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Real Estate Cases
Conditional Use Permit - Incomplete Application
Anderson v. Vandalia
(2nd Dist-2005), 159 Ohio App.3d 508
City council improperly granted a fraternal
organization’s request for a conditional use
permit where Board of Zoning Appeals recommended
permit approval on an incomplete application that
failed to include the required narrative statement
and requisite written findings.
Resident property owner had standing to challenge
the permit because his property was adjacent to
the land at issue.
Foreclosure On Unrecorded Mortgage
ABN AMRO Mtge. Group, Inc. v. Jackson
(2nd Dist.-2005), 159 Ohio App.3d 551
Foreclosure on an unrecorded mortgage was upheld
where intervening purchaser was sufficiently
notified of the foreclosure action by valid lis
pendens (notice created by lawsuit). The
foreclosure action identified the property’s
permanent parcel number, street address, recording
information and subjection of the property to
other liens.
Prescriptive Easement Not Lost by Request for
Permission
Wood v. Village of Kipton,
(2005), 160 Ohio App.3d 591, 828 N.E.2d 173
Property owners filed declaratory judgment suit
against village in order to quiet title to road
which bisected their property. Appellate court
declared that the village had gained a
prescriptive easement before the owners had
acquired the property because the road had been
used openly, notoriously, continuously, and
adversely for at least 21 years. The easement
was not lost by village’s subsequent request for
permission to use property for road.
Regulatory Taking Test Amended
Lingle v. Chevron U.S.A. Inc.
(2005), 125 S. Ct. 2074
In an action challenging a statute that
established a rent cap on company-owned service
stations, the United States Supreme Court declared
that the test of whether government regulation of
private property “substantially advances”
legitimate state interests is no longer
appropriate to apply in a “takings” challenge of a
governmental regulation because that test focuses
on a due-process issue.
Real
Estate Tax Rates
Effective with the
2005 tax year, the 10 percent rollback tax
reduction rate will be repealed for property
primarily used in a business activity such as
commercial and industrial properties. Property not
within the business activity definition includes,
farming, and leasing or developing of certain
family dwelling properties. The 10% real estate
tax rollback was enacted by the Ohio General
Assembly in 1971 partially, in an effort to offset
the effect of the personal income tax enacted by
the state the same year. The new tax law will also
eliminate the personal income tax, phasing it out
over a five-year period.
Commercial
Activity Tax
The Commercial
Activity Tax (CAT) imposes tax on business with a
substantial nexus in Ohio, and unlike the
Corporation Franchise Tax, which will be phased
out, CAT applies to individuals, corporations, and
pass-thru entities like limited liability
companies. Under CAT, businesses will be required
to pay a minimum $150 in taxes for annual gross
receipts above $150,000 and less than $1 million
and will be taxed at 0.26% for gross receipts in
excess of $ 1 million. There is no tax on gross
receipts under $150,000. CAT will be phased in
over the next five years but it is required that a
taxpayer register for CAT by November 15, 2005, or
30 days after reaching the $150,000 minimum.
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Construction Cases
Arbitration - Inadequate Construction Project
Funding
Universal Contracting Corp. v. Aug
(Hamilton App. 2004), 2004-Ohio-7133
Arbitrator awarded damages to contractor for
corporation’s breach of duty where corporation
misrepresented its ability to fund the project.
Arbitrator’s award precluded contractor’s
subsequent lawsuit against officer of corporation
who provided the false information.
Architect Liability/Parties to Contract
Epicentre Strategic Corp. v. Perrysburg Exempted
Village School Dist.,
2005 U.S. Dist. LEXIS 4320.
Architect was dismissed from contractor’s suit
against school district for breach of contract
where no contractual relationship existed between
the contractor and the architect and any “nexus”
established by the contractor would only be
relevant in a claim for negligence, not breach of
contract.
Architect/Subcontractor Liability for Equipment
Tackett v. Gas Energy, Inc.
(Dec. 21, 2004), 2005-Ohio-6979
Injured parties sought damages for negligence and
product liability.
Architect was not liable for injuries caused by
malfunctioning chiller where supplier neglected to
provide installation specifications and architect
was under no duty to review or correct supplier’s
installation specifications.
Subcontractor similarly was not liable for
negligent installation where there was no evidence
that subcontractor installed the specialized
equipment or was responsible for its installation.
Matter was remanded to trial court to determine
supplier’s liability.
Lost Profits for Improperly Rejected Bid
Cementech, Inc. v. City of Fairlawn
(2005), 2005 Ohio 1709, 827 N.E.2d 819
When unsuccessful bid was improperly rejected,
contractor sought injunctive relief and money
damages, which were denied except for bid
preparation costs. Appellate court awarded lost
profits to the contractor because injunctive
relief was no longer available, the city had
abused its discretion in the bidding process, and
it did not violate public policy.
Substantial Completion and Payment Under
Construction Contract
Fields Excavating, Inc. v. Western Water Co.
(Dec. 30 2004), 2004-Ohio-7143
Substantial completion does not entitle a
contractor to final payment and its retainage if
the terms of the contract provide otherwise.
Contractor was not entitled to interest accrued
from the date of substantial completion where
contract expressly stated that payment could be
withheld until all claims against the project had
been settled.
Surety Obligations Under Modified Payment Terms
Water Works Supplies, Inc. v. Grooms Construction
Co., Inc.
(Mar. 14, 2005) Highland App. No. 04-CA-12,
2005-Ohio-1292
Alterations to payment arrangements between
contractor and supplier did not negate surety’s
obligation under payment bond where language of
the bond unambiguously indicated that surety
waived its right to assert any change of contract
terms as a defense.
Surety was not relieved of its obligation under
payment bond despite modifications of the payment
terms of the contract.
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