OAIT

Ohio Association of Independent Title Agents

May 17, 2010

VIA OVERNIGHT MAIL

The Honorable Senator Bill Seitz
Senate Judiciary - Civil Justice Committee
Senate Building
1 Capitol Square, First Floor
Columbus, Ohio 43215

Re: HB 292 to Prohibit Transfer Fee Covenants

Post-Stakeholder Meeting Follow-Up

Dear Senator Seitz:

On behalf of the Ohio Association of Independent Title Agents (OAITA) and its
members, I wish to personally thank you and your staff for coordinating the interested
stakeholder meeting regarding HB 292 and inviting Robert Franco and me to attend and
participate in the session. I wanted to take this additional opportunity to highlight a few
issues that our organization has considered in light of the exchange of dialogue had on
May 13th.

The OAITA represents the concerns of independently-owned and operated title

insurance agencies and title abstractors who are the settlement businesses that serve on
the front lines of the tens of thousands of real estate transactions that are transacted each
year in Ohio. Ours is the only organization in Ohio that was formed specifically for and
governed solely by title insurance agents and title abstractors.

Because OAITA is singularly dedicated to the concerns of its independently-

owned and operated title insurance agent and abstractor constituency, it is uniquely
positioned to represent the last point between the homeowners or borrowers and the
conclusion of their real estate transaction. Of those constituencies represented during the
stakeholder meeting, it is ours that would bear the greatest burden if H.B. 292 were not
passed. However, that burden is still less than the burden that would be imposed upon
Ohio's real estate consumers in the event H.B. 292 does not pass.

It is more than just a simple anecdote to point out that Ohio real estate consumers
lack a meaningful understanding of Mr. Alderman's proposal. Compounding matters
further is the fact that as each successive transaction occurs over the next 99 years,

216 Bradenton Avenue, Dublin, OH 43017

www.oaita.org (216) 373-2800
2 Letter to Senator Bill Seitz
May 14, 2010

Freehold Capital would have no privity of contract with those responsible for paying their
fee. Buyers would not be negotiating with Freehold to agree to the covenant. Instead,
the private transfer fee covenants are couched within a conveyance deed springing only at
the moment of sale between buyer and seller and having little, if any, relationship to the
real estate being transferred. The real estate that is burdened with these covenants will
continue to reward the developer when the act of development will have long-since
passed.

Once private transfer fee covenants are accepted in one form (i.e. for private
developers), the floodgates to obtaining the same transfer fee covenants for other forms
(i.e., contractors, homebuilders, investors, etc.) will be opened for all who see Mr.
Alderman's Freehold Capital program as a panacea for the market realities of today's
economy. Unless these transfer fee covenants are prohibited today, Ohio's title records
will become the future collection bin for dubious fees and charges which, in turn, will
have severe impacts upon the free alienation of real property.

The Ohio Association of Independent Title Agents (OAITA) joins with the Ohio
State Bar Association, the Ohio Bankers League, and the Ohio Land Title Association in
supporting passage of H.B. 292. If you have any additional questions or comments,
please feel free to contact me.

RBH/rbh

Cc: OAITA Trustees