Former Point of Sale Ordinance in Oakwood, Ohio Held Unconstitutional

(Criminal Penalties and Lack of Warrant Procedure Held to be Key Failings of Ordinance)

By: Stephen D. Richman, Esq. - Senior Counsel- Kohrman, Jackson & Krantz



Municipalities are also subject to more and more United States constitutional challenges. Many of these cases deal with claims that local governments are taking private property for public use without "just compensation,” violating individual rights without “due process” and curtailing free speech in 
violation of the First Amendment.


Point of Sale Ordinances


Municipalities usually defend their point of sale ordinances as valuable tools to increase the value of properties within their borders, and ensure such properties and the residents occupying the same will be and remain safe. While these ordinances often contain a “criminal component”, municipalities rarely enforce the criminal penalties, but deem them necessary to cause compliance.


Background/Plaintiffs’ Claims in Thompson V. City of Oakwood

The pertinent facts of the case are as follows:



Specifically, the plaintiffs sought: 1) a declaratory judgment that Oakwood’s pre-sale inspection requirement was unconstitutional on its face; 2) an injunction against enforcement of the ordinance containing that requirement; and 3) restitution of the $60 fee that the plaintiffs paid pursuant to the ordinance. Approximately one week after the filing, the plaintiffs amended their complaint, seeking to constitute their action as a “class action suit” on behalf of a class of similarly situated individuals who sold real estate in Oakwood (during the prior six years) and were “coerced into paying pre-sale inspection fees.

Oakwood Codified Ordinance § 17-107.5

The ordinance at issue (Oakwood Codified Ordinance § 17-107.5) provided that, “it shall be unlawful for the owner of any real estate premises to transfer legal or equitable ownership of that premises, or change tenants, without having obtained a pre-sale inspection of it under this code.”  The ordinance further provided that upon completion of the inspection and other requirements, an owner could obtain a “certificate of occupancy”, which was necessary because, it was illegal, per the ordinance for a new owner or tenant to occupy any premises, “without having obtained from the code official or the previous owner a valid certificate of occupancy ...” In addition, under § 17-106.4 of the Oakwood Code, an owner who failed to comply with the pre-sale inspection or occupied a premises without having obtained a certificate of occupancy was guilty of a minor misdemeanor.

It is important to note that approximately two months after the plaintiffs’ action was filed, the City of Oakwood passed an emergency ordinance that repealed the then existing pre-sale inspection ordinance and replaced it with a new one. The new ordinance adds an administrative warrant procedure for residential and business inspections and clarifies that asserting rights under the Fourth Amendment will not trigger criminal penalties.

Defendant’s Arguments

Generally, Oakwood credited its point of sale ordinance with encouraging residents to maintain their homes, increasing home values and decreasing the number of fires and structural failures. The City of Oakwood also pointed out that: a) its property maintenance code contains an administrative appeal procedure for property owners to challenge any decision or order of a code official, and no Oakwood property owner (including plaintiffs), has filed an administrative appeal challenging the point of sale  ordinance; b) Oakwood has never denied a property owner an occupancy permit or cited a property owner for failure to comply with the pre-sale inspection requirement, and c) to its knowledge, no other owner has objected to the ordinance. The City of Oakwood did acknowledge, however that it has informed at least two property owners— (the plaintiffs) that failure to have a pre-sale inspection was a misdemeanor.

Specifically, the city argued that: 1) it was entitled to summary judgment on Plaintiffs’ § 1983 claims because its amended ordinance rendered moot, the plaintiffs’ claim; 2) it did not commit any constitutional violation because the plaintiffs consented (through their real estate agent) to the pre-sale inspection; 3) the plaintiffs relied on inadmissible evidence and failed to address the history of the pre-sale inspection ordinance; and 4) Oakwood’s code enforcement officer did not commit any constitutional violation and, even if he did, he would be entitled to qualified immunity.

The Court’s Analysis in Thompson V. City of Oakwood

Before analyzing the crux of the case, the court in Thompson agreed with the defendant’s argument that the amended ordinance rendered the plaintiffs’ injunction claims, moot. As stated by the court, “Since Oakwood’s amended ordinance provided Plaintiffs the injunctive relief they sought; as a result, that portion of Plaintiffs’ claims is indeed moot. Their claims for actual and nominal damages relating to the prior ordinance, however, are not.”


--the 4th Amendment (General Rule)-The Fourth Amendment of the U.S. Constitution provides that “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” U.S. Const. amend. IV. The basic purpose of the Fourth Amendment . . . is to “safeguard the privacy and security of individuals against arbitrary invasions by government officials.“ Camara v. Mun. Court, 387 U.S. 523, 527 (1967). The U.S. Supreme Court has repeatedly held that “searches conducted outside the judicial process, without prior approval by a judge or a magistrate judge [e.g., via a warrant], are per se unreasonable subject only to a few specifically established and well-delineated exceptions.




---Consent Exception-If your distant memory of 11th grade history or Con Law is telling you, “wait a second, I remember there being a number of instances or exceptions where a warrant is not necessary, where a warrantless search or seizure would still be considered “reasonable” and not run afoul of the Fourth Amendment”, you would be correct. “Plain view”, “search incident to a lawful arrest”, “exigent circumstances” and “consent” are some of the more common “warrant exceptions.” 

The defendant and its counsel in Thompson were certainly aware of the consent exception, and used it to justify their argument for summary judgement in their favor (recall the plaintiffs’ real estate agent consented to the inspection of the plaintiffs’ property; the agent just asked it not include a search of the garage).




The City of Oakwood argued that the ordinance’s criminal penalty was not coercive because Oakwood never enforced it against any property owner and that, “if Oakwood homeowners had objected to the inspection, the inspection would not occur, and any potential defects would simply transfer to the buyer.


--Holding of Thompson V. City of Oakwood-Specifically, the court in Thompson ruled as follows: “1. Plaintiffs are granted summary judgment as to liability on their (a) § 1983 claim under the Fourth Amendment against Oakwood only, (b) § 1983 claim under the unconstitutional conditions doctrine against Oakwood only, and (c) unjust enrichment/restitution claim against Oakwood; 2. Mr. Kroger is granted summary judgment in his favor as he is entitled to qualified immunity on both of Plaintiffs’ § 1983 claims; and 3. The Court certifies the following class under Fed. R. Civ. P. 23(b)(3): All individuals and businesses that have (1) sold houses within the City of Oakwood since May 25, 2010; and (2) paid pre-sale inspection fees to the City of Oakwood in conjunction with the sale of their houses.

Moral of the Story



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