03/18/26

The House Local Government Committee today adopted a substitute version of HB 493, continuing momentum on an OBL priority to reform the process of delinquent property tax certificate sales in Ohio. The as-introduced version of HB 493 aimed to sunset the practice of delinquent property tax certificate sales altogether. The new sub bill preserves an amendment added earlier this month that walked back the full sunset language and narrowed the scope to owner-occupied residential and agricultural parcels, while allowing sales to continue for other property types (including commercial and non-owner occupied residential). The substitute bill adopted today preserves the earlier amendment, but provides significant protections for lienholders that OBL has long advocated for.

Consent requirement and timing

Under the substitute language, sales (auction or negotiated) respecting a residential or agricultural parcel must be completed by December 31, 2026, unless the parcel owner consents. After that date, any such sale without parcel owner consent is void. Related “subsequent” tax certificate sales after January 1, 2027 for these parcels likewise require owner consent.

Lienholder protections—notice and right of first refusal

The sub bill adds significant protections for lienholders. Where a tax certificate is sold and there is an “eligible lienholder” (the lien immediately subordinate to the government’s tax lien before the sale to a third party), that lienholder initially retains the first priority lien after the sale unless and until two conditions occur: (1) the certificate holder sends certified mail notice of the certificate sale within 90 days and offers a right of first refusal to purchase the certificate for the certificate purchase price; and (2) the eligible lienholder declines or fails to exercise that right within 90 days of receiving notice. Only after both conditions are met does the certificate holder’s (third party) lien become first in priority.

Clarification: This lienholder notice and right of first refusal framework applies to any qualifying tax certificate sale under the bill; it is not contingent on whether the owner consented to a sale of a residential or agricultural parcel.

Why it matters for OBL Members

OBL has long raised concerns that third-party certificate buyers can impose high fees and leapfrog existing liens in foreclosure. By narrowing certificate sales for owner-occupied and agricultural parcels to owner-consented transactions after 2026 – and by hardwiring lienholder notice and a right of first refusal – the sub bill takes meaningful steps to preserve recoverable equity and protect secured creditors’ positions. OBL plans to support the bill at a future hearing and will remain engaged as HB 493 advances and will continue to advocate for clear, uniform notification practices across all certificate sales.