Community Development Charges

Community development charges revisited

By James Zitesman, Attorney

The February 2005 edition of In Contract magazine featured an article written by Bill Clifford discussing Community Development Charge (CDC) - click here to view that article. As Bill wrote an excellent article, I will not attempt to re-iterate what he wrote.

The purpose of this article is to give a simple refresher of how to find the necessary information that REALTORS® need to have when listing properties subject to a CDC.

While Bill listed all the CDCs known at that time, the list is constantly growing. Therefore, do not rely on any list if the property in question is new within the last few years.

If the property was built prior to 1991 it is a safe bet that there is no CDC as the statute, ORC 349.07, was effective on January 10, 1991. If the property was built in the last 10 years it may be part of a CDC.

The information that is needed to satisfy statutory requirements for the contract is the county recorder's instrument number or volume and page reference.

Refer to the county auditor's website and look under Tax Information for the property. There may be a section called Special Assessment. If you see a listing there for an assessment with the word "Community" in it, there is probably a CDC. However, the specific information you need will most likely not appear on the auditor's website. So further investigation will need to be done.

Do not rely on not seeing information on the Auditor's site as conclusive as to the non-existence of a CDC. It will only show up on the Auditor's site once they start collecting the money. It is possible for a CDC to be on a property and not be active as to the collection of the money.

Ask to see the homeowner's title policy if they have it. The specific information should appear in an appendix. If it is not listed there, you may want to suggest starting the process with a title agency and having a title search performed. It will be needed for the closing, so this needs to be done anyway. The title search should find the CDC and provide the required information.

If the seller is the first owner of the house, ask to see the contract used to buy the home. If they bought from a developer there is a good chance the reference information will be in the contract. If not, try calling the developer. The municipality may also have the information.

The consequence for not providing the information is the contract is not enforceable. Of course, an omission has no affect on the enforceability and obligation to pay the CDC, the buyer will still be required to pay it.