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Bill with development tax credit and key reforms to Ohio's Commercial Broker Lien Law heads to Governor

Dec 10, 2020

By Beth Wanless, Ohio REALTORS Director of Government Affairs

Ohio REALTORS-backed legislation to make needed reforms to Ohio’s Commercial Broker Lien Law, as well as encourage major development projects across the state, passed the Ohio legislature on Dec. 9. Senate Bill 39, which was introduced by Sen. Kirk Schuring, of Canton, had bipartisan support as being a critically necessary economic development driver. The bill is on its way to Gov. Mike DeWine for his signature.

To encourage growth, the legislation provides for a capped tax credit to assist in the completion of “Transformational Mixed Use Developments” (TMUD). A TMUD project may include the construction of new buildings or the redevelopment, rehabilitation, expansion, or other improvement of vacant buildings or structures. These TMUDs must satisfy certain requirements and have the potential to have a significant economic impact on the project site and surrounding communities. In order to be approved for the tax credit, several aspects of the project must be taken into consideration, including the “architecture, location, accessibility to pedestrians, retail entertainment and dining, job creation, property values, connectivity, and revenue from sales, income, lodging, and property taxes.” The tax credit program will sunset after fiscal year 2023. 

Additionally, Senate Bill 39 updates Ohio’s Commercial Broker Lien Law, which was championed by Ohio REALTORS several years ago. These reforms include giving brokers more time to carry out certain filing requirements in the lien dispute process and expands document delivery options for more flexibility. 

Most importantly, the bill will require the non-prevailing party in a lien dispute to pay all costs and attorneys’ fees of the prevailing party, including any litigation costs and any prejudgment interest. This has been particularly important as a growing number of commercial brokers have been forced to file liens to collect commissions owed to them. During the court process, brokers have been saddled with tens of thousands of dollars in attorneys’ fees, even after prevailing in the lien dispute. This change will put “teeth” in the already strong law and hopefully strengthen it as a tool for Ohio’s commercial REALTORS.

Ohio REALTORS is grateful to Sen. Schuring, sponsor of SB 39 for his hard work and steadfast dedication on such an important piece of legislation. Further, we thank the House and Senate for quick, bipartisan passage of the bill. Not only will many commercial REALTORS across Ohio benefit greatly from SB 39, but during a time where commercial real estate has faced so many challenges, this will be a much needed boon to the industry and Ohio’s economy as it promises to create jobs and generate tax revenue.

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