Unquestionably the most significant role of the Prosecutor is in the prosecution of tax foreclosure cases judicially or in the Board of Revision. Briefly, a tax foreclosure essentially begins with the Auditor’s certification of tax delinquency. The delinquency is certified to the Treasurer for collection who eventually turns it over to the Prosecutor for tax foreclosure. The Prosecutor files the action with the Clerk of Courts, which assigns the case either to the Board of Revision or to a judge randomly selected. Upon the filing and Clerk’s journalization of foreclosure decree, the Clerk is ordered to prepare an Order of Sale or Transfer of the property. The Clerk then transmits this to the Sheriff who exposes the property for sale or executes a direct deed transfer to the LRC or municipal land bank. To employ the Act’s tax foreclosure reforms generally, it is important that the Prosecutor foreclosure staff evaluate and “buy in” to all forms needed to implement the reforms.
In the Board of Revision section of this publication, there is an extensive compilation of simplified pleading and adjudication forms. It is important that the Prosecutor foreclosure staff feel comfortable both with these forms and with prosecuting cases in the Board of Revision. The same applies to judicial cases in those counties where the judges choose to invoke the reforms.
B. Primary Pleadings, Orders and Forms Relevant to Prosecutor for Expedited Foreclosures and Direct Transfers to LRC
a. Pleadings and Orders
The most significant tax foreclosure documents for the Prosecutor’s approval as well as the approval of the adjudicating body are: 1) Complaint; 2) Notice of Final Hearing; 3) Decree of Foreclosure; 4) Order of Sale/Transfer; and 5) Confirmation of Sale/Transfer/Order of Forfeiture document.
These will also be discussed in the Appendix which includes Board of Revision forms. Once–and if–these simplified forms are adopted by the Board of Revision and the expedited processes embraced, the Board of Revision is a much-preferred forum for pursuing tax foreclosures of vacant and abandoned properties.
1. The Complaint R.C. 323.69(A) requires that tax foreclosure actions brought in the BOR aver that the parcel is abandoned land as defined in R.C. 323.65. This is a jurisdictional requirement of the BOR. See: R.C. 323.65 and R.C. 323.66. The Complaint will be captioned in the same pleading form prescribed in Rule 8, Civ. R. (like all civil actions), but it will be captioned “In the Board of Revision, XYZ County.” The Complaint should also specifically aver that the case seeks to invoke the BOR jurisdiction under R.C. 323.65 through 323.79. Additionally, in order to invoke the Alternative Right of Redemption (“ARR”) pursuant to R.C. 323.78 (“ARR”) whereby Sheriffs’ sales are eliminated and the transfers made directly to a city land bank or LRC, the Complaint must include such a request.
2. Notice of Final Hearing In order to invoke that ARR, it is also necessary under R.C. 323.69 and R.C. 323.78 that any notice of final hearing inform the parties that the ARR will be applied to the case. Because cases often get continued for a variety of reasons, orders of continuance should also include boilerplate language informing all parties of the application of the ARR. Defendants served by publication who do not actually receive final notice of hearing is a matter discussed further on in this Section VII.
3. Final Foreclosure Adjudications (“Decrees”) Counties have their own unique forms and need only modify them to the extent BOR foreclosures occur and/or the judiciary desires to apply the reforms which result in faster foreclosures and direct transfers. Assuming the reforms are applied, the Adjudication of Foreclosure or “the Decree” should operate to authorize: 1.) a “sale” where a direct transfer to a LRC doesn’t apply; 2.) a direct transfer to a municipal land bank or LRC in the case in the case a direct transfer applies; and 3.) a directive indicating which city land bank or LRC will receive the property in the case of a direct transfer applies or after exposure to sale but with no bids. A “check-the-box” form can be used for this purpose to avoid confusion on the multiple types of dispositions. Of course, it must be a form accepted by the BOR, the Court and the Prosecutor. Forms and discussion about these specific types of dispositions are provided in the Board of Revision Appendix.
4. Orders of Sale; Orders of Direct Transfer Under R.C. 323.65 through 323.79, upon issuance of a final Adjudication of Foreclosure, there are several possible dispositions:
- i. Sheriff sale auction with no land bank or LRC interest in acquisition
- ii. Sheriff sale auction with land bank or LRC interest in acquisition
- iii. direct transfer orders based on presumed Auditor valuations
- iv. ARR direct transfers
Once these orders are understood and digested, a one-form “check-the-box” combined Order of Sale/Transfer can accommodate all of these dispositions based on the final Adjudication awarded by the court or the BOR. Forms and discussion about these specific types of dispositions are provided in the Board of Revision Appendix. The most unique reforms involve “Orders of Transfer,” i.e., direct transfers to land banks without Sheriff’s sale.
i. Sale at Sheriff’s Auction: (no land bank interest). Tax foreclosure of vacant and abandoned property in which no land bank city or LRC have an interest necessarily will involve a true order of sale directing the Sheriff to expose the property to one sale. If no one bids at this sale, the property escheats to the State of Ohio. If someone does win the bidding and acquires the property, the Sheriff need only collect the taxes and the costs and then sign the pre-prepared deed and deliver it to the buyer. The Sheriff would report the sale to the Clerk of Courts followed by a confirmation of sale by the Court or Board of Revision.
