Issues

Federal Issues

Tax Reform

On December 22, 2017, President Trump signed the “Tax Cuts and Jobs Act”.

All individual provisions of the measure are generally effective after December 31, 2017 for the 2018 tax filing year and expire on December 31, 2025 unless otherwise noted. The provisions do not affect tax filings for 2017 unless noted. To read NAR’s analysis of the bill’s provisions impacting real estate, please go to “The Tax Cuts and Jobs Act – What it Means for Homeowners and Real Estate Professionals.”

NAR will be providing ongoing updates and guidance to members in the coming weeks, as well as working with Congress and the Administration to address additional concerns through future legislation and rulemaking. Lawmakers have already signaled a desire to fine tune elements of The Tax Cuts and Jobs Act as well as address additional tax provisions not included in this legislation in 2018, and REALTORS® will need to continue to be engaged in the process.

More information on Tax Reform.

Flood Insurance

The National Flood Insurance Program (NFIP) provides up to $350,000 of flood insurance coverage where required for a federally backed mortgage in 22,000 communities nationwide. It also provides an alternative to taxpayer-funded disaster assistance, which averages $5,500 per household but more often means an SBA loan that must repaid with any underlying mortgage. While there is a growing market for private flood insurance, for many, the NFIP continues to be the primary source of asset protection against flooding, the most common and costly natural disaster in the United States.

More information on Flood Insurance.

Fannie/Freddie GSEs

Fannie Mae and Freddie Mac play a key role in the secondary mortgage market, which is crucial in providing capital for mortgage lending. During the housing finance sector’s collapse, private capital withdrew from having a significant, competing role with the GSEs. Without the government’s support of the GSEs and FHA-insured loans, which currently constitutes a large portion of the market space, there would be almost no capital available for mortgage lending. This would severely restrict, if not curtail, home sales and any supporting ancillary home sales services.

To learn more about NAR’s efforts at the federal level on behalf of the real estate industry, read NAR’s The Washington Report or see the full 2018 Advocacy Agenda which covers legislative and regulatory policy activities.

More information on GSEs.

Resources

  • US Congress 
    View session schedule, members of congress and current legislation
  • US Senate 
    View Senators, committees, session schedule and current legislation
  • US House 
    View House of Representative members, committees, session schedule and current legislation
  • Congressional District Maps
    A breakdown of Ohio’s Congressional Map (2012-2022)
  • US Housing and Urban Development 
    A listing of all federal housing programs available
  • Consumer Finance Protection Bureau 
    Aims to make financial markets work for consumers
  • FEMA Flood Mapping 
    Identifies flood hazards, assesses flood risks and partners with states and communities to provide accurate flood hazard and risk data to guide them to mitigation actions.

State Issues

Licensure of Home Inspectors

Background: Home inspection is one of the last unregulated real estate-related industries in Ohio. At least 30 states have some form of home inspector licensing or registration requirements, including Indiana, Kentucky, Pennsylvania and West Virginia.

Few Ohioans are aware that home inspectors are not licensed in our state. They mistakenly hire them under the impression they have received some level of training or validation that they are able to identify potential problems. Therefore, when an Ohio home inspector does not perform well, the buyer and seller are both harmed.

Ohio can be the 31st state to enact home inspector licensing to better protect home buyers and sellers whom we all represent and serve. This is why your Ohio REALTORS leadership had made passage of this legislation our top priority for 2018. Ohio REALTORS will be issuing Calls for Action on this issue in the future. It’s imperative that our members respond. Our legislators need to hear from you..Ohio’s REALTOR Community.

To learn more about our efforts at the state level on behalf of the real estate industry, go to the latest  Legislative Status Report where you can also view a status update of current legislation.

Resources

Local Issues

Lead Paint Inspection Ordinances

An ongoing issue for many of our local Associations is the recent wave of ordinances adopted or proposals targeting lead paint present in homes in many of their neighborhoods. Some studies indicate an increasing trend in lead poisoning among children in Ohio, forcing cities to reexamine their current practices to inspect and remediate homes with lead paint. In cities such as Toledo, ordinances were passed with little consideration of impact or pragmatically how to implement such an aggressive proposal impacting over 80,000 housing units.

Ohio REALTORS requested assistance through the National Association of REALTORS State and Local Issues Mobilization Support Program in preparing a model lead paint ordinance designed to address the issue in residential properties without severely impacting property rights and property values. The model identifies and defines the group of issues that should be addressed in any lead paint ordinance, including issues that were raised with Cleveland’s recent attempts to amend their Lead Hazards Ordinance to require that all residential rental dwellings undergo a lead risk assessment and be certified as Lead Safe.

The ordinance model is intended to incorporate best practices contained in other ordinances around the country, many of which have been in place for a number of years. By identifying which approach, or combination of approaches, are commonly used in local lead laws and, where evidence exists, which approaches have been effective in addressing the issue, we have crafted a defendable model.

Recently, Ohio REALTORS received the requested model ordinance. The model is intended for use by local Associations in discussions with their local governments that may propose to adopt a mandatory lead paint ordinance. For more information, contact our office.

Point of Sale Inspections

The federal district court for the southern district of Ohio ruled that the point of sale ordinance of the City of Oakwood is unconstitutional. Moreover, the court certified the case as a class action, paving the way for the refund of fees to hundreds of sellers who sold property in this Dayton suburb over a six-year period.

Under the Oakwood ordinance, it was unlawful for a property owner to transfer title or any equitable ownership of the property or change tenants without having an inspection conducted by the city. Upon completion of the inspection the city issued a “certificate of occupancy.” Without such a certificate the new owner or tenant could not legally occupy or use the property. The fee for the inspection was $60 and any owner who failed to comply with the inspection requirement or who occupied the premises without the certificate of occupancy was guilty of a minor misdemeanor.

In reaching its decision that the prior ordinance violated the Fourth amendment, the court relied on a 1967 U.S. Supreme Court case as well as a recent federal court case that struck down a Portsmouth, Ohio ordinance as unconstitutional. Relying on these prior decisions, the court in this case held that a municipality violates the Fourth Amendment when it requires a property owner to consent to a warrantless inspection of their property or face criminal penalty.

Finally, the court considered the plaintiff’s motion to have this case certified as a class action. In granting this motion, the court found that there are sufficient members of the class who share common issues of law and that requiring each potential plaintiff to file individual legal action would be cost prohibitive given the dollar amount of each claim.

So what does this decision mean for those communities that have pre-sale or point of sale or rental inspection ordinances? Are such ordinances all unconstitutional? The answer to that question is “not necessarily.” Whether an ordinance would be subject to a successful constitutional challenge depends upon the specific provisions of each ordinance. This ordinance, like the Portsmouth ordinance, was struck down for two reasons: (1) there were criminal sanctions for persons who failed to allow the inspections; and (2) the ordinance did not provide for an administrative warrant that assured that there was a judicial determination that probable cause existed to issue the warrant. Like Oakwood, many municipalities have amended their ordinances in recent years to provide for such a warrant process to avoid a constitutional challenge.

At this point it is not known if Oakwood will appeal the court’s ruling. Also, it should be pointed out that this decision is not binding on other jurisdictions outside the Southern District of Ohio, although this constitutes a strong precedent that could possibly be followed by other courts.

Already, some municipalities are considering moratoria on point of sale ordinances. We will keep you posted on the future developments in this case.