FOR HOA, CONDO, HIGH-RISE LEADERS
Under Ohio law, there is no such thing as dues or maintenance fees. The correct term is assessments. Most associations have monthly assessments, some have quarterly assessments, and a few have an annual assessment.
In Ohio, Covenants, Conditions, and Restrictions (“CC&Rs”) are known as the declaration and bylaws. The declaration is a document filed with the county that declares the deed restrictions and designates the property as a planned community. Bylaws are a document also filed with the county that provides for the operation of the owners association and governs its internal operations.
Declarations and bylaws are filed in the county at the recorder’s office in which the property is located.
First, a document is prepared by an attorney and distributed by the board to the owners providing the language of the proposed amendment. Generally, to amend the declaration or bylaws requires 75% approval from owners. If obtained, the second step involves preparing a document to be filed with the county thereby making it legally binding and an enforceable part of the declaration and bylaws.
The declaration and bylaws should be very specific. Vague governing documents can be open to multiple interpretations, which then may create the possibility of disputes and legal challenges.
The declaration and bylaws are restrictions on each property filed with the county, whereas rules and regulations are administrative guidelines enacted and modified by the board and are often the common sense do’s and don’ts governing the property: for example “pet owners must immediately clean up after their pets.”
Each association’s declaration “declares” what are common elements owned by the association or all the owners as tenants in common, versus what is owned by the owner. Common elements often include the association’s pool, clubhouse, or other shared amenities.
When there is a conflict between the declaration and the bylaws, the declaration controls.
Rules are promulgated by the board and are generally more specific than the restrictions contained in the declaration. Rules are the common sense do’s and don’ts of community association living.
To be valid, the language of a restriction within the governing documents must be clear and concise. If the restriction is unclear, it often takes litigation to resolve the issue, because vagueness usually leads to multiple ways to interpret the provision.
If boards follow their rules and documents, does the potential exist for them to be challenged successfully?
Legal challenges are always a possibility, though the likelihood of an owner prevailing on such as challenge is minimal, absent discrimination involving a protected class or other substantive issue with the rule or restriction that makes it unenforceable or illegal. For these reasons, boards should always consult with legal counsel with adopting rules and amending governing documents.
All Ohio community association board members must comply with FHA laws. The Fair Housing Act prohibits discrimination against individuals based on race, color, sex, national origin, familial status, religion, or disability. This means that a board cannot adopt a rule or propose a restriction that discriminates based on these protected classes.
Is a committee’s decision final when penalizing a resident rule-breaker, or can a resident appeal to an association’s board? Should there be an appeals process?
In Ohio, Boards must make the final decision on enforcement infractions and assessments for violations. If the board makes a decision, there is no appeals process other than legal action. Ohio law stipulates that the board itself has the power to levy “enforcement assessments” for rule violations.
In Ohio, there are no such things as “fines,” but rather, the board is permitted to levy “enforcement assessments.” Most Ohio associations set enforcement assessments as a consistent, flat rate, or the cost to remedy the violation. A flat rate removes the possibility of an enforcement assessment being challenged on the basis that it is arbitrary. The amount of any enforcement assessment must be reasonable and reasonableness may vary from property to property.
Yes, the board can levy enforcement assessments for violations of the declaration, bylaws and rules. However, the association must first go through procedures in Ohio law that basically require a first warning letter providing an opportunity to cure the violation followed by a letter levying the enforcement assessment that must include the owner’s right to request a hearing with the board.
No, the board does not have to provide an appeal process but an owner who is assessed an enforcement assessment must be given a right to a hearing with the board.
If an owner is unhappy with the board’s enforcement decision, their only remedies are compliance or legal action.
A regulation is “reasonable” if, in the opinion of an ordinary reasonable person, it directly promotes the health, happiness, safety, or peace of mind of the residents, it is not arbitrary, and it does not treat certain residents differently from others.
How does the Board communicate its actions available to residents, and what is meant by transparency?
