If you live in a private community setting (whether it is a condominium, townhouse, or single-family home) in Ohio, usually you must pay dues and assessments to a homeowners’ association (HOA) or a condominium association (COA). If you fall behind in payments, in most cases the HOA or COA can get a lien on your home that could lead to a foreclosure.
Read on to learn about the particular requirements for HOA and COA foreclosures in Ohio.
In Ohio, Title 53, Chapter 5312 (the “Ohio Planned Community Law”) of the state statutes governs HOA activities, while Title 53, Chapter 5311 applies to condominiums. The two sets of laws are very similar.
Most HOAs and COAs have the power to place a lien on your home if you become delinquent in paying the monthly dues and/or any special assessments (collectively referred to as assessments).
In Ohio, an HOA or COA is entitled to a lien for unpaid assessments and related charges once the amount due is ten days late (Ohio Rev. Code Ann. § 5312.12(A), § 5311.18(A)(1)). The lien becomes effective when the HOA or COA records a certificate of lien in the county records (Ohio Rev. Code Ann. § 5312.12(B)(1), § 5311.18(3)).
Lien priority determines what happens to other liens, mortgages, and lines of credit if your HOA or COA lien is foreclosed. (To learn more about lien priority and its importance in HOA foreclosures, see What happens to my mortgages if the HOA forecloses on its lien?)
In Ohio, an HOA lien or COA lien has priority over liens that were recorded on a later date, except for:
State law and the HOA or COA’s governing documents, such as the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws, will often set out the type of charges that may be included in the lien. In Ohio, an HOA or COA is permitted to include the following in its lien (unless the governing documents provide otherwise):
If a homeowner or condo owner believes that an HOA or COA lien is improper, he or she can file a lawsuit asking a court to discharge the lien. If the owner prevails in the case, all or part of the lien will be discharged and the court will award attorney's fees to the owner (Ohio Rev. Code Ann. § 5312.12(D), § 5311.18(C)).
If you default on the assessments, the HOA or COA can foreclose. A common misconception is that the association cannot foreclose if you are current with your mortgage payments. However, the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments. (Learn more about HOA liens and foreclosure.)
In Ohio, an HOA or COA may foreclose its lien in the same way that a mortgage on real property is foreclosed (Ohio Rev. Code Ann. § 5312.12(B)(4), § 5311.18(B)(1)). This means the association will file a lawsuit to begin the foreclosure. (Learn more about general foreclosure laws and procedures in Ohio.)
An HOA or COA must initiate the foreclosure within five years after the lien is recorded otherwise the lien is invalid (Ohio Rev. Code Ann. § 5312.12(B)(3), § 5311.18(A)(4)). This is called the statute of limitations.
If you are facing an HOA or COA foreclosure, you should consult with an attorney licensed in Ohio to discuss all legal options available in your particular circumstances. (See our HOA Foreclosure topic page for articles on HOAs, possible options to catch up if you are delinquent in payments, how bankruptcy can help discharge dues, HOA super liens, and more.)