Cuyahoga Metropolitan Housing Authority v. Watkins

• Decision Date: 19 November 1984
• Docket Number: No. 47961,47961
• Citation: 23 OBR 62,23 Ohio App.3d 20,491 N.E.2d 701
• Parties: , 23 O.B.R. 62 CUYAHOGA METROPOLITAN HOUSING AUTHORITY, Appellant, v. WATKINS, Appellee. *
• Court: Ohio Court of Appeals

Page 20

23 Ohio App.3d 20

491 N.E.2d 701, 23 O.B.R. 62

CUYAHOGA METROPOLITAN HOUSING AUTHORITY, Appellant, v. WATKINS, Appellee. ^*

No. 47961.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Nov. 19, 1984.

Syllabus by the Court

1. Pursuant to R.C. 5313.07, a forcible entry and detainer action will lie against a vendee of a land installment contract only if the vendee has paid less than twenty percent of the purchase price or paid in accordance with the terms of the contract for less than five years. Otherwise, the vendor may recover possession of his property only by use of proceedings for foreclosure and judicial sale pursuant to R.C. 2323.07.

2. The Homebuyers Ownership Opportunity Agreement promulgated by the United States Department of Housing and Urban Development under Section 904.121, Title 24, C.F.R., is to be construed as a land installment contract.

3. R.C. 5321.02 provides that reasonable attorney fees may be awarded if a landlord retaliates against a tenant by "bringing or threatening to bring an action for possession of the tenant's premises." A forcible entry and detainer action is an action for possession.

4. Notwithstanding a finding of retaliation, a landlord may, under the proper circumstances as provided in R.C. 5313.07, bring an action for forcible entry and detainer where the tenant or vendee is in default of rent.

5. The language of R.C. 5321.02(B) expressly conditions the award of attorney fees on a finding that the tenant suffered actual damages. (Jemo Associates v. Garman [1982], 70 Ohio St.2d 267, 436 N.E.2d 1353 , followed.)

Emanuella Groves, for appellant.

Steven L. Howland, Cleveland, for appellee.

JACKSON, Judge.

This is an appeal from an order of the Cleveland Municipal Court granting a directed verdict to defendant-appellee, Roselee Watkins, and against plaintiff-appellant Cuyahoga Metropolitan Housing Authority's (CMHA) action for forcible entry and detainer. The court found that the agreement between the parties was not a lease but rather a land installment contract. The vendor of a land installment contract may recover possession of his property only by use of a proceeding for foreclosure and judicial sale provided that the vendee has paid in accordance with the contract terms for five years or more or has paid a sum equal to or in excess of twenty percent of the purchase price. ¹ The court made that determination and dismissed the action.

Subsequent to the dismissal, the appellee filed an application for attorney fees. The court conducted a hearing on the application on December 9, 1983. At that time, the court held that the forcible entry and detainer action was "retaliatory" within the meaning of R.C. 5321.02 ² and awarded appellee attorney fees in the amount of $2,110. The judgment was journalized on December 21, 1983 and appellant CMHA timely assigns six errors for our review.

I

Appellant's first three assignments of error ³ address the issue of whether the agreement was a lease or a land installment contract.

The appellant argues that the court lacked the authority to construe the agreement as a land installment contract. Pursuant to R.C. 5313.07 ⁴ and under the conditions stated therein, however, a forcible entry and detainer action will not lie against a vendee of a land installment contract. The validity of the alleged "rental agreement" was immediately challenged by the appellee. Under these circumstances, the court had the authority to construe the agreement. The agreement is titled "Homebuyers Ownership Opportunity Agreement." As will become apparent, the provisions of this agreement establish rights in the appellee superior to that of a person merely using or occupying a residential premises.

The Homebuyers Ownership Opportunity Agreement program is implemented in accordance with procedural rules and regulations promulgated by the Department of Housing and Urban Development (HUD). The agreement is provided to CMHA from HUD and no modification may be made in format, context or text without HUD's approval. See Section 904.121, Title 24, C.F.R. Besides allowing an opportunity for "homebuyers" to become "homeowners," HUD ⁵ also provides for a training and counseling program, the purpose of which is to:

" * * * assure that the homebuyers, individually and collectively through their homebuyers association (HBA), will be more capable of dealing with situations with which they may be confronted, making decisions related to these situations, and understanding and accepting the responsibility and consequences that accompany those decisions." Section 904.201, Title 24, C.F.R.