A Board makes residents aware of its actions with official written notices, newsletters, and websites. A transparent board is one that keeps its owners fully informed as to all financial and operational aspects of the property. Transparency involves a board letting its owners know all details of its activity.
Governmental sunshine laws do not apply to private corporations, including community associations. As a result, a board may hold meetings and make decisions without being in full view of the owners, unless the community’s governing documents provide otherwise.
Owners must be informed of a new rule prior to the rule being enforceable. While no notice is required by statute, many governing documents require a 30-day advance notice before a rule is enforceable.
As soon as a rule is enacted and notice of it is provided to the owners it becomes enforceable; however, an association may also have a provision in their governing documents that delays enforcement of newly enacted rule for a specific amount of time.
Yes, association boards have a duty to enforce properly documented or evidenced violations of the association’s rules and restrictions or to change or eliminate the rule. The board need not be a police force and go in search of violations; however, when in receipt of a notice of alleged violations, the board has a reasonable duty of enforcement.
Alternative Dispute Resolution is the use of methods outside of litigation, such as mediation or arbitration, that allow opposing parties to resolve a dispute without incurring large litigation fees.
Mediators are individuals that explore potential resolutions to solve a dispute and facilitate discussion between the parties. Mediators do not make decisions; instead an agreement is created between the opposing parties. Conversely, in arbitration, the arbitrator makes a final decision that is binding and enforceable. The decision of an arbitrator may not be appeal
Many Ohio Bylaws mandate that individuals who initiate arbitration involving the association must pay for it. Dispute resolution is not a common practice among Ohio community associations until after litigation is initiated.
Ohio community associations cannot place restrictions that directly interfere with the buying and selling of property, though certainly some restrictions may impact whether or not a particular buyer wishes to buy property in the community, such as restrictions on leasing or business use, as well as the manner in which properties are sold, such as restricting for sale signs or open houses.
Architectural controls are the board’s or architectural control committee’s requirements that determine what changes may be made to physical structures in the association in terms of aesthetics. What is reasonable is largely determined by the provisions of the governing documents initially drafted by the developer, and as thereafter amended by the owners of the association, that is consistent with the architectural harmony of the surrounding community
Can associations require that renovation work be authorized by the board and specify that contractors need to be licensed and bonded?
Yes. Ohio boards have the power to enact rules that are in the best interest of the entire community. A condominium board may require that all contractors working on the property be licensed. Such a rule clearly protects the safety of the property and its residen
Play-sets that have a concrete base or other substantial features are generally considered a permanent fixture. A temporary structure is generally one that may be moved inside from time to time.
Can associations restrict or prohibit the installation of energy efficient systems for aesthetic reasons?
Currently in Ohio yes, an association may prohibit or restrict the installation of energy efficient systems, such as solar panels and clothes lines, on the basis of aesthetic concerns, provided that in a homeowners association, the association has architectural control authority over the individual lots.
If the association’s governing documents allow for it, the association can grant a variance. However, the requirements to grant a variance should be limited and not granted in an arbitrary manner. Additionally, if these requirements are not met and a variance is granted, it may be deemed unenforceable if challenged in court. Every Ohio board has a duty to act reasonably. While rare, variances can and should be granted if appropriate circumstances warrant. As an example, an association that prohibits pets must grant a variance for a Seeing Eye dog to accommodate a medical necessity.
Encroachments in common elements involve an individual owner placing something in an area that is commonly-owned by the owners or the association. Associations often have self-help provisions to allow them to summarily remove encroachments.
Can an association be held responsible in a situation where there was insufficient lighting caused by lighting restrictions?
No, while community association boards should keep safety in mind when making decisions to preserve and protect the wellbeing of the community, most community associations do not have the duty to provide safety to the residents. So the board may, but is not required to, take steps to protect the safety of the residents.
Yes, but only of the board has evidence of the violation, meaning that the Association has a radar gun or surveillance equipment that can accurately identify speed. In Ohio, based on certain signage and minimum 25mph speed requirements, the local police are authorized to issue speeding tickets within community association private roads.
