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Ohio Landlord/Tenant law – What to do when rental property is made uninhabitable through casualty?

Author By Finney Law FirmPosted on

Often the lease will provide the answer to this question, but in Ohio, absent a provision in the lease, R.C 5301.11 provides the default rule:

The lessee of a building which, without fault or neglect on his part, is destroyed or so injured as to be unfit for occupancy, is not liable to pay rent to the lessor or owner thereof, after such destruction or injury, unless otherwise expressly provided by written agreement or covenant. The lessee thereupon must surrender possession of such premises.

The first sentence of the statute provides that if the fire was not the fault of the lessee (tenant), the tenant is freed of her obligation to pay rent. However, the second sentence provides one condition, in order to be freed of her obligation to pay rent, the tenant must surrender possession of the premises.

Case law in Ohio on this point goes back to 1890, “[b]ut, to secure the benefit of the statute, the tenant must surrender or yield up all that remains of the premises embraced in the lease, without any purpose or intention of resuming possession thereof. The legislature has absolved the tenant from an onerous obligation, but the burden is removed only upon his compliance with the statutory condition.” Gay v. Davey, 47 Ohio St. 396, 402, 25 N.E. 425 (1890).

This makes perfect sense. The tenant is given the power to decide how to proceed, either maintain the lease while the necessary repairs are made and returning to the home, or unilaterally decide to terminate the lease – with the requirement that the tenant fully surrender possession of the premises (i.e. remove her belongings and with the understanding that she will not have a right to return after the repairs are made).

But the law does not allow the tenant to have it both ways. She cannot for example, stop paying rent but leave her personal property at the home, expecting to “restart” the lease once the repairs are made.

As noted above, R.C. 5311.01 is the default rule for both residential and commercial lease in Ohio, but the lease may provide a different provision. As always, read the lease.

Finney Law Firm can assist in drafting and enforcing your residential and commercial leases. Click here to contact us online or call (513) 943-6655 to speak with attorney Christopher P. Finney.

Ohio Landlord/Tenant law: Assistance animals

Author By Finney Law FirmPosted on

As a recent Wall Street Journal article pointed out, for any number of reasons, both legitimate and otherwise, we have seen a proliferation of service and assistance animals. From miniature horses as therapy animals to small dogs carried by airline passengers, to the more common seeing eye dog, Americans are ever more empowered to assert their entitlement to service and assistance animals.

Landlords are reporting questionable claims of disability that they suspect are aimed at getting around no pet clauses and pet deposits in leases. What is a landlord to do in the face of a suspicious claim of disability?

As part of the effort to protect people with disabilities from discrimination, the Fair Housing Act and the Americans with Disabilities Act limit a landlord’s ability to investigate requests for accommodations for service and assistance animals, but not all questions are foreclosed. This is a good thing and reflects our shared values because we want to encourage people with disabilities to get the necessary treatment and services; we want to open the opportunity for a full life to all. But we also don’t want people to make false claims of disability to obtain an improper benefit or unnecessary accommodation. To do so only serves to detract from those who truly suffer.

Recently a client called us needing help. The client owns a single family rental property and does not allow her tenants to keep animals. The tenant called in October about relaxing the no pets rule because he wanted to get his daughter a puppy for Christmas. The landlord declined. One week later, the tenant called again, this time to claim a need for an assistance animal and to request an accommodation.

The landlord had no prior knowledge of any disability and was obviously suspicious that this sudden need for an accommodation was simply a ruse to get around the no pets rule. She turned to us to determine what she should do. The landlord wanted to do the right thing, she wanted to comply with the law. But she also did not want to be taken advantage of.

After discussing the facts with the client and reviewing relevant statutory and case law, we sent a letter to the tenant explaining that the landlord had no prior knowledge that any member of the tenant’s family suffered from any disability, and asked for some documentation to establish (i) the existence of the disability and (ii) how the animal will provide a service or alleviate some symptom of the disability. We also asked for information about the specific animal they intended to bring into the home.

