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Effective April 6, changes to Ohio’s Good Funds Law will require that all funds coming into and out of a title company trust account be wired funds with just two exceptions: (i) funds of $1,000 or less can be by personal check or cashier’s check and (ii) funds coming in from a Realtor’s escrow account (usually the earned money) are also permitted by check.

This change is significant in that if a buyer (or seller) is not prepared to pay their monies into a closing via wire, the closing could be delayed or the buyer (or seller) in placed breach of the contract.  We have been informed that out-of-town banks with no Ohio presence may require the account holder to appear in person at their bank branch to initiate a wire, and thus a trip out of town can be necessitated if arrangements have not been made in advance.

These new rules appear to be a result of ramped-up, sophisticated and aggressive wire fraud problems associated with real estate closings, and the State of Ohio is working to assure good funds in accounts to send behind each closing.

Realtors, lenders, buyers and sellers are all advised to be aware of the new good funds requirements and to plan ahead to assure your closing is not interrupted.  For additional information regarding Good Funds, please contact Ivy Pointe Title at info@ivypointetitle.com.

Our firm sometimes receives inquiries about areas of the law that few even consider until they are facing a potential lawsuit. Recently, one of those inquiries was whether one can be responsible for his or her tree falling and harming another or their property.

Generally, land owners do not owe a duty with regard to harm caused to another as a result of some natural condition of the land, provided that the harm occurs outside of the land. Heckert. V. Patrick, 473 N.E.2d 1204, 1206 (Ohio 1984). However, there are some exceptions with regard to injuries resulting from falling trees and/or branches. Id. at 1207.

“[A]n owner of land abutting a highway may be held liable on negligence principles under certain circumstances for injuries or damages resulting from a tree or limb falling onto the highway from such property.” Id. For example, “a possessor of land in an urban area is subject to liability to persons using a public highway for physical harm arising from the condition of trees near the highway.” This duty of an urban landowner includes a duty to inspect the tree to make sure that it is safe. Id. This is because urban landowners are thought to have fewer trees – thus, it is not too great of a burden to do so. See id.

However, for rural landowners, who potentially own entire forests of trees, an affirmative duty to inspect the trees would likely amount to a very heavy burden. Id. Therefore, the Ohio Supreme Court has adopted a distinction between rural and urban landowners in this respect. Id. As such, rural landowners have no duty to inspect trees growing on their property adjacent to rural highways, or to ascertain defects that may result in injury to someone travelling on the highway, but, to the extent a rural landowner has “knowledge, actual or constructive, of a patently defective condition of a tree,” that landowner must exercise reasonable care to prevent harm. Id. Constructive knowledge can result from the appearance of the tree, thereby giving notice to an owner that the tree is not in good shape and could fall. In recognition that the distinction between rural and urban areas may not always be an easy one to make as suburbia continues to grow and expand, the Court also provided a list of factors to be considered when making such determination, including “the location of the highway, its size and type, as well as the number of people utilizing it.” Id. at 1208.

Courts have generally applied the law as it relates to rural landowners to cases involving trees falling onto neighbors’ property (i.e., the landowner will be liable to the neighbor where the landowner has actual or constructive knowledge that the tree is defective. See Johnston v. Filson, 2014-Ohio-4758 (12th Dist. 2014) (granting summary judgment to a landowner upon finding that the landowner did not have actual or constructive notice of the tree’s condition); Motorists Mut. Ins. Co. v. Flynn, 2013-Ohio-1501 (4th Dist. 2013) (finding that photographs of a tree significantly leaning toward the neighbor’s house presented a genuine issue of material fact as to whether a reasonable person should have known that the tree posed a danger); Wertz v. Cooper, 2006-Ohio-6844 (4th Dist. 2006) (granting summary judgment in favor of landowner for damage resulting from the landowner’s tree falling onto its neighbor’s property because the neighbor failed to establish that the landowner had either actual or constructive knowledge of a patent dangerous condition of the tree).

So while, in most cases, you will not have an affirmative duty to go out and inspect every single tree on your property, actual or constructive (visible) notice that the tree is not in good shape could create liability if that tree were to fall and cause harm. The lesson? Don’t ignore unhealthy or potentially problematic trees/limbs.

When purchasing a home, most buyers take advantage of the common “home inspection contingency,” affording them the opportunity to have the property professionally inspected in order to reveal potential defects before moving forward with the purchase. For their own protection, many home inspectors have begun including clauses limiting their liability to the price paid for the inspection in their contracts. In essence, this means that, if an inspector charges $500 for the inspection but misses a defect that costs the buyer/homeowner $2,000, the inspector is only liable (if at all) up to the $500 amount, not the full cost of remedying the defect. But are these clauses actually enforceable?

Ohio courts seem to say “Yes.” Home buyers have argued that the clauses are unconscionable (or unfair). However, courts have noted that the clauses appear on the face of the contract, that buyers are able to read the contract and ask questions before signing, and that buyers are permitted to decline the clause or the contract or hire another inspector altogether if they do not agree to the clause. See Barto v. Boardman Home Inspection, Inc., 2015-Ohio-5210, ¶19 (11th Dist. 2015).  Therefore, such clauses are generally not considered unconscionable, and courts have continued to enforce them.

In fact, clauses limiting the liability of inspectors have even been enforced where they effectively preclude enforcement of arbitration clauses contained within the same contract. In McDonough v. Thompson, the parties were required under their contract to resolve any disputes through arbitration. 2004-Ohio-6647, ¶¶2-3 (8th Dist. 2004).  However, because the filing fee for arbitration exceeded the inspector’s maximum liability under the contract (i.e., the price of the inspection), the court declined to enforce the arbitration clause, but did enforce the limitation of liability. See generally id. The court found that “an arbitration clause is not enforceable when the clause, in conjunction with a limitation of liability clause, effectively denies a claimant any redress.” Id. at ¶13. Thus, not only are these clauses enforceable, but they seem to be enforceable even to the preclusion of other clauses carrying a general presumption of enforceability (as arbitration clauses do).

In light of the courts’ eagerness to enforce limitation of liability clauses in this context, a buyer’s best remedy might actually be against the seller of the home (to the extent the seller may have concealed or lied about the defect), and those cases can often be tenuous.

Read more here about home defects and residential property disclosure forms:

• Real estate 101: Ohio property defects claims
• Myth buster: When is a residential property disclosure form required
• Caveat emptor really means caveat emptor