Holiday display restrictions are reasonable when they do not include restrictions based on religion and that do not cause an unreasonable disturbance to neighbors. Time, place, and manner restrictions on holiday decorations are viable.
Political signs are often regarded as a form of speech and therefore, normally protected under the first amendment; however, this protection does not fully include speech that occurs in private community associations if the governing documents restrict signage. In Ohio, the banning of political signs is based on ownership of the land where the sign is placed. In most condominium associations, the association owns and maintains the green space around a residence, and so a condominium board may restrict or prohibit political signs in the common elements. In a homeowners association where the individual lot owners own the lot and land surrounding the home, the governing documents must either contain a prohibition against signage or permit the board to enact rules restricting signage. If the authority to restrict signs, including political signs, is not in the governing documents, the Board has no the authority to do so. Even if the Board has the ability to restrict signs, enforcement at or around election season can be difficult.
It is not a statutory requirement that an association have a written election procedure; however, it is normal for an association to have an election procedure set forth in its bylaws.
There is a requirement for notice to be given of association meetings. Elections are considered association meetings and therefore notice is required.
Ohio requires that associations hold elections at least once every year. The number of board members to be elected if any, depends on whether there are any open positions. The bylaws typically state when an association’s annual meeting should take place each year and whether the term of board members is staggered.
Yes, an annual meeting of the owners is required.
Yes, an association may insert, by an amendment that is approved by the owners, term limits for their board members, though doing so may be counter-productive as it limits the pool of eligible and willing volunteers to take on the position for the association. Ohio has no statutorily required term limit so if it is not currently in an association’s bylaws, term limits would require an owner amendment vote.
Directors are generally elected by members of the association, and are vested with the power and authority to vote to direct the corporate affairs of the association. Officers on the other hand are generally appointed by the board of directors, and they have specific job requirements. In most cases officers are directors.
A nominating committee can be chosen in a multitude of ways; however, most commonly, the board appoints individuals to a nominating committee. Ohio has no statutory requirement for nominating committees; though some bylaws mandate a nominating committee and specifically what the composition of the nominating committee will be. If in the Bylaws, in general a nominating committee will be appointed by the board of directors.
The nomination process is governed by the bylaws, and so nominations from the floor must be provided for in the bylaws.
Self-nomination may be banned only if the Bylaws contain a provision that limits the method by which an individual may be nominated.
What is the procedure for a resident not nominated by the nominating committee to be listed on the ballot?
If not prohibited by the governing documents, an individual may nominate themselves or have another owner nominate them, provided that the person nominated accepts the nominations.
There is nothing in Ohio law that prevents a board from publicly endorsing a single candidate or a slate of candidates.
No, the Board may not adopt rules on who can be on the board, though governing documents may set qualifications for being on the board, such as being an owner-occupant or in good-standing with the association.
No, this procedure should be avoided because it involves current board members investigating challengers for their positions. If the information from a background check is handled inappropriately it may open the association up to litigation or fair housing complaints.
A board may not go far at all in vetting potential board members. Generally, vetting is limited to verification of ownership and compliance with governing document required qualifications.
During the campaigning phase of the election, do boards need to provide equal access to association media for candidates to campaign?
There is no Ohio law requiring equal access to association media for board member candidates, though to promote a sense of fairness boards should attempt to treat all candidates equally. Many boards do so by allowing each candidate to write a brief description of their background and reasons for running for the board and then share this information with all owners.
There is no Ohio law preventing an individual owner, even if a current board member, from making their opinions or beliefs known. To avoid the board from reducing itself to political bickering and mud-slinging, the board itself should not communicate with owners through association media alleging that a candidate is making false claims.
No, voting in an association election is open to all owners.
