Ohio HOA and COA Foreclosures

If you fail to pay your HOA or COA assessments in Ohio, the association can get a lien on your property and might foreclose on your home.

By , Attorney · University of Denver Sturm College of Law

In Ohio, if your home is part of a homeowners' association (HOA) or condominium owners' association (COA) and you fall behind in assessments:

  • The HOA or COA can usually get a lien on your home.
  • The association typically can charge you for overdue assessments, interest, fines, various fees, and collection costs.
  • The association might choose to foreclose its lien.
  • Lien priority determines what happens to other liens, like a mortgage, if an HOA or COA lien is foreclosed.

If the HOA or COA initiates a foreclosure, you might have a defense to the action, such as the association charged you too much, imposed unreasonable fees, or failed to follow state laws.

Or you might be able to negotiate a way to get caught up on the overdue amounts and save your home. For example, you might be able to pay off the entire delinquency, negotiate a reduced payoff amount, or enter into a payment plan.

How HOA and COA Assessments Generally Work

When you buy a single-family home, townhome, or condominium in a planned community with covenants, you'll most likely pay fees and assessments, often collectively called "assessments," to an HOA or COA. If you fall behind in the assessments, the association will likely initially try to collect the debt using traditional methods. For instance, the association will probably call you and send letters.

But if those tactics don't get you to pay up, the association might try other ways to collect from you. The association could take away your privileges to use the common facilities or file a lawsuit for a money judgment against you.

Based on the association's Declaration of Covenants, Conditions, and Restrictions (CC&Rs) or Declaration of Condominium and state law, most HOAs and COAs also have the power to get a lien on your property if you become delinquent in assessments. Once you fall behind in payments, a lien will usually automatically attach to your property. Sometimes, the association will record its lien with the county recorder to provide public notice that the lien exists, regardless of whether state law requires recording.

An assessments lien clouds the title to the property, hindering your ability to sell or refinance the home. In addition, the property can also be foreclosed to force a sale to a new owner—even if the property has a mortgage.

HOA and COA Liens in Ohio

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)).

Charges an HOA or COA May Include in a Lien

In Ohio, an HOA or COA is permitted to include the following in its lien unless the governing documents provide otherwise:

  • past-due assessments
  • late fees
  • enforcement assessments (such as fines for violating the CC&Rs)
  • collection costs
  • attorneys' fees
  • paralegal fees, and
  • interest. (Ohio Rev. Code Ann. § 5312.12(A), § 5311.18(A)(1)).

Getting an Improper Lien Discharged

If a homeowner or condo owner believes that an HOA or COA lien is improper, the owner may 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 attorneys' fees to the owner. (Ohio Rev. Code Ann. § 5312.12(D), § 5311.18(C)).

HOA and COA Lien Foreclosures in Ohio

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)).

Statute of Limitations

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)).

HOA and COA Liens and Your Mortgage

A common misconception is that the association can't foreclose if you're current with your mortgage payments. But an association's right to foreclose isn't dependent on whether you're up to date on your mortgage. Instead, lien priority determines what happens in a foreclosure.

What Is Lien Priority?

The priority of liens establishes who gets paid first following a foreclosure sale and often determines whether a lienholder will get paid at all. Liens generally follow the "first in time, first in right" rule, which says that whichever lien is recorded first in the land records has higher priority than later recorded liens. A first lien has a higher priority than other liens and gets the first crack at the foreclosure sale proceeds.

If any proceeds are left after the first lien is paid in full, the excess proceeds go to the second lienholder until that lien is paid off, and so on. A lien with a low priority might get nothing from a foreclosure sale.

But state law or an association's governing documents can adjust lien priority.

HOA and COA Lien Priority in Ohio

In Ohio, an HOA lien or COA lien has priority over liens that were recorded on a later date, except for:

  • liens for real estate taxes
  • assessments of political subdivisions, like a municipal corporation, township, county, school district, or other local governmental entity, and
  • a first mortgage lien that was recorded prior to the recording of the assessments lien (HOA liens) or first mortgage liens that have been filed for record (COA liens). (Ohio Rev. Code Ann. § 5312.12(B)(4), § 5311.18(B)(1)).

So, a foreclosure by an HOA or COA usually won't eliminate a first mortgage because the association's lien is normally lower in priority.

Talk to a Lawyer If You're Facing an HOA or COA Foreclosure

If you're facing an HOA or COA foreclosure in Ohio, consider consulting with a foreclosure attorney to discuss all legal options available in your particular circumstances.

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