What’s New in the Title Industry
Stay up to date on industry news and changes!
**UPDATE TO OHIO’S GOOD FUNDS LAW**
Ohio’s “Good Funds” statute has once again been modified. The following changes become effective for all escrow/closings conducted on or after September 29, 2017.
- Personal, business or cashier’s checks (other than those drawn on a Real Estate Broker’s Trust Account); money orders; and/or, cash totaling $10,000 in aggregate, are considered “good funds” (up from $1,000).
- Any Electronically transferred funds are considered “good funds” (now includes internal transfers between accounts held by the same bank).
Remaining unchanged is the exempt status granted to checks drawn on a Real Estate Broker’s Trust Accounts. However, under ORC Sections 4735.18 and 4735.24, funds deposited in such accounts in connection with a purchase agreement are intended to be limited to earnest money funds. As such, it is not a recommended practice to accept significant payments drawn on such accounts as an avoidance of the rules specified above.
As always, please feel free to contact our office with any questions!
Changes to Ohio’s Good Funds Law
On January 4, 2017, Governor Kasich signed into law Sub. H.B. 463 which included changes to Ohio’s Good Funds Law and what constitutes “good funds.” (O.R.C. 1349.21) This law will go into effect on April 6, 2017.
The following is a summary of what will be considered good funds under these revisions (O.R.C. 1349.21(B)):
- Business checks drawn on special or trust accounts of a real estate broker;
- Cash, personal checks, business checks other than those described in item (1) above, certified checks, cashier’s checks, official checks, or money orders, as long as:
- Such items, by themselves and in aggregate, cannot exceed $1,000; and,
- Instruments must be drawn on an existing account at a federally insured bank, savings and loan association, credit union or savings bank.
- Electronic transfer of funds through the automated clearing house (ACH) system initiated by, or checks issued by, the United States or the State of Ohio, or an agency, instrumentality or political subdivision of the Untied States or Ohio; and,
- Electronic transfer of funds through the Federal Reserve System.
A few things to note:
- Not only can none of the above items by themselves exceed $1,000, but the total of the same cannot exceed $1,000. For example, if the purchaser needs to bring $8,100 to closing, and does so in the form of nine cashier’s checks, each in the amount of $900, they would not be considered good funds even though each cashier’s check, standing alone, would be good funds;
- Business checks drawn on special or trust accounts of a real estate broker are NOT subject to the $1,000 cap; and
- All of the instruments listed must be drawn on one of the financial institutions referenced. A money order issued by a convenience store or a credit card company, such as American Express, would not be considered good funds. However, a money order issued by the United States Postal Service (USPS) would qualify as good funds as the USPS is considered an agency or instrumentality of the United States.
Items that will no longer be considered good funds are:
- Checks drawn on the trust account of an attorney or law firm; and,
- Checks drawn on the trust or escrow account of a title agency or title company
Although the law is not in effect until April 6th, Partners Land Title Agency will begin implementing this change as of March 1, 2017. If you have any questions regarding this information, please do not hesitate to contact us. We will be more than happy to help!
Cyber Crime Awareness
Take a look at the following video on cyber-crime awareness from Old Republic Title!