Generally when an owner walks in the door for the annual election meeting, they sign in for their unit and should be handed a ballot. Voting is private, so the ballot should not include the name or address of the owner. In many Ohio condominiums, voting is weighted by percentage of ownership and in those instances, the ballot should contain the percentage of interest.
It is the duty of the inspectors of the election to count the ballots, and once the ballots are counted and the meeting adjourned all owners have the right to view the ballots.
Voting by proxy must be authorized in the association’s bylaws. A proxy must be in writing and designate who the proxy is given to, the purpose for which it is used, and it has to be signed and dated by the owner giving the proxy.
An association’s bylaws control the use of proxies. A proxy is not limited unless the bylaws or the proxy itself imposes such a requirement.
Members of an association are given a number of votes in correspondence to how many open board member positions there are, however the owners are not required to cast one ballot per candidate but could instead use all of their votes on a single candidate.
To illustrate the definition of cumulative voting:
There are 3 open positions on the board, and 3 candidates run for those 3 positions. Everybody has the right to cast 3 votes. If the association bylaws permit cumulative voting, each owner would be able to give all 3 of those votes to one candidate.
The bylaws of an association often indicate that the votes are determined by the drawing of lots or the flipping of a coin. If the Bylaws of an association are silent on this topic, another round of voting would be necessary.
In Ohio, a judicial court action would be necessary to challenge an election or force a recount.
An election inspector oversees an association’s election to ensure there is no irregularity in the processing and counting of votes. The inspector generally counts the votes, verifies the owners, and ensures a proper chain of custody of ballots. An election inspector is generally selected from among the owners but may also include the association’s attorney or management company personnel.
“Transition” refers to the process where a developer of an association turns over or “transitions” control of the Association to its owners as required by the recorded restrictions or state law.
The developer and builder remain liable for construction deficiencies, regardless of transition. An association should never “sign off” on any potential deficiencies as part of a transition without consulting with relevant professionals, including an attorney.
An owner comprised board does not exist until the transition process takes place, and therefore cannot take any action as a board prior to that time.
The transition date is very important as it represents the date upon which control of the association is conveyed to its owners. The specific date or time frame is determined by the recorded restrictions or state law.
The role of any advisory committee appointed by the developer is determined by the developer. Typically, a committee has no authority to act on its own but rather only to make recommendations.
Is there ever a situation where a developer will pay expenses out of their own pocket to keep assessments artificially low?
While some developers may subsidize the operation of an association, any effort to keep fees “artificially low” especially where owners are not informed, is inappropriate. Potential purchasers should always ask for financial information related to the association, so that they have an accurate understanding of the association’s financial health, and to what degree a developer may be supplementing the community.
Generally, homeowners have the right to inspect an association’s financial records, whether still controlled by the developer or not. Homeowners have no right to inspect the developer’s own financial records, absent making claims in a lawsuit.
If the developer enters into a contract on behalf of the association, what happens after the transition? In this case, is the association responsible?
Whether an association is responsible for contracts entered into by the developer, depends on the specific contract, an association’s restrictions and state law. While the developer has a right to enter into contracts, the duration of those contracts in specific instances may be limited. In Ohio, developers may not enter into contracts for more than one year after transition, unless the contract is for necessary utilities.
A construction defect is a deficiency in design or workmanship completed by the developer or builder, usually as a result of something being completed not to building code or industry standards, which is not the result of a failure to maintain by the association.
The association’s recorded restrictions define an owner’s responsibility versus an association’s responsibility, which in turn dictates who has standing to pursue a developer or builder for any deficiency.
An association should place the developer or builder on notice of any deficiency, after consultation with professionals such as engineers and attorneys. The nature and extent of any deficiency will dictate how far any claim will be pursued.
How can an association complete necessary repairs quickly while still pursuing any claims they may have against their developer?
An association is obligated to reasonably maintain the property irrespective of any construction deficiency. That obligation may require the Association to make repairs while at the same time pursuing a claim against the developer. In doing so, the association has to be careful not to destroy any evidence that the developer may use in its defense. For these reasons, it is critical to have the assistance of professionals, such as engineers and attorneys during this entire process.
