Ten, Infinity, Twelve, Fifteen, and Twenty-five

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Ten, Infinity, Twelve, Fifteen, and Twenty-five
by Robert Franco | 2007/05/30 |

What do these numbers have in common? They represent the evolution of the statute of limitations on state liens in Ohio. When I started abstracting certificates of judgments in favor of the State were valid for 10 years. For some reason, the State decided in 2003 that their liens should never expire! That caused a lot of concern among the abstractors; not so much because it was a problem presently, but we all expected that to become a horrible nightmare in 5, 10, or 15 years.

Fortunately, someone in our legislature must have been clued in by someone more knowledgeable because they changed it a few years later. They decided that they would make them good for 12 years. I'm not quite sure how they settled on 12 years, but that made things a bit better. However, they now had a problem... what do you do with the liens that were still valid when they made the change?

They devised some "interim period" with special rules. I'm still not sure how it all worked. We simply looked at everything from the oldest date that a lien could have been filed and would still be valid: 10 years prior to the insanity, which was 1993. We just showed any unreleased liens from 1993.

This year, they decided that wasn't good enough. Now those state liens are valid for 15 years. And again, we have those special rules for the "interim period." Here is the explanation from our underwriter:

Any judgment that would have expired prior to September 26, 2003 will not be revived

Any judgment filed prior to September 26, 2003 that would have expired during the “Interim Period” under the law at the time of the filing, may be continued by a filing by the State of Ohio within six (6) months prior to fifteen (15) years following the ten-year lifespan of these liens (i.e. the lien expires 25 years after filing, unless a continuation is filed). For example, a CJ filed January 30, 1994 would not expire until January 30, 2029.

Ah... our glorious legislatures hard at work. I can only imagine that the State in their infinite wisdom decided that they could raise some extra, much needed revenue if they could collect on judgements for a couple of extra years. I guess this is better than eliminating the statute of limitations all together - liens that never expire are a scary creation that just made me cringe.

I think this makes some sense, but I do not like to think that in the year 2029, we will be searching for liens back to 1994. Suppose one gets missed - and in today's environment you just know that will happen more often than it should. I wonder if the underwriters will still allow agents to insure on current owner searches; and, if so, would it be wise for the agent to do so?

I think the better course of action is to search back at least to 1993, regardless of the number of owners involved. Of course, I never close on a current owner search. Time permitting, I still like to do full searches on anything I am insuring. You just can't depend on the "last guy" doing his job properly anymore.

Any thoughts?

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com

Source of Title Blog ::

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Categories: Abstractors, Ohio Legislation, Small Agents, Title Standards

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	I received a very insightful e-mail...
	I received a very insightful e-mail today from a fellow Ohioan regarding the possible motives for the State changing their statute of limitations: I really think the reason we went from 6 years to 10, and now to 15 is for the same reason that the feds extended the period on Federal Tax Liens. It is a simple way to show more on the credit side of the books. As Ohio is required to have a so-called balanced budget, having this basically uncollectible revenue on the books makes it easier. I've noticed an increase in the last ten or fifteen years on renewals, it seems to be more automatic now. When they went to no expiration, they overshot what they needed to balance the budget, so we cut back to 12, they needed a bit more, so back up to fifteen. Fifteen also works well for the timing. In 2008 I would expect a two or three year addition to the term of the liens, and the same type of addition to the period in 2010 or 2011. I would love to be able to balance my books that way. Take the stuff I wrote off years ago and show it as accounts receivable. That is an excellent point. More hocus-pocus than meaningful change. But hey... if they can creatively balance the books without raising my taxes, God bless them.
	by Robert Franco \| 2007/05/31 \| log in or register to post a reply

Source of Title Blog

Robert A. Franco The focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

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