ii. Sale at Sheriff’s Auction: (with land bank interest). This involves cases where the Auditor’s rebuttably presumed value exceeds the tax impositions and the property is being exposed to sale, but with municipal or LRC interest in acquiring the property failing any bidders at auction. In this instance, the Sheriff advertises the property for sale and if someone purchases the property then the same process takes place as the process in No. 1 above. However, if no one bids at the first bid, this Order of Sale directs the Sheriff to automatically assemble the cost bill from the Prosecutor or Clerk and thereafter sign the pre-prepared deed to the municipal land bank or the LRC. Like number one above, this is reported to the Clerk and the adjudicating body confirms this “sale.”
iii. Direct transfer based on Auditor’s values. In cases where the tax impositions exceed the Auditor’s rebuttably presumed fair market value, if no interested parties contest those valuations at the final hearing, then the Board of Revision is authorized to order the property directly transferred to a municipal land bank or LRC without exposure to sale. Likewise, the Sheriff prepares a cost bill and merely executes the deed and delivers it to the particular land bank or LRC upon payment of the cost bill. Because there is no “sale” in this situation, there is no sale to “confirm.” In this case “confirmation” occurs (and the right of redemption expires) upon the filing and journalization of the Order to Transfer directly to such municipality or LRC.
iv. Alternative right of redemption transfers. The orders in numbers 2 and 3 above, necessarily involve cases in which the Prosecutor or Board of Revision have chosen not to invoke the ARR provisions in R.C. 323.78. In those circumstances, whether or not a direct transfer can occur hinges on the rebuttably presumed fair market value of the real estate. If that rebuttably presumed value is not rebutted by any of the parties, then direct transfers can occur when the tax impositions exceed the rebuttably presumed fair market value.
With the enactment of the ARR (R.C. 323.65 and R.C. 323.78), Sheriff’s sales can altogether be eliminated for abandoned/vacant lands without reference to Auditor valuations. This is because whereas the extinguishment of the right of redemption under pre-existing laws was a function of a confirmed Sheriff’s sale (i.e., a sale followed by a confirmation), R.C. 323.78 authorizes the extinguishment of the right of redemption as a function of time. Indeed, upon the expiration of forty-five (45) days after the journalized entry of foreclosure, all equity of redemption is forever terminated and direct transfers can be made to municipal land banks or LRCs. Pursuant to these orders, the Sheriff merely signs the pre-prepared deed, assembles a bill for costs and reports the transfer back to the Clerk of Court.
The termination of the equity of redemption is self-executing and requires no further action of the adjudicating body. R.C. 323.78(B). In cases where the Auditor’s presumed value is greater than the tax impositions, use of the alternative right of redemption is particularly useful for avoiding Sheriff’s sales of abandoned property. In cases where the Auditor’s presumed value is less than the tax impositions it is not necessary to wait for the 45 day alternative right of redemption. In these cases, R.C. 323.71 and 323.73(G) authorize the immediate direct transfer of the abandoned lands to a LRC or municipal land bank. In these cases, the right of redemption expires upon the Order to Transfer which accommodates the final Adjudication of foreclosure.
5. Confirmation of Sales/Orders of Forfeiture When a property sells or transfers under any of the aforesaid dispositions in VII(B)(2)(d) (other than direct transfers based on valuation or ARR application), a Confirmation of Sale Order or Order of Forfeiture (as the case may be) must be filed once the transfer or sale occurs. Ideally, a “check-the-box” document incorporating the particular disposition can be used. Of course, if the Court or BOR do wish to use the “check-the-box” format, they are free to use any form provided the appropriate dispositional language is incorporated. Forms and discussion about these specific types of dispositions are provided in the Board of Revision Appendix.
b. Land Affidavit Management
R.C. 5722.03(B) and (C) require that in order for a property to be eligible for transfer to a local land bank or LRC the case file must include a form of land statement (often a “land affidavit”) from the LRC or the land bank city (also referred to in the statutes as a “electing subdivision”) which affirms to the court or BOR that the property is non-productive tax delinquent abandoned land and that: a.) the city or entity in question is an “electing subdivision” under the land bank statutes; b.) that the property is eligible for transfer to such electing subdivision(i.e., “non-productive;” vacancy/abandoned lands; or R.C. 715.261 nuisance conditions).
The Prosecutor mails the land affidavit to all electing subdivisions wherein a tax foreclosure case is pending which asks the municipality (or LRC) to complete the land affidavit.
