Bulletin: OH000007

Dear Associates:

The Ohio legislature has granted the director of natural resources the authority, pursuant to Chapter 1506 of the Revised Code, to designate lands adjacent to Lake Erie as "Lake Erie Coastal Erosion Areas." These areas are land areas anticipated to be lost by Lake Erie related erosion within a thirty year period if no additional erosion control measures are completed within that time.

Any landowner whose land falls within such "coastal erosion area" will be so notified in writing by certified mail by the director of natural resources. The landowner shall have a right to object to the designation and be given the opportunity, pursuant to Section 1506.06 of the Revised Code, to appeal the designation made by the director of natural resources.

Pursuant to Section 1506.06 (F) of the Revised Code, any person who has received written notice under that section or section 5302.30 of the Revised Code that a parcel or any portion of a parcel of real property that the person owns has been included in a "Lake Erie Coastal Erosion Area" identified under this section shall not sell or transfer any interest in that real property unless that person first provides written notice to the purchaser or grantee that the real property is included in a "Lake Erie Coastal Erosion Area". The written notice shall be provided in accordance with section 5302.30 of the Revised Code entitled "Property Disclosure Form for Transfer of Residential Real Property."

Section 1506.09 (3) of the Revised Code sets forth that any person who violates any provision of Chapter 1506, or any rule or order adopted or issued under it, shall, in addition to any fine that may be assessed under section 1506.99 of the Revised Code, be assessed a civil penalty of not more than five thousand dollars ($5,000.00) for each offense.

The penalty set forth in section 1506.99 of the Revised Code for the violation of any provisions of this Chapter shall be a fine not less than one hundred ($100.00) nor more than five hundred dollars ($500.00) for each offense.

There are no penalties for failure to comply with any provisions of Chapter 1506 of the Revised Code that affect the title to real property transferred.

Pursuant to section 5302.30 of Revised Code, the "Property Disclosure Form for Transfer of Residential Real Property" section, the transfer of residential real property that is subject to that section shall not be invalidated because of the failure of the transferor to provide to the transferee a completed property disclosure form. However, the transferee may rescind the transfer agreement within three business days after the transferor has provided the transferee with a completed copy of the property disclosure form, or if the transferee has not received such a completed copy of the property disclosure form from the transferor the transferee may rescind the transfer agreement for up to thirty (30) days after the transferor has accepted the transferee's offer or the date of the closing of the transfer of the residential real property, whichever is earlier.

There are no penalties for failure to comply with the provisions of Section 5302.30 of the Revised Code that affect the title to the real property transferred.

Because there are no title ramifications under either Chapter 1506 or Section 5302.30 of the Revised Code and there are specific exclusions in the title insurance policy dealing with the rights and powers of governmental authorities the failure of the transferor to comply with the provisions of these statutes do not affect the coverage under the title insurance policy. Furthermore, the designation of the "Lake Erie Coastal Erosion Areas" are not matters within the public records as defined in the policy and no special title searches must be made for these areas.

However, if you are also handling the closing/escrow of the real property transaction for which you are to issue a Stewart Title Guaranty Company title insurance policy, and if a closing protection letter has been issued on your behalf by Stewart Title Guaranty Company then you may have some additional liability for certain matters discussed above. It is not your responsibility as a closing/escrow agent to determine if the transferor has complied with the provisions of the above statues by giving to the transferee the real property disclosure form required under section 5302.30 of the Revised Code unless your closing/escrow instructions make that a specific item you are to collect at closing or to account for at closing. In no event are you responsible for nor should you make inquiry into the actual disclosures made by the transferor to the transferee. It may merely be your responsibility to make certain that such a document was presented to the transferee.

If you have any questions you may contact me toll-free at 888-276-7842 or locally 781-3688.