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Published: Tuesday, 5/13/2008

Toledo land pact inspection measure takes effect


Toledo Mayor Carty Finkbeiner yesterday said a law taking effect today will help stop repeated and systematic abuses of unscrupulous real estate speculators by requiring inspections for homes purchased or sold under land contract.

"We move forward to protect Toledo's homeowners and continue to take steps to protect Toledo's housing stock," Mr. Finkbeiner said.

The seller would be responsible for the cost of the inspection, he said.

After a long-running battle between the real estate industry and central-city community development groups, Toledo City Council in November, 2007, voted 7-5 to approve the new rules.

The ordinance was recommended by a housing task force that Mr. Finkbeiner appointed in 2006.

Under the law, major problems with a house must be repaired before the closing and before the sale is recorded by the Lucas County Recorder.

Mr. Finkbeiner said some of the impetus for the measure stemmed from complaints about the use of land-contract sales by the defunct Westhaven Group, once Lucas County's largest residential property owner.

Westhaven Group bought, repaired, and sold blighted houses and at one time owned more than 300 properties in Lucas County. The state Commerce Department shut down Westhaven for securities fraud in December, 2005, when court-appointed receivers took control of the firm and began liquidating its assets.

"Toledo, Ohio can afford no more Westhavens," the mayor said.

Councilman Joe McNamara, who sponsored the ordinance, said the law would protect unsuspecting buyers.

"It's a very bad situation when unscrupulous businesses take advantage of people, take advantage of poor people," Mr. McNamara said.

Land contracts must now be legally recorded and dwellings must have a certificate of property code compliance issued by an inspector before a sale is finalized, Chris Zervos, the city's commissioner of building inspection, said.

When the law was being debated last year, property owners said they feared that in addition to the cost of an inspection - sometimes ranging from $175 to $300 - inspectors would order repairs that neither buyer nor seller could immediately afford.

To allow for fixer-uppers, the measure was amended to allow mandatory repairs to be made up to six months after a contract is signed, Mr. Zervos said.

According to Lucas County Recorder Jeanine Perry, 311 land contracts were recorded in Lucas County last year and 280 in 2006 out of more than 19,000 property transfers that year. It is believed, however, that a large number of land contracts are not recorded.

Unlike with mortgages, the seller in a land contract keeps the deed, an obstacle if the buyer needs to finance home repairs.

Contact Ignazio Messina at:


or 419-724-6171.

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