The Ohio legislature recently passed Amended Substitute Senate Bill 257 which will have a significant impact on real estate transactions moving forward. Beginning April 6, 2017, Ohio law governing title defects will be changed substantially. The new legislation will shrink Ohio’s title defect curative period from 21 years to 4 years. Thus, a recorded real property instrument, by operation of law, will be cured of defects 4 years after the recording date and the document will become effective as if it originally had been legally executed, acknowledged, and enforceable. Also, interested parties previously had to bring adverse claims against a real property instrument with an alleged defect within the 21 year curative period. However, that limitation for adverse claims will no longer be in effect with the implementation of the new 4 year period.
Additionally, the new Ohio law states that upon delivery to and acceptance by a county recorder, instruments will be presumed to be valid and effective, as well as enforceable against the interest of the individual who signed the document. Once an instrument is recorded, a party bringing an adverse claim against the instrument will need to display “clear and convincing evidence” of fraud, duress, incompetency, or forgery in order to rebut the instrument’s presumed validity.
This new legislation will have an impact on property owners and potential real estate transactions by simplifying and expediting title reviews moving forward. Additionally, property owners will be more at ease as they will no longer need to concern themselves with potential defects in the chain of title dating back two decades. This new law is a step forward with regards to Ohio title law as it more accurately reflects title law trends across the country.