Changes to Real Property Instruments in Effect April 6, 2017

Ohio’s Revised Title Cure Statute Becomes Effective April 6, 2017

By: David J. Lindner, Esq.

Governor Kasich recently signed into law SB 257, which revises Ohio Revised Code Section 5301.07, the title cure statute. The effective date of the revised statute is April 6, 2017.

The revised statute creates a rebuttable presumption that, when a real property instrument is delivered to and accepted by the appropriate county recorder, and is signed and acknowledged by a person with an interest in the real property described in the instrument, the instrument has the stated effect upon that person’s interest in the real property, and the instrument is valid, enforceable, and effective.

“Real property instrument” is defined broadly to include any instrument that may be accepted for recording by the county recorder, including deeds, leases, mortgages, easements, options to purchase real estate, and memoranda of trust.

Under the version of the statute in effect prior to April 6, 2017, a defect in an instrument conveying real estate, or any interest therein, is cured if the instrument has been of record for more than 21 years. In the revised version of the statute, the time period is reduced to just four years and the scope of the statute is also broadened in several significant respects.

The original statute limited the types of defects that may be cured to the following:

(A) Such instrument was not properly witnessed.

(B) Such instrument contained no certificate of acknowledgment.

(C) The certificate of acknowledgment was defective in any respect.

In contrast, the revised statute includes those same items as part of a non-exclusive list of items that may be cured, with the addition of the following fourth specified item:

(4) The name of the person with an interest in the real property does not appear in the granting clause of the instrument, but the person signed the instrument without limitation.

The revised statute also expands the effect of recording a defective instrument by providing that once filed in the chain of title, the instrument nevertheless constitutes constructive notice to all third parties. Further, the revised statute is intended to be retroactive in effect, subject to constitutional limitations.

In most commercial transactions instruments to be recorded are reviewed by the parties’ attorneys, the title company, and the county recorder’s office before they are actually recorded. This process ensures that most instruments are properly executed. However, there are certainly instances where defectively executed documents slip through the cracks. The revisions to Ohio Revised Code Section 5301.07 will help to address those defective documents that end up actually being recorded.