Typically, a contractor will document with photographs, video or reports any condition they encounter, in conjunction with the recommendations of an engineer, in addition to providing a developer or builder with an opportunity to perform their own inspections and documentation.
An association should notify the developer or builder of any deficiencies in writing, at such time that it becomes aware of the existence of the deficiencies. On occasion, this may require additional investigations to present all known deficiencies at the same time. The nature and timing of any such notice should be discussed thoroughly with an attorney as part of a general strategy in presenting a claim.
The expiration of an express warranty does not necessarily mean that the association does not have a claim for defective construction. The law recognizes a general claim of poor workmanship, regardless of any warranty. There are, however, strict time limits within which such general claims must be brought.
Depending on an association’s recorded restrictions, including bylaws, typically an Association’s Board of Directors has the ability to modify existing rules and regulations, as long as they do not conflict with recorded restrictions.
On occasion, construction defect claims may be required to be submitted to arbitration, which is a process outside of the general court system where an association’s claims are determined by one or more arbitrators chosen by the parties. Typically, the arbitrators have some experience in construction defect claims. Once the arbitrator makes a decision, it becomes a “judgment” when filed with the court.
Community associations have significant weapons to collect delinquent assessments, including filing liens, obtaining money judgments, and initiating foreclosure.
All owners are assumed collectable unless they have declared Chapter 7 bankruptcy. The most successful method of collecting delinquent assessments is by having the board enact an administrative late charge. If the balance remains unpaid, the next step is usually a collection letter sent by the association’s legal counsel. If that fails, a lien is filed against a property and if the lien remains unpaid, a small claims money judgment or foreclosure action may be initiated.
Even if the board believes that collection is doubtful, normal collection procedures should be followed that would ultimately result in a foreclosure sale of the unit to a new owner. The board would be breaching its duty if they permitted a delinquency to go on in perpetuity. A foreclosure sale to a new owner would “stop the bleeding” of bad debt.
A board should not engage in any practice that attempts to embarrass the delinquent owner. There are sizeable risks associated publishing names and account information of delinquent owners. If there is an error, a board could face a defamation claim for erroneously reporting that someone hasn’t paid a debt.
The association commences a judicial foreclosure through the filing of a complaint with the county court or common pleas. This litigation is determined by a judge. Ultimately, if the judge agrees a debt is owed, the judge orders the county sheriff to sell the property and pay the debtors in the chronological order their lien was filed, and deeds the property to the new purchaser.
A reverse mortgage foreclosure is the exact same as a judicial foreclosure. However, instead of a bank foreclosing on its first mortgage, or a community association foreclosing on its lien, a lender would foreclose on a reverse mortgage for funds it lent to a borrower.
Once a foreclosure is filed, the board relies on the association’s attorney to move the foreclosure proceedings through the court system.
Once collection is initiated, a wise board will stop any and all communication with the delinquent owner regarding the delinquency.
There is risk of inconsistency if various parties are communicating with a delinquent owner. In order to avoid inconsistency on the amount owed, on the terms of a payment plan, or any other issues, a wise board has the association’s attorney serve as the sole point of contact through the collection process. Further, the Federal Fair Debt Collections Act likely can apply, and so all communications should be handled through legal counsel.
Associations are permitted to charge back to a delinquent owner the reasonable costs of attorney fees incurred in the collection of a delinquent account. As a result, most Ohio community associations initiate legal proceedings through a lawyer to collect unpaid assessments as it is then able to generally recoup 100% of the unpaid assessments, late charges, plus legal fees. Collection agencies, on the other hand, charge a percentage often one-third or 40%, which is usually not recoverable.
If an owner expresses an ability to enter into a repayment plan over time, the board is able to make the business decision as to whether or not to accept the payment plan.
