Land Bank Playbook: Functions of the Auditor’s Office in Land Banking

Land Bank Playbook Section V

A. Introduction

The land bank statutes as amended by S.B. 353 and H.B.313 authorize the LRC to receive properties from tax foreclosure, deeds-in-lieu of foreclosure and from the Auditor’s Forfeiture list. Although the general process of tax foreclosure has not significantly changed, final decree disposition options have significantly changed insofar as the necessary elected County offices choose to employ the various reforms established under the Act.

B. Auditors’ Role in Property Disposition to LRC

a. Property obtained through Tax Foreclosure

Tax foreclosure on vacant and abandoned properties can occur either in the civil courts or the Board of Revision (“BOR”) pursuant to R.C. 323.65 through 323.79 (abandoned/vacant properties only). When a tax foreclosure case goes to final judgment of foreclosure (the “decree”), the property is ordered to be exposed to sale or transferred directly to a LRC or municipal land bank. If there is no third party buyer at Sheriff’s sale, the property is deemed sold to the LRC. These transfers happen by virtue of a Sheriff’s deed. Once the deed is filed by the LRC, it is important that all LRC properties be held exempt from real estate taxes. (R.C. 5709.12(F)). How does the Auditor and LRC acknowledge this tax-exempt status? When deeds are filed by the LRC, the Auditor and LRC should each execute a form of acknowledgement or “tax remittance” form which administratively acknowledges that the properties have been removed from the active tax rolls commencing on the date of title transfer to the LRC. See: R.C. 5709.12(F). See also: R.C. 5722.11

b. Property Acquired from the Auditor’s Forfeiture List

Once a property is exposed to Sheriff sale after a decree, and failing any bidders, the property is ultimately eligible to be transferred to a city land bank or a LRC (if they elect to take a property) (Section VII discusses how this election is made). If there is no bidder and no land bank is willing to take the property (or the property is not in a land bank city), then the property “escheats” without deed to the State of Ohio. Pursuant to the foreclosure decree, the State of Ohio holds the property by and through its agent who is the Auditor. The Auditor in turn conducts one or more auctions annually in an effort to try to convey these properties and get them back into taxpaying hands. This is an area where significant speculation and property devaluation occurs. R.C. 5723.04(B) now authorizes the LRC to acquire forfeited properties from the Auditor’s list, by Auditor’s deed, via a simple written request. See also: R.C. 5722.05(D) Again, the tax remittance acknowledgement should be executed between the LRC and Auditor to make sure the property is not placed on the active tax rolls during the LRC’s ownership. The cost for an Auditor’s deed is $45.00.

c. Deed-in-Lieu and Other Purchased/Donated Properties

R.C. 5722.10 authorizes a private property owner who is delinquent in taxes to forfeit his/her property in lieu of a tax foreclosure. Specific to deeds in lieu of foreclosure, R.C. 5722.10 requires that the Auditor give its prior “consent” (“…such conveyance may only be accepted with the consent of the county auditor acting as the agent of the state pursuant to section 5721.09 of the Revised Code.”). The statute provides no guidance or standards for giving such consent, but it can safely be assumed that if the property is deemed “non-productive,” tax delinquent, vacant and/or abandoned, such consent will typically follow. In the case of a LRC, care should be taken not to accept and file a deed-in-lieu until the LRC has complied with the Auditor’s deed-in-lieu “consent” process. This usually consists of a form which is executed by the Auditor and the land bank just prior to the transfer.

Unlike cities, the LRC is authorized to accept donations of properties that are not delinquent and to hold them tax-exempt. It may also purchase properties. R.C. 5709.12(F) does not require the LRC to file for a real estate tax exemption form with the Ohio Tax Commissioner for these properties to be deemed real estate tax-exempt. Therefore, the LRC and Auditor should execute the tax remittance acknowledgement for these properties as well.

C. Tax Exemption—Conveyance Tax Exemption

As noted above, all properties in the inventory of a LRC are expressly real estate tax-exempt. Also, transfers from a LRC to a third party are exempted from any conveyance fee. Although this exemption is prescribed explicitly in R.C. 319.54(G)(3)(y), the DTE 100 form (which lists those transfer types which are exempted from the conveyance fee) does not, as of this writing, have a space for this exemption. Exemption “(a)” on the DTE 100 form is sufficient to affirm the exemption which exempts transfers “[t]o or from …any instrumentality, agency, or political subdivision of…this State.”

Section V Sample Forms

  • Form V-1 – Tax Remittance Acknowledgement for LRC-Acquired Properties
  • Form V-2 – Request Letter to Acquire Property from Auditor’s Forfeiture List
  • Form V-3 – Deed-in-Lieu Auditor Consent Form (R.C. 5722.10)
  • Form V-4 – Form Auditor’s Deed
  • Form V-5 – Form DTE 100, Conveyance Tax Exemption Form