• City of Akron Criminalizes Non-Disclosure of Housing Code Violations
  • March 19, 2013 | Author: Gregory A. Anglewicz
  • Law Firm: Weltman, Weinberg & Reis Co., L.P.A. - Cleveland Office
  • On March 11, 2013, the City of Akron, Ohio passed an emergency ordinance requiring seller disclosures of any housing code violations and creating criminal liability for non-disclosure. The ordinance, which took effect immediately, modifies the city's Environmental Health Housing Code (Section 150.32) and Building Code (Section 190.1091).

    Similar to O.R.C. 5301.253, the ordinance requires a seller of real estate to provide notice of any housing code violation prior to entering into a purchase agreement. This obligation is in addition to the Residential Property Disclosure form required under O.R.C. 5302.30, and would apply to even those sellers expressly exempt under that state requirement, such as a mortgagee who acquired real estate as a matter of default.

    The ordinance expands the existing state requirement by expressly requiring sellers to obtain written acknowledgement from the purchaser or grantee of the actual written code violations. Further, the seller is required to provide continual notice of any additional violations through the recording of the title transfer.

    It should be noted that failure of the seller to provide notice of any code violations does not protect the purchaser from also assuming liability. State law and the ordinance provide that any notice of violation issued serves as constructive notice to all subsequent persons or entities who acquire title.

    In addition to augmenting state notice requirements for sellers, the ordinance adds criminal penalties for failing to provide the proper notice of violations. A first offender would be subject to a third-degree misdemeanor carrying with it a fine of not more than $500 and/or imprisonment of not more than 60 days. Any subsequent offense would be a second degree misdemeanor, with a fine of not more than $750 and/or 90 days imprisonment. All convictions would be subject to the mandatory minimums set forth in section 150.99 (D) and 199.999 (D).

    The changes in the law were prompted by a high profile case in which a veteran, Larry Modic, purchased a highly distressed property through a short-sale. In that case, the seller provided the required Residential Property Disclosure Form and indicated he had no knowledge of any code violations. After the sale, the city sought to demolish the property for existing violations. Subsequently, the purchaser brought an unsuccessful suit to prevent demolition by the city. In response to public outcry, this ordinance was introduced. Upon passage of the ordinance, City Council President Moneypenny stated, "This helps our citizens who might be a victim of this," referring to the Modic case.

    These changes to Akron's Environmental Health Housing Code and Building Code introduce additional criminal risk for the sale of real estate in the city of Akron, especially for those transactions involving REO property. Due to the difficulties related to obtaining timely notice of violations on REO properties, sellers and their agents should obtain written verification of any code violations before entering into a purchase agreement, and re-verify this information just before the real estate is transferred of record.