Properties Magazine February 2017 : Page 71

Legal Services A Break in the Chain of Title: Curing Defective Titles New Ohio law significantly shortens time to cure defective titles – effective April 6, 2017 By Kathryn Carlisle-Kesling Buckley King A title defect may be cured by the passing of the requisite time period, without challenge. By applying Ohio’s curative statutes, some title defects may not be defects at all and may be easily eliminated. Regardless of the type of real property – residential, suburban retail, industrial or down-town mixed use – sellers, buyers and/or investors invariably never want to face a title issue, especially at the closing table. Title issues are generally never resolved quickly and are not always clearly under-stood (especially if a real estate attorney or title agent is not involved at the beginning of the deal). It doesn’t matter where the real property is located, when asked to consider a title issue or review an opinion of title, the stakes are high and time is of the essence. The first consideration is the title standard applied and agreed upon between the parties. The applicable title standard can be elusive to some practitioners because of choice words employed (most commonly in the sales contract) with differing meanings and risk. These words, whether carefully crafted or just another unfortunate case of a boilerplate purchase contract gone wrong, are also known as a “contract condition.” The title standard may also be dictated by the type of property being sold. For example, if subsurface interests or mineral interests are to be sold, the marketability study period will generally be longer, in part because of a higher potential for adverse claims and profit. Therefore, a higher degree of title marketability may be negotiated. If title insurance is obtained, the parties may not even consider the standard of title (although this is short-sighted for the buyer as owner’s title insurance policies contain exclusions and exceptions from coverage). If there is not coverage or it is being contested, the buyer could hold the seller responsible under the general warranties and title granted. A quick drilldown of the exact words used in the sales contract will usually reveal one of the following: • Seller shall convey title to the Property to Buyer…; or • No title standard expressed at all. Bear in mind the Ohio Marketable Title Act. The standard may be for an absolute or perfect title/conveyance or some lesser standard. The buyer may not demand a perfect title but, customarily, may ask for a “Marketable Record Title.” Defined in R.C. 5301.50, “Marketable Record Title” means that the record title of the property operates to extinguish such interests and claims existing prior to the effective date of the root of title as stated in R.C. 5301.50: Any person having the legal capac-ity to own land in this state, who has an unbroken chain of title of record to any interest in land for forty years or more, has a market-able record title to such interest as defined in section 5301.47 of the Revised Code, subject to the mat-Kathryn Carlisle-Kesling • Seller shall convey marketable record title to the Property to Buyer, free and clear of all liens and charges and encumbrances, except for …; • Seller shall convey marketable title to the Property to Buyer…; • Seller shall convey good, marketable, insurable and clear fee simple title to the Property to Buyer…; STRUCTURAL STEEL FABRICATORS & ERECTORS SINCE 1958 0DVRQ6WHHO Contact Mike Smith for a Proposal: (440) 439-1040 | (800) 686-1223 7500 Northfield Rd. | Walton Hills, OH 44146 www.masonsteel.com Other Fine Products Available: Stone | Pavers | Fireplaces | Windows | Doors www.propertiesmag.com 71

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