Not so surprisingly, the tenant never responded to our request for information, and no animal (service or otherwise) was brought into the home.

Note that landlords can be found in violation of the Fair Housing Act and Americans with Disabilities Act for even seemingly innocuous questions. If your tenant requests a disability related accommodation, you should consult an attorney about your specific facts and circumstances before making any investigation into the request for an accommodation. More information from the Department of Housing and Urban Development, Office of Fair Housing and Equal Opportunity can be found here.

If you have questions about your obligations under the Americans with Disabilities Act and the Fair Housing Act, use our secure contact page, or call Julie Gugino at 513-943-5669.

First American issues yet another wire fraud alert

Author By Christopher P. FinneyPosted on

First, we hear pretty regularly from Realtors, investors, and lenders of incredibly ingenious and devious wire fraud attempts.  And indeed some of these endeavors  succeed.  These are happening with greater and greater regularity in every community in the nation by fraudsters throughout the globe.

Second, we got this alert from our underwriter, First American Title Insurance Company today:

Fridays before holiday weekends represent an exponentially higher risk to fall victim to WIRE FRAUD.

Criminals know our business and have learned to take advantage of a busy agent’s desire to provide customer service and quickly move transactions to conclusion before the banks close for a long weekend.

NEVER ACCEPT WIRE INSTRUCTIONS VIA EMAIL without utilizing call-back verification procedures to a known, safe phone number. Don’t fall victim to wire fraud.

Enjoy a safe and secure holiday weekend.

So, to our clients and friends, we caution you to be safe out there!

 

Key links relating to SCOTUS case of Susan B. Anthony List v. Ohio Elections Comission

Author By Christopher P. FinneyPosted on

Relating to Christopher P. Finney’s presentation on February 16th, 2017 before Cincinnati’s Lawyers’ Club entitled “Mr. Finney goes to the United States Supreme Court,” we wanted to present several links for those wanting to do further study  on the topic.

First, as background, SCOTUSblog.com exists for the purpose, in part, of compiling and presenting key links for United States Supreme Court cases, from briefs, to oral argument transcripts and audio recordings, as well as in dept commentary.  So, most of our links are just back to their site, for which we are greatly appreciative.

Some are links to original documents on the Finney Law Firm scribd.com site.

And for some extra reading, a few Amicus Briefs from the SCOTUS case:

“Mr. Finney goes to the United States Supreme Court” presented at Cincinnati Lawyers Club Thursday, February 16th

Author By Christopher P. FinneyPosted on

Next Thursday, Christopher P. Finney will present to Cincinnati’s Lawyer’s Club the topic “Mr. Finney goes to the United States Supreme Court,” a speech on his experiences in having a case accepted by the nation’s highest court, having it presented (another attorney made the oral argument) and winning in a unanimous ruling.

“It has been the highlight of my legal career to date has been to position a case for acceptance by the United States Supreme Court, to have it presented and to win,” said Finney.  “The experience was made all the sweeter because up until the nine Justices spoke, not a single judge, at the trial court level or at the appellate level, saw any merit in our arguments.  Strategy, persistence and a firm belief in our position prevailed.”

Within just months of forming the Finney Law Firm in 2013, we learned that one of our cases had been accepted for oral argument at the United States Supreme Court — Susan B. Anthony List v. Ohio Elections Commission.  Getting a case accepted for oral argument by the United States Supreme Court is the legal equivalent of lightning striking.  The Supreme Court typically accepts fewer than 1% of all cases for which certiorari petitions are presented, and many of those arise from either very high profile issues of great public interest or cases of statutory interpretation arising from the D.C. Circuit.  In the year in which we presented, more than 10,000 petitions for writs of certiorari were presented, and only 69 were accepted for oral argument.

The Susan B. Anthony List case challenged Ohio’s political “false claims” statute, in which the Ohio Elections Commission sits (used to sit) in judgment of whether statements made during the course of political campaigns — candidate and issue — were “false” and if so, could refer them for criminal prosecution, involving up to six months in jail.

