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Commercial Real Estate Investment/Commercial property sold as residential


In Ohio, we purchased a home 4 years ago, listed as "residential" (on the(appraisal and county parcel card). However, the city and county tax map list it as C3 property! Now our FHA pre-approved buyer can't buy the home because it was zone commercial in the 1970's--we had no idea it was in fact commercial property at time of purchase.  Questions: (1)Is the title insurance company liable for not catching this listing of commercial both with the city and county tax map listing? Or are they in the clear because it listed residential on the parcel card and commercial on the tax map? (2)Is it legal to sell a C3 property as residential property if it was vacant for 2.5 years prior to the sale?? I heard no but can't find the Ohio/federal law regarding this. Please help! Thank you.


Thanks for your question. For starters, I'm located in Canada, near Toronto. I'm sure your laws vary from state to state.

Here in our area, a house can be sold as a residential home, even if its in a commercial area.

It wouldn't work the other way around... if it was residential, it couldn't be commercial because of how the hierarchy works.. a residence can exist in a commercial area, but commercial would not be permitted in a residential zone.

There are some exceptions... a "grandfather clause" for instance.. if there was a guy mending shoes for instance for years and years, and the area around him changed to residential, he could still maintain his commercial designation as long as the use does not change.. but if someone bought that house as a house, it would become residential like the rest of the area around it.

thats the real estate perspective.

the "liability" perspective is a legal question. you would have to ask a lawyer familiar with Ohio property law.

best, Phil

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Phil Nicols


Legal issues which are specific from state to state.


Licensed Realtor since 1987, Broker Since 1991. Ontario Canada real estate -- Commercial, investment, leasing, business brokerage

Stockwell Realty Corporation


Real Estate Council of Ontario, Registered under the real estate and business brokers act 2002

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A few from past organizations I belong to. Now with my own company, it's hard for me to give myself awards.

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Dealt with both small as well as regional tenants, individual investors to syndications.

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