Even if filled out and returned to the Prosecutor, the land affidavit may not indicate whether the City actually wants the property (most cities only take vacant lands with no structures). And, if a municipal land bank indicates in does not want the property, a LRC may want the property as part of its demolition program. For example in Cuyahoga County, cities typically reject residential or commercial structures into their land reutilization programs whereas the Cuyahoga County LRC accepts residential structures. If a city doesn’t respond to the Prosecutor’s land affidavit, or if a city responds but indicates it does not want the structure, how can the LRC communicate its intention and desire to receive the property? In these cases, the Prosecutor resends the land affidavit to the LRC which can accept or reject the property. In all cases, the land affidavit gets filed with the Clerk of Courts. IF the LRC does not elect to take the property, it indicates this on the land affidavit form in which case the property will likely end up on the Auditor’s forfeiture list
This is an important form for land banking and BOR foreclosures. While this is a simple one-page form, it has been revised in such a way to:
- affirm vacancy/abandonment
- determine which foreclosure forum to pursue (Board of Revision or Judicial)
- determine up-front whether the property will be exposed to sale or be directly transferred
- whether, and to which land bank the property is being directed (LRC or city land bank)
- whether the property will escheat to the State of Ohio
c. Providing Constitutionally Adequate Notice of Summons and Complaint to all Parties listed on a Schedule B Title Report; Notice to Defendants by Publication.
Because the Civil Rules of Procedure do not apply to Board of Revision tax foreclosures (except for Civil Rule 4 or as otherwise needed in the BOR’s discretion), there are typically no pre-trials or interim hearings; rather, notice of the Complaint and final hearings are ultimately given to all parties by certified, ordinary mail or publication notice after which a final hearing date is set. Once all parties have been served (as reflected on the Clerk’s docket), the Prosecutor and the adjudicating body should have a case management system by which this is communicated to each other so that hearings can be promptly set. In Cuyahoga County, for example, once service of process is perfected, the Cuyahoga County Prosecutor files a “Request for Hearing” which tells the Board of Revision that the case is ready to proceed.
Because the Civil Rules do not apply in BOR cases, it is logical to ask how a party served by publication is given notice of the final hearing since there is no Rule 8, Civ. R., twenty-eight (28) day answer period by which such a defendant could be deemed in default. The process used in Cuyahoga County is that in those cases where the Prosecutor must serve a party by publication, the publication notice itself includes the final hearing date. The BOR does this by establishing a form of “call day” for cases requiring service by publication. By having a “call day” set far enough in advance to accommodate the time requirements [See: R.C. 5721.18 “…such publication shall be made once a week for three consecutive weeks instead of as provided by the Rules of Civil Procedure, and the service shall be complete at the expiration of three weeks after the date of the first publication…”] for service by publication, a party served by publication not only is “served” with the lawsuit and the information typically required for publication, but the final hearing date is included as well.
If the publication-defendants do not attend the original hearing as noticed, an adjudication by default is entered. Similarly, if a final hearing date is established by the publication and the hearing occurs but is continued for some reason, no further notice to the defaulting publication-served defendant is required. In these instances, R.C. 323.69(C) provides that if a party is in default of a hearing, that party is not entitled to any further notice. The concept is akin to Civil Rule 5(D), Civ. R., which provides that parties in default are not entitled to any further service papers. As with all foreclosures involving defendants who must be served by publication, the Prosecutor must still “scrub” the public records (Probate, Criss-Cross Directories, Bankruptcy, etc.) to assure that all reasonable efforts were made to determine the whereabouts of defendants served by publication.
d. Nuisance Liens
Sometimes a Board of Revisions tax foreclosure case is filed on delinquent properties which include old water liens or R.C. 715.26 municipal nuisance liens for demolition, board-up or weed cutting. If the nuisance lien is valid, the taxpayer, of course, is required to pay or risk foreclosure at some point. However, some cities sometimes place annual blanket liens on hundreds of vacant properties for weed cutting on properties within their vacant land databases. Taxpayers and Community Development Corporations (CDC) which faithfully cut their lawns or hire contractors to do so, still occasionally end up with liens due to such blanketing of liens.
Prior to the statutory reforms, the only way to resolve improvidently certified municipal nuisance liens during a tax foreclosure case was to continue the case for months until the taxpayer and municipality resolved the issue. Under R.C. 323.70(A), the BOR now has the authority to hear evidence on the validity of these certified nuisance liens to remove them if they are deemed invalid based on a preponderance of the evidence.
When these liens are challenged by a BOR litigant, it is the Prosecutor’s obligation to present sufficient evidence to substantiate lien validity by securing evidence from the municipality to substantiate (and usually settle) the matter. While these represent a disproportionately small number of cases in the BOR, they can result in a backlog of continued cases and highly frustrated CDCs and taxpayers. The Appendix of BOR forms provides sample orders of dismissal of improvidently assessed municipal nuisance liens.
Section VII Sample Forms
- Form VII-1 – Complaint
- Form VII-2 – Notice of Final Hearing
- Form VII-3(A) – Adjudication of Foreclosure (Sale)
- Form VII-3(B) – Magistrate’s Decision Form
- Form VII-3(C) – Combined Adjudication of Foreclosure (Sale/Direct Transfer)
- Form VII-4 – Combined Order of Sale/Transfer
- Form VII-5 – Combined Order of Confirmation/Order of Forfeiture
- Form VII-6(A) – Combined Land Affidavit (municipal agency agreement w/ CLRC)
- Form VII-6(B) – Combined Land Affidavit (w/out municipal agency agreement)
- Form VII-7 – Publication Notice for BOR Defendants
- Form VII-8 – Request for Hearing