OSBA LEGISLATION NEWS
November 16, 2007
OSBA Real Property Legislation Signed by Governor Strickland
Senate Bill 134, which would eliminate the requirement that real estate memoranda of trust be executed and acknowledged by the settler of the trust, was signed by Governor Strickland on October 18, 2007, and will become effective on January 17, 2008. The bill was sponsored by Representative Keith Faber of Celina. Steve Buchenroth of Columbus was the OSBA “point person” on the bill.
Section 5301.255 of the Revised Code establishes a procedure by which constructive notice of the existence of trusts may be provided in the real estate records of the Recorder’s Office without the need for filing the entire trust instrument. Instead, a memorandum providing certain specified information with respect to the existence of the trust is filed.
While there is no requirement that a memorandum of trust be filed, most real estate lawyers and title examiners believe that it is the best practice to do so, and the intent of the statute was to encourage the use of memoranda of trusts. However, in practice, the statute has not been used to the extent intended due to the requirement that the memorandum of trust disclose the name of and be signed by the settler (the person creating the trust) in addition to the trustee. This requirement, which adds no important information regarding the trust from a real estate title standpoint, provides a significant disincentive to the use of a memorandum of trust.
The requirement relative to the settler was a disincentive in two respects. First, many people create trusts to hold property for the very purpose of shielding their ownership interest in real estate in the public records. Second, if the settler is deceased, the settler is no longer around to execute any amendments to the memorandum of trust, such as when a new trustee is appointed after the death of the settler, and thus it is impossible to do so, which makes the Recorder’s records incorrect.
The purpose of Senate Bill 134 is to remove this disincentive by deleting the requirements that the name of the settler be disclosed in the memorandum of trust and that the settler sign the memorandum of trust. This change will have no negative impact because the name of the settler is not important information for the purpose of the memorandum of trust, and the title to real estate owned through a trust is actually titled in the name of the trustee, which is disclosed.
OSBA LEGISLATION SCORECARD
127th General Assembly
2007 - 2008
H.B. 134 – Corporation law Signed by the Governor on July 19; portions
effective October 18, 2007; portions effective January 1, 2008
S.B. 134 – Real Property - memoranda of trust Signed by the Governor October 18, 2007; effective January 17, 2008
in real property
H.B. 178 – Family Law - child support/ Effectively enacted as part of the biennial budget bill, House Bill 119; effective July 1, 2007
health insurance
H.B. 160 – Probate Law - Ohio disclaimer law Passed the House; pending in the Senate Judiciary – Civil Justice Committee
H.B. 332 – Revised Uniform Partnership Act Introduced on October 2, 2007; reported by the House Civil and Commercial Law Committee on November
8; awaiting a House floor vote
H.B. 258 – Insurance Law - financial responsibility Pending in the House Insurance Committee
S.B. 157 – Probate Law - guardianship; adult Passed the Senate; pending in the House Judiciary Committee
incompetent child
H.B. 374 – Corporation law Introduced November 1, 2007; pending in the House Civil and Commercial Law Committee
OSBA LEGISLATION INVENTORYBills the OSBA is Following
HB3 / ESTATE TAXES (LATTA, R)To eliminate the state portion of the estate tax. The new bill would gradually raise the practical threshold of liability to apply to estates of more than $600,000 by 2010.
Current Status: / 4/25/2007 - House Ways and Means, (Sixth Hearing)
HB4 / LOCAL GOVERNMENTS (WOLPERT, L)Gives the state's portion of the estate tax to local municipalities, and allows local governments to opt out of the estate tax.
Current Status: / 4/25/2007 - House Ways and Means, (Sixth Hearing)
HB5 / EMINENT DOMAIN (GIBBS, B)Implements recommendations made by the Eminent Domain Task Force,
Current Status: / 6/19/2007 - Referred to State and Local Government and Veterans Affairs Committee
HB7 / ADOPTION (BRINKMAN, T)To reduce the barriers to adoption in Ohio including complications and red tape in the legal system and exorbitant costs.
Current Status: / 2/20/2007 - Referred to Health Committee
HB10 / JUROR COMPENSATION (WOLPERT, L)Provide that a board of county commissioners may fix the compensation of jurors in the court in an amount that differs from the compensation of jurors in the court of common pleas.
Current Status: / 4/19/2007 - House Judiciary, (Second Hearing)
HB46 / CONSUMER'S CREDIT REPORT (STEWART, J)To require a consumer reporting agency to place a security freeze on a consumer's credit report in response to a consumer's request.
Current Status: / 5/23/2007 - Referred to Judiciary - Civil Justice Committee
HB89 / CHARITABLE DONATIONS (COLEY, W)To provide persons who donate consumer goods to a charitable agency with qualified immunity from civil liability for harm that allegedly arises because the consumer goods are not fit for use and to establish a qualified immunity from civil liability for certain charitable agencies that distribute perishable food or consumer goods free of charge to individuals in need.