Our legal team presented that case in April of that year, and won a unanimous ruling from the U.S. Supreme Court in June, authored by Justice Clarence Thomas.  The case as it ascended to the United States Supreme Court was merely about whether our clients had standing to challenge the subject statute.  The Supreme Court decision found that standing existed and remanded the case for further proceedings in the trial and appellate courts, where some months later our clients ultimately prevailed.

Navigating legal shoals to have a case accepted by the United States Supreme Court and positioning it most strongly for victory, including by its written and oral presentation, involve intense strategy and hard work, much like a chess game or a championship boxing match.

That experience in this one case, and two more that the firm had accepted and won on only written briefs, will be presented by Christopher P. Finney next Thursday, February 16, 2017 before Cincinnati’s Lawyers’ Club at the Montgomery Inn Boathouse at 11:30 AM.

Also presenting that same day from 12:45 to 1:45 is Cincinnati attorney Daniel Drew on Civil Asset Forfeiture Reforms.

If you want to attend, you may sign up by contacting attorney Bob Cettel at (513) 325-2279 or via email at cettel@mac.com.  The cost is $20 per CLE session for Cincinnati Lawyer Club members and $25 per session for non-members.  The cost is $30 per year to join the Cincinnati Lawyers Club.

The Cincinnati Lawyers’ Club was founded in 1920 and gathers attorneys together for civic undertakings and continuing legal education programs.  We thank them for this opportunity to present our experiences on this exciting journey to the United States Supreme Court.

Please feel free to join us that day!

Ohio employment law: Age discrimination or wage discrimination?

Author By Stephen E. ImmPosted on
Attorney Stephen Imm

When an employer feels the need to cut costs, the first thing it often targets is wages and salaries, because that is often the biggest expense it has. To reduce wage costs it naturally will look at reducing the size of its workforce. And when it does that, it will often focus on the people with larger salaries. In this way the employer feels it can save the most money with the fewest number of terminations – get the most “bang for its buck” so to speak.

The problem is that the people with the biggest salaries are also often among the oldest employees. People who have been at a company the longest tend – due to their tenure, and the accumulation of annual salary increases – to be the most highly compensated.

So when a company engages in a reduction in force, and focuses on higher salaried employees for termination, older workers are often hit harder than younger employees. Is this illegal? Is this age discrimination?

Technically no. Targeting someone because of his or her salary – if that is the reason he or she was targeted – is not age discrimination, even though the EFFECT of this cost-conscious motivation is to hurt older workers more than younger workers

Age discrimination is an intentional act, not an accidental or negligent one. It occurs as a result of stereotypical, biased attitudes about older people – such as that they aren’t as energetic or creative, that they are slowing down, that they can’t adapt to change, etc. It is these attitudes that the age discrimination laws were designed to address.

Having said that, employers should always be concerned about applying any reduction in force in an evenhanded manner. Any reduction that disproportionately affects a particular demographic group is going to be subject to scrutiny by the courts, and create a greater risk of litigation.

Ohio license law: Judge Keith Spaeth: Client is vindicated in administrative appeal to restore her teaching license

Author By Christopher P. FinneyPosted on
Judge Keith M. Spaeth

The Ohio Department of Education has a remarkable record in teacher disciplinary proceedings over the past five years: Nearly 100% of all proceedings decided by the state board of education result in discipline for the teacher.  Yes, the standards for “due process” in ODE administrative proceedings are so robust that nearly no one is ever found “not guilty” of the charges leveled.

That fact alone should make the citizenry shiver, as no one involved in the proceedings seems to ever find a chink in the armor of the Department’s overzealous prosecutions.  It has the appearance, if not the reality, of a rubber-stamp procedure from beginning to end.

That one-sided history of adjudication of teacher disciplinary proceedings thus made our win this week in Langdon v. Ohio Department of Education all the more sweet.