Do not accept nor consider payment plans that are unrealistic. Entering into a payment plan that fails the first month wastes everyone’s time and delays recovery. Both the board and the owner need to be realistic about what payments are feasible. One of the biggest mistakes a board can make is setting arbitrary payment plans without looking at individual circumstances. In addition, a board should make clear that with any repayment plan, the association’s collection policy will continue to be followed. In other words, a board should not hesitate to secure collection of the debt by filing a lien even if a payment plan is in process.
No, the board should never accept less than the full amount or tell a delinquent owner to not worry about paying their debt.
The Fair Debt Collection Practices Act (“FDCPA”).
The Fair Debt Collection Practices Act is federal legislation that governs the collection of debts against consumers. There are many obligations placed on debt collectors under this law.
FDCPA applies only to third party debt collectors. It does not apply to individual board members attempting to collect a debt; however, over the years community associations across the country have witnessed verbal abuse, physical abuse, and even shootings when individual board members have attempted to become debt collectors. For their own safety, our office strongly recommends that individual board members avoid attempts to collect delinquencies. A board member should never be pounding on an owner’s door yelling at them to pay up.
A wise board will regularly monitor the progress of a collection case once it has been filed in court. Our office has a password protected portal for our client associations which permits board members to log in and see up to the minute activity or progress in the collection of the delinquent account that has been filed in court.
Garnishment is the taking of a portion of a delinquent owner’s wages in order to satisfy a delinquent account owed to the association.
A bank attachment is a taking of a delinquent owner’s funds being held by a bank in order to satisfy a debt owed to the association.
A lien is a legal document that must accurately depict a description of the delinquent owner’s property as well as an exact amount owed. A lien should be filed by the association’s attorney.
A lien may usually be filed for any assessment that is more than 10 days past due. Our office recommends that every association has a collection procedure. I attached a sample procedure that reflects our recommendation that a lien be filed on any account that is three months past due.
In any legal collection proceedings, unique circumstances may demand unique approaches. If an owner is clearly uncollectable, an association’s attorney may encourage a bank to accept a short sale so that a new owner is in the home sooner, paying monthly assessments sooner, and stopping the bleeding of bad debt.
Is it advisable to go after delinquent owners who decide to walk away from their properties, particularly those owners who did a strategic default?
Yes, there is a wide assortment of remedies to collect against an owner who walked away from their property. In collection efforts we handle, we not only seek sale of the delinquent owner’s property, but also a money judgment against that owner. Our office successfully collected delinquent assessments years after a delinquent owner walked away from the property.
Is it advisable to pursue foreclosures against delinquent owners, or allow banks to foreclose and assume the related financial obligations?
One of the biggest mistakes our office sees association boards make is to sit on their hands and assume that a bank will ultimately foreclose. Under today’s economic conditions, banks have a multitude of pressures preventing them from foreclosing. As a result, associations should not hesitate in any manner to initiate foreclosure proceedings.
For associations with a small annual assessment, including homeowner associations, small claims is a viable option. Small claims is not usually a viable option in condominium associations, where unit owners may use as a defense that the association has failed to do maintenance or provide a service, and so a small claims court may reduce or eliminate the amount a unit owner in a condominium must pay.
If the bank joins a foreclosure the association has already started the process, can the association discontinue it?
Yes, but it would be a mistake for the association to sit on the sidelines when a bank joins a foreclosure. The association’s attorney is able to expedite foreclosure proceedings by timely filing appropriate motions. An association should never discontinue its collection efforts.
Should the association move forward with its own foreclosure once the bank begins the foreclosure process?
The party initiating the foreclosure is required to name as a party all those with a lien on the property. If the association files the foreclosure first, the bank joins the association’s foreclosure. Even if the bank is a party to the foreclosure, the association also remains a party and the association’s attorney should do everything possible to expedite the proceedings.
Once a bank or other party takes title to a residence through foreclosure, it is treated the same as any other owner and becomes responsible for maintenance of that property. Our office finds that communication with the appropriate bank personnel more often than not will result in cooperation from the bank to maintain its property.