Current Status: / 7/19/2007 - SIGNED BY GOVERNOR; Eff. 10/18/07
HB119 / BIENNIAL BUDGET (DOLAN, M)To make operating appropriations for the biennium beginning July 1, 2007 and ending June 30, 2009, and to provide authorization and conditions for the operation of state programs.
Current Status: / 6/30/2007 - 6/30/2007 - SIGNED BY GOVERNOR, appropriations eff. 6/30/2007-some sections different dates
HB134 / CORPORATION LAW (SEITZ, B)To modify corporation law relating to the election of directors and to conform conversion provisions of Chapter 1701. of the Revised Code with parallel provisions in Chapters 1705., 1775., and 1782. of the Revised Code.
Current Status: / 7/19/2007 - SIGNED BY GOVERNOR; Some sections eff. 1/1/08; others 10/18/07
HB138 / JUDICIAL SALE-PROPERTY (FOLEY, M)To require purchasers of real property at a judicial sale to provide certain identifying information and to make other changes in judicial sales of real property.
Current Status: / 6/13/2007 - REPORTED OUT AS AMENDED
HB154 / MAYOR'S COURTS (WOLPERT, L)To abolish mayor's courts and to create community courts and to modify the compensation of municipal court judges in territories having a population of more than 50,000.
Current Status: / 11/7/2007 - House Judiciary, (Fourth Hearing)
HB160 / OHIO TRUST CODE (BUBP, D)To clarify and modify the law relating to disclaimers under the Ohio Trust Code.
Current Status: / 10/30/2007 - Senate Judiciary - Civil Justice, (Second Hearing)
HB173 / JUDGES (SEITZ, B)To increase the compensation of justices and judges of the courts, to change the qualifications of all judges, to require the Supreme Court to establish a qualification program for candidates for judicial office, to create the Judicial Allotment Review Commission to study and review the allotment of judgeships in the courts for the purpose of recommending legislation to ensure the efficient and prompt administration of justice in Ohio, to create the Judicial Appointment Review Commission to make recommendations of persons to fill judicial vacancies, to specify that a portion of certain court costs currently deposited to the credit of the Reparations Fund be deposited in the fund for court security, and to make appropriations for court-related purposes.
Current Status: / 10/3/2007 - 10/3/2007 - House Judiciary, (Sixth Hearing)
HB178 / HEALTH INSURANCE/CHILD SUPPORT (BLESSING, L)To define the reasonable cost of health insurance coverage in child support orders.
Current Status: / 5/9/2007 - House Juvenile and Family Law, (First Hearing)
HB219 / TESTIMONIAL PRIVILEGE (PATTON, T)To create a testimonial privilege for communications between a representative of an employee organization and a bargaining unit member.
Current Status: / 6/26/2007 - 6/26/2007 - House Commerce and Labor, (First Hearing)
HB222 / LAND SALE PUBLIC NOTICES (ZEHRINGER, J)To permit instead of require that public notices and advertisements of the sale of lands and tenements taken in execution contain a description of the lands and tenements and to permit those advertisements to be made on the sheriff's web site.
Current Status: / 5/31/2007 - 5/31/2007 - House Local and Municipal Government and Urban Revitalization, (First Hearing)
HB232 / COOPERATIVE BUSINESS ENTITY (REINHARD, S)To authorize the establishment of a new form of cooperative business entity in this state.
Current Status: / 9/19/2007 - 9/19/2007 - House Civil and Commercial Law, (Second Hearing)
HB248 / CIVIL LITIGATION (BLESSING, L)To set forth requirements governing non-recourse civil litigation advance contracts.
Current Status: / 9/19/2007 - 9/19/2007 - House Civil and Commercial Law, (Second Hearing)
HB255 / PROBATE/GUARDIANSHIP REQUIREMENTS (LATTA, R)To allow appointment of a nonprofit corporation or public agency as guardian of a person, allow an executor or administrator to accept the county auditor's valuation of real estate, provide that the testimonial privilege between a physician or dentist and a patient does not apply in certain guardianship, adult protective services, commitment, or institutionalization proceedings, eliminate the requirement that a probate court act as a board of education, or governing board of an educational service center that fails to perform its duties, and require a probate court to promptly fill a school board vacancy not filled within 30 days.
