If you live in a planned development, you’re probably part of a homeowners' association (HOA) or condominium owners’ association (COA). The HOA or COA is typically a nonprofit corporation responsible for managing and maintaining the community. The association has a lot of power over the residences and homeowners in a planned community. It creates and enforces the rules of the community. The association also determines how much members have to pay in dues and assessments (collectively referred to as “assessments”).
Residents who live in this kind of a community setting—whether it’s a condominium, townhouse, or single-family home—in Ohio usually have to pay assessments to their HOA or COA. If you fall behind in those 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 HOA and COA foreclosures and related laws in Ohio.
In Ohio, Title 53, Chapter 5312 (the “Ohio Planned Community Law”) of the state statutes governs HOA activities. Title 53, Chapter 5311 applies to condominiums. These sets of laws are very similar.
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)).
State law and the HOA or COA’s governing documents, like the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws, will usually 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:
Lien priority determines what happens to other liens, mortgages, and lines of credit if an HOA or COA lien is foreclosed. (To learn more about lien priority and 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:
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)).
Once the HOA or COA has a lien on your property, the HOA or COA may foreclose. A common misconception is that the association can’t foreclose if you’re up to date with your mortgage payments. But the association’s right to foreclose has nothing to do with whether you’re current on your mortgage payments.
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)).
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)).
If you’re behind in assessments and facing an HOA or COA foreclosure in Ohio, consider consulting with a local attorney to discuss all legal options available in your particular circumstances.