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Ohio: Cash-Strapped Counties Dig Deeper to Increase their Coffers

Posted By USFN, Tuesday, December 12, 2017
Updated: Tuesday, November 14, 2017

December 12, 2017

by Peter Mehler
Reimer Law Co. – USFN Member (Kentucky, Ohio)

In an effort to plug holes in their budgets, county auditors in Ohio have begun imposing fines on owners of residential properties who fail to register rental properties.

Residential rental properties are defined as properties located in counties with a population of more than 200,000, on which are located one or more dwelling units which are leased or otherwise rented to tenants. Ohio Revised Code §§ 5323.01, et seq. requires owners of these “residential rental properties” to register the property with the auditor of the county in which the property is located and provide basic information including the name, address, and telephone number of the owner. This information is then placed on the record by being filed with the tax duplicate. Registration is free and only required once. If information such as ownership changes, the new ownership entity or individual must provide their name and contact information to the auditor within 60 days of that change.

The law is not new; it was passed in 2006 as a way to root out blight and a diminution in property value to the surrounding communities caused by an inability to find and communicate with absentee landlords. It has been only in the past couple years, however, that some of the county auditors in Ohio have begun to enforce the law by imposing fines of between $50 and $150 for a failure to register rental properties. This has resulted in up to $3,000,000 a year in additional revenue to some of Ohio’s larger counties. The amount of the fine varies by county. Further, some of the counties that are not currently assessing fines are taking a hard look at doing so in the near future.

The effect on the servicing industry will be amplified by the significant number of assets many lenders have in their REO inventories. An additional factor will be that payment of taxes is often handled by third parties who may not be aware of the registration requirement, or may not get this information to the proper party to ensure compliance. Moreover, it is not always easy to find out how a property was used by a borrower or prior owner to determine whether registration is necessary. If fines are imposed against the property, these charges will be added to the tax bill and remain until paid in full.

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