Title Ins & Point of Sale Inspections - Ohio

[Oren K.]

A question for all the knowledgeable lay title experts around. I understand that this is not legal advice but 'just' the opinions of (hopefully) informed people.

I purchased a multifamily property at an auction in an Ohio municipality that requires a 'Point of Sale' (POS) inspection prior to a property being transferred. For those that do not have this in their jurisdiction, a POS inspection is the municipalities procedure / opportunity to make sure the building is up to 'code', note any violations and hopefully get them fixed. A property can be sold 'AS IS WHERE IS' but still requires the inspection and certificate to be issued by the building department. The responsibility to order the POS rests absolutely with the owner / seller.

The closing date came and the ownership was transferred but no POS was carried out. The county registrars office should NOT have allowed the transfer without the POS but they did. The municipality has 'become aware' of the transfer and is now demanding a POS.

Does this become a title defect? Is there a claim against the title or escrow company for not ensuring that the local ordinances of the municipality were followed?

[Christian Carson]

Originally posted by @Account Closed:

Interesting topic @Oren K.?) has had experience in wholesaling Cleveland properties with POS violations?

Specifically can you assign or double close a purchase contract for a property with POS requirements? 

 Hal,

Typically it is illegal under city ordinances for a seller or escrow agent to transfer a property without first complying with the city POS regulations. Most cities allow two methods of compliance:

1. 1. Fix the violations;
2. 2. Deposit funds into escrow at the direction of the city as security for repairs.

I very much doubt you'll be able to find an escrow/title agent in town who will do a double closing in a POS city because these ordinances often attach criminal penalties to noncompliance. An assignment closing will be a different scenario as the ordinance doesn't typically contemplate contracts for purchase (although I know at least one city that I believe requires you to at least get the initial POS inspection before entering into a contract to purchase).