Current Status: / 6/25/2007 - 6/25/2007 - House Judiciary, (Third Hearing)
HB255 / PROBATE/GUARDIANSHIP REQUIREMENTS (LATTA, R)To allow appointment of a nonprofit corporation or public agency as guardian of a person, allow an executor or administrator to accept the county auditor's valuation of real estate, provide that the testimonial privilege between a physician or dentist and a patient does not apply in certain guardianship, adult protective services, commitment, or institutionalization proceedings, eliminate the requirement that a probate court act as a board of education, or governing board of an educational service center that fails to perform its duties, and require a probate court to promptly fill a school board vacancy not filled within 30 days.
Current Status: / 6/25/2007 - 6/25/2007 - House Judiciary, (Third Hearing)
HB258 / FINANCIAL RESPONSIBILITY PROOF (STEBELTON, G)To increase the minimum amounts required for valid proof of financial responsibility.
Current Status: / 10/30/2007 - House Insurance, (Fourth Hearing)
HB278 / MOTORCYCLE SEIZURE (LETSON, T)To modify the guidelines governing seizure of a motorcycle by a law enforcement officer when the identity of the motorcycle cannot be determined and to establish limited civil liability if the law enforcement officer or agency fails to comply with specified guidelines.
Current Status: / 9/10/2007 - Referred to Civil and Commercial Law Committee
HB332 / REVISED UNIFORM PARTNERSHIP ACT (WAGONER, M)To adopt the Uniform Partnership Act to be known as the "Ohio Uniform Partnership Act (1997)," to establish that on and after January 1, 2009, the act governs new partnerships and partnerships that elect to be governed by the act, to establish that effective January 1, 2010, the act governs all partnerships in Ohio, and to establish that effective January 1, 2010, the existing Ohio Partnership Law no longer governs partnerships.
Current Status: / 11/7/2007 - REPORTED OUT AS AMENDED
HB374 / CORPORATE DIRECTORS (COLEY, W)To allow the original articles of incorporation to eliminate cumulative voting in the election of directors, to remove restrictions for certain corporations regarding the elimination of cumulative voting and to exclude from the existing procedures for the sale of all or substantially all of the assets of a corporation the sale of those assets to the corporation's wholly owned subsidiaries.
Current Status: / 11/8/2007 - Referred to Civil and Commercial Law Committee
SB6 / CONSUMER'S CREDIT REPORT (NIEHAUS, T)To allow a consumer to place a security freeze on the consumer's credit report, to specify that Social Security numbers are confidential, to specify that certain personal information is not a public record, to require a public office to redact from a document that is otherwise a public record certain personal information.
Current Status: / 10/30/2007 - Referred to Financial Institutions, Real Estate and Securities Committee
SB7 / EMINENT DOMAIN (GRENDELL, T)To formally state the G.A.'s intentions in its upcoming deliberations on reforming Ohio's laws regulating the exercise of eminent domain.
Current Status: / 7/10/2007 - SIGNED BY GOVERNOR; Eff. 10/10/2007
SB21 / DOMESTIC VIOLENCE (COUGHLIN, K)To adopt the Uniform Interstate Enforcement of Domestic Violence Protection Orders Act.
Current Status: / 3/28/2007 - Senate Judiciary - Criminal Justice, (Third Hearing)
SB59 / MEDICAL NEGLIGENCE (COUGHLIN, K)Establish pilot program mandating arbitration for claims of medical negligence.
Current Status: / 11/14/2007 - Senate Insurance, Commerce and Labor, (Fourth Hearing)
SB100 / CRIMES AGAINST JUDGES (AUSTRIA, S)To increase the penalties for certain offenses when a judge or magistrate is the victim, to prohibit a person from threatening a judge or magistrate, and to make the killing of a judge or magistrate an
aggravating circumstance for the imposition of the death penalty for aggravated murder.
Current Status: / 3/13/2007 - Referred to Judiciary - Criminal Justice Committee
SB103 / PROPERTY TITLE (MUMPER, L)To require that a person have paid all taxes and special assessments due on property while in their possession in order to use that period of possession to establish title to the property through adverse possession.
Current Status: / 10/2/2007 - 10/2/2007 - Senate State and Local Government and Veterans Affairs, (Fourth Hearing)
SB134 / MEMORANDA OF TRUST (FABER, K)To provide that memoranda of trust be executed and acknowledged only by the trustee of the trust instead of both the settlor and trustee.
Current Status: / 10/18/2007 - SIGNED BY GOVERNOR; Eff. 1/17/2008
SB153 / ACCIDENT MINIMUM FINANCIAL LIMITS (SCHULER, R)To increase the minimum financial limits for bodily injury for one person injured in an accident, for all bodily injuries in one accident and for the property damage maximum in one accident.
Current Status: / 10/31/2007 - Senate Insurance, Commerce and Labor, (First Hearing)
SB157 / GUARDIANS (BUEHRER, S)To specifically authorize a person to designate a guardian for the person's incompetent adult child.