(a) No person, agent, firm or corporation shall sell, transfer, convey, accept, obtain, or purchase an interest in the title of improved residential real estate, including entering into a land installment contract for the sale or transfer of such a property, without complying with the point-of-sale requirements of this chapter, including the establishment of an escrow account as required in this section.
(b) No business entity, domestic or foreign, using a name other than an individual's own personal name, shall sell, transfer, convey, accept, obtain or purchase an interest in the title of any premises, including entering into a land installment contract for the sale or transfer of such a property or premises, unless such entity is both registered to do business in the State of Ohio with the Ohio Secretary of State as required by R.C. Title XVII and in good standing with the Ohio Secretary of State, as evidenced by a current and validly issued certificate of good standing.
(c) The seller or transferor shall deliver to and obtain the signature of the purchaser or transferee and the date of such signature upon a duplicate of the original certificate of housing inspection, which shall be deposited in escrow if there is an escrow.
(d) Attached thereto shall be a written agreement signed by seller and purchaser identifying the party who will be responsible to correct all violations listed with the certificate of housing inspection and notwithstanding any outstanding or new mortgage indebtedness or lien upon the premises, providing that all necessary funds sufficient to pay for the costs to correct all violations shall be deposited or retained in escrow, which funds may be released according to the provisions of this division upon the authority of the Department of Housing and Community Development in compliance with provisions set forth in this section.
(e) Prior to the closing of a transfer of any premises or improved residential real estate, the purchaser or transferee shall (i) have applied for and received a current certificate of housing inspection or a certificate of compliance, (ii) shall have designated in writing with the Department of Housing and Community Development the name, address, and telephone number of an agent who is a resident of Cuyahoga County, pursuant to Section 1474.03, and shall (iii) provide written or documentary proof that sufficient funds have been deposited in escrow as required in this section.
(1) Setting escrow amount. Except as otherwise provided in this chapter, if all violations listed on the certificate of housing inspection are not corrected prior to transfer of title or execution and recording of a land installment contract, the seller/transferor or purchaser/transferee shall deposit in escrow an amount determined and certified by the Housing and Community Development Director to be sufficient to cover the estimated cost of all necessary repairs. The amount deposited in escrow shall be determined by the Housing and Community Development Director, in the Director's sole discretion, after consideration of any cost estimates provided to the Director by the parties, as hereafter set forth.
A. The seller/transferor or purchaser/transferee may provide a written estimate from a qualified company for correction of the violations found in the certificate of housing inspection. The written estimate shall be in good faith and shall reflect current market rates for labor and materials, and the written estimate shall be itemized, to the extent practicable, in a manner that correlates to the violations listed in the certificate of housing inspection. The Director or the Director's designee shall determine whether the estimate complies with the requirements of this section and may reject an estimate that fails to reasonably reflect the fair market cost of repairs; if an estimate is rejected, the Director may send a written notice of such rejection to the party establishing the escrow and may establish the amount required to be deposited. Any such notice may be appealed to the Board of Zoning Appeals. The party submitting the estimate may provide the Director a new estimate that complies with the requirements of this section for the Director's further consideration.
(2) Release of escrow funds. Funds shall be disbursed from escrow by the escrow agent only upon written authorization from the Housing and Community Development Director or his designee. Authorization to release funds held in escrow pursuant to this division shall be granted upon the determination that violations have been corrected or remediated and that sufficient funds will remain in escrow to correct all remaining violations.
A. If the funds held in escrow are less than five thousand dollars ($5,000), no funds held in escrow shall be released until all violations are corrected.
B. If the funds held in escrow exceed five thousand dollars ($5,000) but are less than twenty thousand dollars ($20,000), the Director or the Director's designee may authorize one partial release of funds from escrow upon application, in an amount not to exceed the lesser of (i) the actual amount of expenditures made on repairs to correct violations or (ii) the amount which, when subtracted from the funds held in escrow, would leave a sum sufficient to correct all remaining violations.
C. If the funds held in escrow are equal to or exceed twenty thousand dollars ($20,000) but are less than forty thousand dollars ($40,000), the Director or the Director's designee may authorize two partial releases of funds from escrow upon application, in an amount not to exceed the lesser of (i) the actual amount of expenditures made on repairs to correct violations or (ii) the amount which, when subtracted from the funds held in escrow, would leave a sum sufficient to correct all remaining violations.
D. If the funds held in escrow are equal to or exceed forty thousand dollars ($40,000) but are less than sixty thousand dollars ($60,000), the Director or the Director's designee may authorize three partial releases of funds from escrow upon application, in an amount not to exceed the lesser of (i) the actual amount of expenditures made on repairs to correct violations or (ii) the amount which, when subtracted from the funds held in escrow, would leave a sum sufficient to correct all remaining violations.
E. If the funds held in escrow are equal to or exceed sixty thousand dollars ($60,000), the Director or the Director's designee may authorize four partial releases of funds from escrow upon application, in an amount not to exceed the lesser of (i) the actual amount of expenditures made on repairs to correct violations or (ii) the amount which, when subtracted from the funds held in escrow, would leave a sum sufficient to correct all remaining violations.
(f) A copy of such acknowledged receipt of the certificate of housing inspection and the agreement required above shall be provided to the Department of Housing and Community Development as a condition of transfer of title.
(g) The escrow requirements of this section shall not apply to County Land Reutilization Corporations, as organized under R.C. Chapter 1724, when the County Land Reutilization Corporation is a purchaser of property in the City.
(h) No escrow or bond shall be required if the City is the purchaser or transferee of the premises, whether the premises is intended to be repaired or demolished.
(i) If all repairs to a premises required on a certificate of housing inspection are not completed within a reasonable period of time, as determined by the Director or the Director's designee, the City may withdraw such funds from the escrow account as shall be necessary to pay for the completion of the repairs or demolition of the property, as the City determines to be necessary. The City shall provide written notice to the owner and any lessee or party in control of a property, and to the party that established the escrow, at least 30 days prior to the City's withdrawal of funds from the escrow account. In no case will the City withdraw any funds from escrow pursuant to this section prior to the expiration of the certificate of housing inspection.
(Ord. 2019-65. Passed 11-4-2019.)