The online versions of legislation provided on this website are not official. Enrolled bills are the final version passed by the Ohio General Assembly and presented to the Governor for signature. The official version of acts signed by the Governor are available from the Secretary of State's Office in the Continental Plaza, 180 East Broad St., Columbus.
H. B. No. 201 As IntroducedAs Introduced
|130th General Assembly|
Representatives Adams, J., Terhar, Thompson, Hayes
To amend section 5301.36 and to enact section
5301.234 of the Revised Code to make changes
relative to mortgage subrogation and entries of
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5301.36 be amended and section
5301.234 of the Revised Code be enacted to read as follows:
Sec. 5301.234. (A) A mortgage encumbering real property
granted to secure funds that are used to satisfy a prior mortgage
or lien on the real property shall be subrogated to the priority
of the prior mortgage or lien that was satisfied, to the extent of
the amount satisfied, if both of the following apply:
(1) The parties to the mortgage granted to secure funds that
are used to satisfy a prior mortgage or lien intend that mortgage
to have the priority of the satisfied mortgage or lien.
(2) At the time the holder of a subordinate mortgage or lien
received its interest, the holder expected the interest to be
junior to the satisfied mortgage or lien.
(B) A mortgagee seeking to be subrogated pursuant to division
(A) of this section shall not be denied subrogation for the
priority of the satisfied mortgage or lien for any of the
(1) The mortgagee is engaged in the business of lending.
(2) The mortgagee had actual knowledge or constructive notice
of a mortgage or lien over which the mortgagee would gain priority
(3) The mortgagee committed a mistake or was negligent or a
third party committed a mistake or was negligent.
(4) The lien for which the mortgagee seeks to be subrogated
(5) The mortgagee obtained a title insurance policy.
(C) Notwithstanding the application of division (A) of this
section, the holder of a subordinate mortgage or lien shall retain
the same subordinate position that the holder would have had if
the prior mortgage or lien had not been satisfied.
Sec. 5301.36. (A) Except in a county in which the county
recorder has elected to require that all satisfactions of
mortgages be recorded by separate instrument as allowed under
section 5301.28 of the Revised Code, when recording a mortgage,
county recorders shall leave space on the margin of the record for
the entry of satisfaction, and record therein the satisfaction
made on the mortgage, or permit the owner of the claim secured by
the mortgage to enter such satisfaction. Such record shall have
the same effect as the record of a release of the mortgage.
(B) Within ninety days from the date of the satisfaction of a
residential mortgage, the mortgagee shall record a release of the
mortgage evidencing the fact of the
its satisfaction in the
appropriate county recorder's office and pay any fees required for
the recording. The mortgagee may, by contract with the mortgagor,
recover the cost of the fees required for the recording of the
satisfaction by the county recorder.
(C) If the mortgagee fails to comply with division (B) of
this section, the mortgagor may recover, in a civil action,
of two hundred up to fifty dollars for each day of
noncompliance and reasonable attorneys' fees and costs incurred in
such an action or otherwise to obtain the recording of a
satisfaction of mortgage. This division does not preclude or
affect any other legal remedies or damages that may be available
to the mortgagor.
(D) As used in this section
, "residential mortgage" means an
obligation to pay a sum of money evidenced by a note and secured
by a lien upon:
(1) "Mortgagee" includes the original mortgagee or any
successor to or assignee of the original mortgagee.
(2) "Mortgagor" includes the original mortgagor and any
successor to the interest of the original mortgagor in the real
property located within this state
containing two or fewer
residential units or on which two or fewer residential units are
to be constructed and shall include such an obligation on a
residential condominium or cooperative unit.
(3) "Satisfaction" means that the obligation secured by a
mortgage has been paid in full and the underlying obligation
terminated, with no opportunities for future advancements.
Section 2. That existing section 5301.36 of the Revised Code
is hereby repealed.
Section 3. With respect to an unreleased mortgage that has
been satisfied, but not recorded, prior to the effective date of
this act, the mortgagor shall provide the mortgagee written
notice, addressed to the last address of public record for the
mortgagee, of the failure to enter the release of the mortgage of
record. The mortgagee shall have sixty days from the delivery of
the notice to record the satisfaction and release of the mortgage
in the appropriate county recorder's office. The mortgagee shall
pay any fees required for the recording within one hundred eighty
days after the effective date of this act. A mortgagor may
institute an action and recover damages under division (C) of
section 5301.36 of the Revised Code as amended by this act.