Good Funds Legislation for Ohio was signed into law on January 4, 2017, and will take effect April 6, 2017. This is a consumer protection statute designed to protect against fraud and to preserve the integrity of the consumer's funds that are held and dispersed in the real estate transaction.
This was not created for service providers or to provide maximum convenience to the parties involved with real estate transactions but to simply protect against fraud.
All transactions on or closing after April 6, 2017 will require title agents to enforce stricter controls over the handling of escrow and closing funds.
This revised law will require that all funds to be held for disbursement in real property transactions meet certain criteria regardless of whether they were received from or on behalf of the consumer or lender.
Those criteria include:
- If the funds are $1000 or less the may be in the form of personal checks, business checks, certified checks, cashiers checks, or money orders. These checks must be drawn on an existing account at a federally insured bank, savings and loan association or credit union. Money orders from convenience stores are not allowed nor payday loan checks.
- If the funds are drawn on a real estate broker's trust account, they may be in the form of a business check.
- Finally, if the funds are initiated by the US, state of Ohio, an agency or political subdivision of either, they may be in the form of a check or electronic ACH and must be deposited into the account of the agent. These funds must be immediately available for withdrawal by the agent prior to disbursement.
This is designed to protect against cyber fraud, which may occur using email compromise schemes. Wire instructions to and from customers must be done in a secure manner. Although not required, it is highly advisable that agents obtain a phone log at the onset of an order that can be used as a trusted source when communicating with clients or customers.
Any type of wire transfers should be confirmed directly with the customer prior to receiving or sending the funds. Agents and brokers should advise their clients not to accept any changes in writing instruction in the form of an email, letter, voicemail or any other form of communication without first contacting the agent's office at the trusted number. Agents and brokers should warn their clients of potential cyber fraud schemes reminding them to communicate solely with their agent on any type of wire transfers or fund disbursements.
This new law is designed to offer greater security in all types of real estate transactions, but they will require additional planning and preparation. There must also be coordination by all involved parties so that funds and communication can be delivered in a timely manner. [Source - Akron Cleveland Realtors.com]
As a certified Realtor® for the top-rated Columbus Realty Firm - Vision Realty, with 32 years of dedicated real estate experience, I can help buyers, sellers, investors, short sale sellers and more find, sell or invest in the right property, at the right price, at the right time. Contact me anytime for updates and information on the Columbus OH Real Estate market.
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Donald Payne - Vision Realty, Inc. |
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