The appellant CMHA argues that this agreement is merely a lease with an option to purchase. The Homebuyers Ownership Opportunity Agreement, taken as a whole, provides something quite different. Section 2 provides that:

" * * * the Homebuyer may achieve ownership of the home described in Part I by making the required monthly payments and providing maintenance and repairs to build up a credit [in his] * * * ('EHPA'). ⁶ While the Homebuyer is performing his obligations, the purchase price will be reduced in accordance with the Purchase Price Schedule, so that, while this purchase price is being reduced, the Homebuyer is increasing the amount of his EHPA. The Homebuyer may also make voluntary payments to his EHPA which will enable him to acquire ownership more quickly. The Homebuyer may take title to his Home when he is able to finance or pay in full the balance of the purchase price as shown on the Purchase Price Schedule plus the costs incidental to acquiring ownership, as provided in section 16 or 17, as applicable." (Emphasis added.) Therefore, the homebuyer's purchase price is reduced in accordance with a schedule. Section 16c of the agreement provides that the homebuyer may achieve ownership when the amount in his EHPA, plus such portion of the "nonroutine maintenance reserve" (NRMR) ⁷ as he wishes to use for the purchase, is equal to the purchase price as shown at that time on his purchase price schedule. Section 10d controls the exercise of the "option." The homebuyer may exercise his "option" to buy the home by paying the applicable purchase price pursuant to Section 16 and by performing three conditions precedent: (1) the homebuyer must have achieved a certain balance in his EHPA within the first two years; (2) he or she must have met the require of the agreement; and (3) he or she must have rendered satisfactory performance of his responsibilities to the Homebuyers Association (HBA). The agreement provides that until the homebuyer satisfies the conditions precedent set forth in Section 10d governing the exercise of her option to purchase the home for the applicable price, the homebuyer shall have the status of a lessee of CMHA.

Under the provisions of this agreement a homebuyer is able to accumulate a substantial equity toward the purchase of a home. However, upon termination of the agreement, though the homebuyer may have her EHPA credits returned to her, the homebuyer still loses the right to purchase the home. Moreover, the agreement runs for thirty years. The evidence discloses that appellee has lived in the home since 1970, and that the purchase price has been reduced according to schedule. ⁸

Appellant relies upon the provision in the agreement which states that the homebuyer shall have the status of a lessee of CMHA until he or she satisfies the conditions of Section 10d, to support its contention that the agreement is a lease with an option to purchase.

Ohio courts have defined the terms "lease" and "option" contracts as follows:

"A lease is a conveyance of an estate in real property for a limited term, with conditions attached, in consideration of rent." Jones v. Keck (1946), 79 Ohio App. 549, 552, 74 N.E.2d 644 .

"[Option contracts] are merely contracts by which one party in consideration of the payment of a certain sum to the other party, acquires the privilege of buying from or otherwise acquiring, or selling to such other party an interest in specified property, at a fixed price within a stated time." George Wiedemann Brewing Co. v. Maxwell (1908), 78 Ohio St. 54, 63, 84 N.E. 595.

The Ohio General Assembly has defined a land installment contract in R.C. 5313.01 as follows:

" 'Land installment contract' means an executory agreement which by its terms is not required to be fully performed by one or more of the parties to the agreement within one year of the date of the agreement and under which the vendor agrees to convey title in real property located in this state to the vendee and the vendee agrees to pay the purchase price in installment payments, while the vendor retains title to the property as security for the vendee's obligation. Option contracts for the purchase of real property are not land installment contracts." (Emphasis added.)

Upon comparison of provisions of the Homebuyers Ownership Opportunity Agreement with a "lease" and an "option contract" as defined above, it becomes apparent that the appellee's interest is greater than the mere use of a residential premises with the privilege of purchasing it. Furthermore, the statutory definition of land installment contract expressly excludes option contracts for the purchase of real property. On the other hand, however, such comparison of the provisions of the homebuyers agreement with the definition of a land installment contract discloses that it includes substantially the essential elements required for such a contract. Moreover, the title of the agreement, "Homebuyers Ownership Opportunity Agreement," is ambiguous on its face. In view of the fact that the lease was prepared by appellant, the maxim "ambiguitas contra stipulatorem est" applies, and the ambiguity or doubt in meaning or intent must be resolved against the appellant. Central Realty Co. v. Clutter (1980), 62 Ohio St.2d 411, 413, 406 N.E.2d 515 .

The trial court found that the agreement was a land installment...