It was back in 2010 when Michael J. Sikora III set out to make much-needed changes to Ohio’s title cure statutes.
Cure statutes are intended to address a problem with the way a real estate document is signed or notarized, or an instance where certain language in the document is in error. As the president of the Ohio Land Title Association at the time, as well as the leader of a law firm and an independent title agency, Sikora was aware that there was frustration with Ohio’s curative law.
“Ohio’s curative title statute was enacted in 1961 and hadn’t been updated, so it was out-of-date, out-of-touch and largely ineffective,” says Sikora, president at Omni Title LLC and managing partner at Sikora Law LLC.
Too much red tape
Sikora leveraged the Ohio Land Title Association’s legislative committee and examined title cure statutes in all 50 states. The law, as it was written in Ohio, allowed parties to contest defects for up to 21 years. Among the other 49 states, the longest time allowed was only 10 years.
“It would make it so you couldn’t complete transactions unless you tracked down former parties to transactions and tried to get them to sign documents explaining what really happened or what they really intended,” Sikora says. “This would significantly delay these transactions.”
If there was litigation related to the real estate, it would often lead to even more litigation, more witnesses, more depositions and more expense to iron out all the related issues.
“A title cure statute allows you to cut through those things,” Sikora says. “It allows you to circumvent some of those steps by deeming some technical problems such low risk that they shouldn’t delay or hold up a transaction or prolong litigation.”
Sikora drafted a new statute by taking the best attributes of other states’ curative laws. He gained the backing of the Ohio Land Title Association in 2011.
Then he took the matter to the Ohio State Bar Association, first getting its Real Property Law Section Council on board, and then convincing the OSBA as a whole to take the lead advocacy role on the issue. The Ohio Association of Realtors also agreed to support the initiative.
Backed by this support, Senate Bill 257 was introduced to the Ohio Legislature in 2015 by Ohio Sens. Michael J. Skindell, a Lakewood Democrat, and Bill Seitz, a Green Township Republican who has since become a state representative. The bill passed at the end of last year, and was signed by Gov. John Kasich in January. It went into effect on April 6.
“Anyone who has a real estate deal may be affected, especially if there are any issues with the documents on that deal, which there just are sometimes, but there is no way of knowing without reviewing the title evidence,” Sikora says.
“Most significantly, it’s going to affect real estate developers and owners, lenders and title insurance companies, because the more volume and magnitude of real estate deals that you have, the more likely and more significantly you will be affected by this change in the law.
“This new change in the law is going to enhance your opportunity to get deals closed, especially if there are any title issues on that deal. Using this new statute wisely will minimize the risk of having problems in the future after the deal closes, whereas before you could have been stuck in litigation or faced some impairment of a valuable real estate asset.”
A streamlined process
So why did it take so long for this change to be made? Sikora says it all comes down to inertia.
“There’s a comical quote from a recent case where the judge said, ‘A good portion of why the Ohio Revised Code remains as it is is simply because of inertia. It is what it is until it’s enough of a problem,’” Sikora says.
“I was facing these issues from my clients all the time. But it’s only because my practice and my title agency were so focused. Most people that do this stuff would only encounter these issues often enough that they would be a nuisance. They weren’t dealing with it every day like I was for my clients. I was seeing these every day and every week.”
Sikora says those who use the statute wisely can either eliminate the need to track down former owners to obtain evidence of their intent or streamline their efforts to obtain that information.
“You end up needing less evidence or information to complete the transaction,” Sikora says. “Likewise, if you’re on a case and under the old statute, you would have had to track people down and obtain an affidavit from them or their deposition testimony. Now, you may be able to use the statute in your argument to the court to explain why you shouldn’t have to do that. Courts will now be much more receptive to that argument.” ●