Community Association Fundamentals in the Buckeye State
Homeowners associations are based upon a simple idea: if all homeowners in a neighborhood chip in toward a common budget and abide by certain rules, the community’s overall standard of living will improve and property values will be secure. Now, we’ve all heard horror stories about overzealous board-members making life difficult for other homeowners, but, fortunately, most associations run fairly well and really do benefit the neighborhood.
Of course, no association is perfect. But, if problems arise, state HOA laws provide important legal protections for homeowners. And the democratic character of community associations ensures that every member gets the opportunity to have a say as long as he or she takes the time to participate.
Where do HOA’s Get their Authority?
An HOA or condo association derives its power from its governing documents, including a declaration and bylaws recorded in the county land records, and from state statutes authorizing community associations. In Ohio, homeowners and condominium associations are authorized by the Ohio Planned Community Law and Condominium Law, enacted as Chapters 5312 and 5311 of the Ohio Code, respectively. The two statutes are similar in their overall framework, though the condo statute goes into greater detail as to association powers and restrictions. Ohio HOA’s are afforded considerable flexibility, but if there is ever a conflict between an HOA’s declaration or bylaws and state law, the statute takes precedence.
What Does an HOA Do?
A homeowners association’s primary functions are to maintain common areas within the community and enforce restrictions and covenants. Common areas (or “common elements” in the statute) are the property within a development that is collectively owned by all homeowners through the association. Common elements might include private roads, a community pool, playground, or other recreational facilities, or - in the case of a condo association - the portions of the building that are not part of any particular owner’s unit, like the roof, elevator, or lobby. Keeping common elements in good repair and safe condition is in the interest of all homeowners and is one of every association’s most vital jobs.
HOA’s are also responsible for enforcing community covenants and restrictions - the shared rules all members of the community must abide by. Covenants and restrictions (sometimes just called “covenants”) are designed to maintain high property values by preserving a development’s aesthetic appeal and promoting a generally pleasant atmosphere and good quality of life for members. For example, an association might prohibit members from making excessive noise, thereby protecting neighbors from potential nuisances. If an owner violates a covenant, an association usually provides a warning notice and, if the problem persists, can file a lawsuit against the owner seeking compliance through a court order.
When an HOA acts, including filing or defending against a lawsuit, it acts through its board of directors and officers. Ohio’s HOA law requires election of board-members by homeowners under terms established in the declaration. O.R.C. §5312.02(B). In turn, the board appoints officers (e.g., president, treasurer, etc.) from among the elected board-members. O.R.C. §5312.04(A). Along with establishing the election process, the declaration and bylaws set forth the number of board-members, how long they serve, and the board’s general powers and duties. Board-members and officers are usually volunteers, though compensation can be provided if permitted by the declaration and approved by the board.
Things to Consider When Purchasing a Home in an HOA Community.
Before purchasing a home that’s part of a homeowners association, you should research the community’s covenants and assessments, both of which will be set forth in the declaration and bylaws. The HOA’s board or the seller can usually provide copies, or the documents can be viewed in the county land records, which are often available online. Remember, when you accept the deed to a property, you are agreeing to be bound by any covenants that come with it. So, make sure you know what you’re getting into.
The restrictiveness of covenants varies considerably between communities, depending in large part on the nature of the community and where it is located. A laissez-faire rural development with large lot sizes, for example, might be fairly permissive - not requiring much more than that you keep your lawn mowed and remove any eyesores like visible trash or debris from the property. On the other hand, a suburban community with more closely situated homes might restrict everything from the color you can paint your house, to the size and breed of dogs you can keep, to the type of garden you can have (if any). Covenants are mandatory and strictly enforced by most associations, so be certain the community’s standards are compatible with your lifestyle before buying a home.
It’s worth noting that, while Ohio law expressly requires homeowners to abide by applicable covenants, certain restrictions are prohibited. Condo associations, for instance, cannot prevent their members from displaying the American flag. O.R.C. §5311.191. Likewise, any covenant that violates the federal Fair Housing Act or Civil Rights Act is unenforceable and void.
Assessments are the fees each member contributes toward an association’s common expenses, providing the necessary funding for the “administration, governance, and maintenance” of the association. O.R.C. §5312.10(A)(1). Like covenants, assessments vary substantially between communities. A smaller association with few common elements might charge as little as $100 per year, while assessments in a large association with elaborate recreational facilities might be as much as a few thousand.
The precise dollar amount is either stated in the declaration or, if not, calculated according to a method laid out in Ohio’s Planned Community Law. Each year, the board adopts an estimated budget for all anticipated expenses and collects assessments from homeowners according to the budget. O.R.C. §5312.06(A)(1). Each lot is responsible for an equal share of the total budget unless the declaration provides for different proportions. If an assessment cap is expressed in the declaration, the board cannot increase the amount without first amending the declaration, which requires approval of 75% of the association’s members. O.R.C. §5312.05(A)
As with covenants, you’ll want to be sure you’re comfortable with the annual assessments before acquiring a home in an HOA. Because an owner’s failure or refusal to pay assessments impedes an HOA’s ability to function and burdens other owners, the board is granted strong enforcement powers. Under Ohio law, boards have the authority to suspend voting rights and common facility privileges of delinquent owners. O.R.C. §5312.06(D)(15). An association can also record a lien against a non-paying owner’s property and foreclose on the property to satisfy the lien in the same manner that a bank forecloses on a delinquent mortgage. O.R.C. §5312.12. If an association is required to file a civil lawsuit to collect assessments or to otherwise enforce community covenants and restrictions, it can recover its attorney’s fees and other costs of enforcement from the member. O.R.C. §5312.11.
Amicably Resolving HOA Disputes.
In most cases, good communication and the democratic process are sufficient to resolve problems with a community association. Attendance at member meetings, voting, and simply speaking with board-members often goes a long way toward resolving disputes that might otherwise seem implacable.
Ohio law requires HOA’s to hold owner meetings at least once per year, and special meetings can be called by the president, the board, or a majority of owners. Members can voice concerns over how the board is enforcing association rules or performing obligations, and the board and homeowners can work cooperatively toward solutions. Overzealous board-members or officers can be removed democratically. When necessary, members can amend the declaration by 75% vote.
Concerned members can also exercise their record-inspection rights. An HOA board must keep records and receipts of all expenditures, and members can examine all association records other than a few privileged items. O.R.C. §5312.07. If problems are identified, the member should raise the issues at a member meeting or directly with the board.
When cooperative resolutions aren’t possible, both members and associations are authorized to seek redress in the civil court system. The Court of Common Pleas of the county in which the development is located has jurisdiction over HOA disputes, or, if the amount in controversy is less than $6,000, the case can be filed in small claims court.