Tuesday, May 13, 2008

Another law to protect us from our own ignorance

Toledo's new land contract law takes effect today. And it's another example of government deciding to create a law to protect us from our own ignorance.

You see, our government officials believe that individuals who purchase a home under land contract are stupid, so they really don't know what they're doing when they make such a decision.

Councilman Joe McNamara, who sponsored the ordinance, said the law would protect unsuspecting buyers.

"It's a very bad situation when unscrupulous businesses take advantage of people, take advantage of poor people," Mr. McNamara said.

How condescending! According to this quote, McNamara thinks that only poor people get taken advantage of...

Any home buyer in Ohio can pay for a home to be inspected. But that's not good enough for Toledo politicians. Since some buyers don't take advantage of the ability to have a home inspected, that responsibility now falls the seller of the property, under penalty of law. Additionally, if an inspection shows problems, all the problems must be fixed prior to the closing.

While there is a provision for 'fixer-uppers,' there are only six months to make improvements, which might not be feasible especially in this economy. And you know how many home sales this applies to? Last year, it was 311 or 1.6% of all homes sold in Toledo.

As is usual in Toledo, the city doesn't have the required list of inspectors ready to go...

This is certainly not business friendly. At a time when home sales are in a slump, the City of Toledo just made it more difficult and more costly to sell a home - all to 'protect' its citizens from their own failure to make an informed decision about a major purchase.

I guess in today's nanny state, caveat emptor is no longer applicable and the government will protect us from ever making a mistake - and then will bail us out if we do.

3 comments:

-Sepp said...

What they have done is killed any chance for anyone to buy a "fixer-upper" unless they pay cash or, qualify for a loan.
Anyone buying on land contract knows up front that the property needs work upfront.

So if I should decide to sell my house at the lower "u-fix-it" price and the city steps in and forces me to repair everything first...why would consider a lower price?
It seems to me that the main theme in this law are the fees the city charges for the inspection of properties. It would be much different if the city was offering the poor low or, no interest loans to bolster home ownership and then requiring an inspection.

I'm thinking that all this law will accomplish is less land contract sales or, "underground" land contracts.
Just 1 more reason to avoid any dealings within the city limits.

Tim Higgins said...

Maggie,

Caveat emptor indeed. It appears that we are once again to have our freedoms of choice limited by our government rather than our good sense. And with no approved list of inspectors, such enforcement will inevitably fall on city inspectors, making it a more expensive and time consuming process. But that's OK right, since the housing market in NW Ohio is so robust.

Perhaps instead of "Let the buyer beware", we should say instead:
"omins caveat gubernationis" (Let all beware of government).

Ttown Rick said...

I couldn't agree with your article more! You were right, buyers already had the option to pay for a home inspection prior to closing on the property. Better yet, why not utilize the services of a full time licensed Realtor? I have been agent for almost 15 years now and we have the fiducary responsibility (legal term to show care, obedience, loyalty & exercise due deligence as well as to disclose any material facts we know about the property or the area)to look out for our clients. With the aid of a qualified representative, which there are plenty available, this law is not necessary. This is just one more road block for decent, hard working entrepreneurs not to invest in the city. Good job Joe, Carty & anyone else who supported this bill!!

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