SitemapNew state legislation to be introduced by local lawmakers seeks to curb the impact and close loopholes for companies offering land installment contracts as a route to homeownership.
In a press conference Mondayat the Mahoning County Courthouse, state Reps. Michele Lepore-Hagan and Don Manning and state Sens. Michael Rulli and Sean O’Brien announced their bipartisan, bicameral effort. “You have to make sure the seller brings the house up to code, has an appraisal, records the contract with the county record and protects consumers,” said Lepore-Hagan, who last year introduced a bill by herself that was effectively the same measure. “The big difference is in the people who are introducing it. Now it’s a bipartisan joint effort. … The basic elements to the bill from the last General Assembly have to stay the same.” In the wake of the Great Recession, as houses throughout the state were foreclosed, buyers – many from out of state – swooped in and bought them up. Under land contracts, frequently known as “rent to own” or “lease to own” deals, the companies require buyers to take out high interest, long-term loans to purchase the house. The buyers are then required to pay for maintenance of the house, as well as any back taxes on the property. Eviction is common, the lawmakers said, when buyers miss a single payment. Unlike loans through traditional means, such as with a mortgage company or bank, there is no required grace period to make up missed payments and no eviction process aside from summoning the county sheriff. “This will bring them more in line with what banks and credit unions have to do,” said Manning, R-57 New Middletown. “It makes things a little more stable so that when they do get into that contract, they know they aren’t going to be thrown out if they miss a payment or they fall behind because they get laid off.” The legislation, named the Fair Lending Through Land Contracts Act, would require such lenders to have all properties on file with the county recorder office, which would provide tenants with some course of action if the owner breaches the contract. “Right now, there’s no registration, so there’s no way for anyone to know about it,” said O’Brien, D-32 Bazetta. “Before they even sign a contract, they’re going to be able to see that they have the proper procedures done. It’ll be registered with the local [county recorder].” The companion bill will be introduced in both the Ohio Senate and House of Representatives in the coming weeks, he continued, and will be refined as they pass through committees. To read the full story from The Business Journal, click here.