In a proceeding that endured for more than 36 months, including seven days of trial, and taking six months after the close of the hearing for the Hearing Examiner to issue a decision, our client’s teaching license was revoked by the Ohio Board of Education.  She was a special education teacher in the troubled Lakota School District, dealing with developmentally-disabled, multi-handicapped children.  We then appealed that administrative decision on behalf of our client to the Butler County Common Pleas Court pursuant to O.R.C. §119.12.

Today, the decision in that appeal was issued, and our client was completely vindicated on all points, evidentiary and legal.

In that decision, the Honorable Judge Keith Spaeth from the Butler County Common Pleas Court found “an appalling lack of fairness and due process” throughout the seven-day proceeding to which our client, Michelle Langdon was subjected.  Among the due process violations were

  • failure to provide the client with the most basic notice of the alleged infractions,
  • a complete failure to ever define “conduct unbecoming” (the basic charge against her), and
  • a failure to name her accusers.

To the Ohio Department of Education, fundamental fairness and notice of the charges filed apparently are simply an unneeded inconvenience.

The case was filled with amazing parrys and thrusts to force bureaucratic conformity in the cozy Lakota School District bureaucracy.

  • For example, when a teacher’s aide was repeatedly late, absent and lazy on the job, our client hurt her feelings by saying “I just want you to do your job.”   As hard as it may be to believe, this fact pattern was one of the dozens of charges — in challenging the inertia of the educational bureaucracy — against which our client had to defend.
  • Our client also confronted an administrator in the Lakota Schools for her failure to properly equip the classroom with the furniture and equipment needed for a special needs population. Yes, advocating forcefully for special needs children is the basis for revoking of a teacher’s license according to the Ohio Department of Education.

The Court even cited in its opinion the Hearing Examiner’s strange rulings on procedural and due process issues and the lateness of his decision outside of the statutorily-permitted deadline.  Virtually everything about the administrative proceeding was unfortunate and Kafkaesque.  This Judge Spaeth clearly understood.

You may read Judge Spaeth’s brilliant decision here.  You may read the Finney Law Firm’s briefs before the Common Pleas Court here and here.

This case was a pleasure defending, and the client was a delight.

This is from Judge Sapeth’s decision about our client:

What the evidence and testimony from the administrative hearing does show is that Appellant was a dedicated, caring educator…She was an advocate for these children, and throughout her tenure at Lakota, Appellant went above and beyond the normal duties of a classroom teacher to ensure that her students had a genuine high school experience and resources to help them transition from the classroom to independent living.

We truly were thrilled to help “Make a Difference” for this client in this engagement.  The proceeding was important to her license and career, but the bigger principle of reining in an out-of-control state agency was even more important.  And here that principle  was vindicated.

We now look forward to the expeditious restoration of our client’s teaching licenses and an award of her attorneys fees for forcing her to endure this persecution, which state statute requires.

Ohio Supreme Court to hear oral argument in two sale and leaseback cases

Author By Finney Law FirmPosted on

The Ohio Supreme Court has ordered oral argument in two cases involving the valuation of real property sold as part of a sale and leaseback transaction. The cases, Terraza 8, LLC v. Franklin County Board of Revision, 2015-2063; and Board of Education of the Columbus City Schools v. Franklin County Board of Revision, 2015-2105 (State Farm) have been fully briefed (including an amicus brief filed by the Institute for Professionals in Taxation supporting the property owner).

As discussed here, Ohio’s legislature has amended the law to reflect the changes in commercial finance involved in sale and leaseback transactions. Simply put, a sale and leaseback involves the sale of commercial real estate at a higher than market value with the seller then leasing back that property at an above market rate lease commensurate with the sale price. The excess of the sale price is used to finance the purchase of the business who originally owned the real estate.

Consider this hypothetical: ABC Restaurant Co. is being purchased by XYZ private equity firm, XYZ arranges to sell ABC’s real estate to 123 Financing company for approximately three times its actual value and use the difference to purchase all of the shares of ABC Restaurant Co. stock, XYZ (now the sole shareholder of ABC) then enters into a 20 year lease for that same real estate back with 123 for an annual rent that is 7% of the sale price (with scheduled increases over the life of the lease).

