edu/topics/real_property.html

http://www.law.cornell.edu/topics/real_estate.html

http://www.law.cornell.edu/topics/natural_resources.html

From “It’s Legal” Web site: (topic discernible from Web address):

http://www.itslegal.com/infonet/realestate/realmain.asp

http://www.itslegal.com/infonet/homeownership/realown.asp

Zoning

www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=173OSBA’s “Zoning Laws Aid Community Planning”

http://www.nolo.com/keyword/zoning_home.htmlNolo.com’s “Zoning”

Planned Unit Development

www.ohiobar.org/conres/lawyoucanuse/article.asp?ID=222OSBA’s “Planned Unit Developments Provide Flexibility for

New Construction”

Web Links continued