The Good Funds Law went into effect on April 6, 2017 amending Section 1349.21 of the Ohio Revised Code to require stricter controls for all residential real estate transactions involving the sale, purchase, or refinance of such real estate. The law was passed as an attempt to combat and thwart fraudulent activities associated with the closings of such residential real estate transactions. While the Good Funds Law only applies to residential real estate, some title companies have elected to also apply the law to commercial real estate transactions. The law applies to buyers, sellers, and lenders.
The basic purpose of the law is to eliminate the use of checks and instead to require, with limited exceptions, the transfer of funds to purchase the property at closing to the title company by electronic transfer. While the law initially required that any funds for more than $1,000.00 be electronically wired to the title company prior to the closing, the Ohio legislature has increased this amount to be effective on September 29, 2017 from $1,000.00 to $10,000.00. Cash, personal checks, certified checks, official checks, or money orders are still acceptable for expenses up to $1,000.00 or $10,000.00 (after September 29, 2017). This threshold …