The pricing of the real estate is based on the income the restaurant operations throws off, it has no relation to the actual value of the property as real estate. At the end of the lease, 123 Financing Co. still owns the real estate and has collected roughly 150% of its purchase price in lease payments.

Under the prior law, the county auditor would automatically adopt that inflated sale price as the “true value” and the property taxes on the restaurant would triple or more.

Under the new law, the auditor should disregard the sale price and determine the “true value” of the property “as if unencumbered” that is as if it was not subject to the non-market based lease. The result should be that the properties’ values remain roughly the same as they were before the sale and leaseback transaction.

Some County Auditors and Boards of Revision, and the Ohio Board of Tax Appeals itself, have thus far been unwilling to appreciate the magnitude of the change in the law and continue to value sale and leaseback properties using the old method. The Ohio Supreme Court has an opportunity to clarify the law for Ohio’s businesses and tax officials.

Oral argument will be held in the Terraza 8 case on April 5, 2017 and in the State Farm case on May 3, 2017. Finney Law Firm will continue to provide updates on these important cases.

Ohio real estate law: Attention Ohio residential rental property owners: Registration with County Auditor is required

Author By Christopher P. FinneyPosted on

You are an investor buying and renting residential real property.  And, yes, the Ohio legislature has decided that you do not have enough paperwork to handle already!

O.R.C. Chapter 5323, enacted ten years ago, requires registration of  residential real property with the County Auditor by its owner.

The rule applies only in urban counties, counties with more than 200,000 in population.  Presently, qualifying counties are: Butler,  Cuyahoga,  Franklin, Hamilton, Lake, Lorain, Lucas, Mahoning, Montgomery, Summit, Lorain, and Trumbull.

Once your property is registered, there is no need to re-file annually, and there is no fee for the filing.

For properties with co-owners, only one of them is required to file. The filing is required within 60 days following the day a real property conveyance form for that property is filed with the county auditor. The fine for failure to timely file the form is up to $150.00. against the property that is the subject of the violation.

The Hamilton County form, on which multiple properties can be listed at once, is linked here.

Ohio employment law: Non-Compete Agreements: Are they enforceable in Ohio?

Author By Stephen E. ImmPosted on

I receive a lot of inquiries from clients about the enforceability of non-compete agreements. For reasons that have never been clear to me, there seems to be a common belief that such agreements are “not worth the paper they are printed on.”

A non-compete agreement is a contract between an employer and one of its employees, stating that the employee will not work for a competing employer for a period of time – most commonly a year – after their employment with the contracting employer ends. These agreements often will also contain provisions against soliciting the employer’s customers (“non-solicitation”) and using the employer’s confidential information or trade secrets (“confidentiality”).

Historically, non-compete agreements were disfavored in the law as a restraint of trade. And some states – such as California – today have sharp restrictions against them.

In Ohio and many other states, however, non-compete agreements are alive and well, and are enforced in courts with regularity. Ohio has even held that a non-compete agreement may be enforceable when the employee doesn’t receive anything from the employer in exchange for signing it – what the law calls “consideration.” The Ohio Supreme Court has ruled that an employee’s continued employment alone can be sufficient consideration for an employee’s promise not to compete.

Many clients will point out that their former employer has not enforced non-compete agreements signed by other employees, and ask whether that doesn’t prevent the employer from trying to enforce one against them? The answer is “no.” Just because an employer chose not to bother enforcing a similar agreement against another employee does not prohibit it from enforcing it against you.

The law does recognize some defenses to non-compete agreements, and does impose certain limitations on them. Employers who want to protect their customers from former employees should seek competent legal counsel to draft enforceable agreements. And employees facing claims by former employers that they are in violation of such agreements should do the same.

Most importantly, employers and employees should get counsel about these agreements BEFORE the employee leaves the job. Employers: Make sure your agreements are enforceable BEFORE you present them to your key employees. Employees: Talk to a lawyer when you are PRESENTED with one of these agreements – don’t wait until after you’ve already signed it, or after you’ve left your current employer for a competitor.

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