The period of redemption is set by statute and is the period of time during which a debtor – or other entity with an interest in the property they want to protect – can pay all sums due and retain title to the property.
Regrettably, Ohio has not followed the lead of many other states by enactment of a super lien statute. As a result, unless an association’s governing documents stipulate otherwise, a lender or any other foreclosure sale purchaser is not required to pay assessments levied prior to the foreclosure sale date.
What are the pros and cons of the association foreclosing on a delinquent owner with the intent to rent out the unit to recoup the association fees?
As part of foreclosure proceedings, Ohio law permits an association to ask a judge to appoint a receiver, who will collect the rents during the pendency of the foreclosure and pay the association, not the owner/landlord
It is unique for an association to be acting in the role of landlord. Most associations do not own a residence and if they do, the residence is normally occupied by a staff member, such as a custodian. If an Ohio community association actually owns a leased residence, the community association must follow the extensive Ohio landlord tenant laws.
The association must keep a statement of account for each owner, whether delinquent or not. However, when an account is delinquent, the account itself will at some point be required by the court as evidence of the delinquency. As a result, all Ohio associations must keep complete and accurate records of account for each and every owner and these records must be especially kept current in the instance of a delinquent account.
What are the differences in approach with regards to liens, foreclosure, district court actions, circuit court actions, and money judgments?
I strongly recommend that each and every association have its own collection policy and procedure. By having its own policy and procedure, a board avoids differing approaches for different owners and even more importantly, avoids claims of discrimination or selective enforcement. See the copy of our collection procedure attached.
Ohio requires that association records be available for inspection, and so associations must retain their records. These include their governing documents, insurance documents, legal documents, tax records, financial and accounting records, meeting minutes, employee benefit records, contracts, and warranties.
What records are associations required to keep? What are they encouraged to keep (though not required?)
See the attached listing of records that our office recommends associations retain and also note our recommendation as to the length of time these records should be kept.
Many associations keep their records in chronologically ordered binders known as “corporate record books.” The type of document determines how long it should be kept. See number 2 above.
More and more associations scan their records and keep them in electronic format. For associations with many years of written records, scanning can save the significant cost of storage of paper documents.
Board meeting minutes must reflect who was in attendance, the date, the time the meeting began, the time the meeting ended, and a description of every decision made. Community associations should keep meeting minutes, not hours. By that, I mean that meeting minutes absolutely do not need to reflect what was said at the meeting. Meeting minutes should only reflect what was decided at the meeting and this decision is best reflected with the minutes indicating the motion made, the name of the person making the motion, the name of the person seconding the motion, and the vote outcome.
There is no statute governing record keeping by committees. However, many bylaws and some boards require committees to keep minutes of their meetings in the same fashion as the board is required.
While there is no Ohio law preventing records being stored in a board member’s home, it is wise to store them in a place that is safe, fireproof, and accessible to all board members. Often, association records are now stored in a secured, online portal. Most associations have the benefit of being managed by a professional manager or management company. These managers or management companies more often than not provide for the safekeeping of association records. Storage of association records in a board member’s home is never recommended.
There are currently no Ohio laws addressing this topic. It is not unusual for associations to have websites where its declaration, bylaws, rules, and contact information is available to the general public. These websites usually contain a password protected portal for owners and provide access to copies of meeting minutes, financial records, and often times certain contracts such as snow plowing and landscaping.
The only guideline set forth for both homeowner and condominium associations in the Ohio Revised Code involves letting documents be reviewed for a “reasonable” amount of time.
All owners have access to most association records.
In Ohio, executive sessions may remain private. These records include:
- Information that pertains to property-related personnel matters;
- Communications with legal counsel or attorney work product pertaining to potential, threatened, or pending litigation, or other property-related matters;
- Information that pertains to contracts or transactions currently under negotiation or information that is contained in a contract or other agreement containing confidentiality requirements and that is subject to those requirements;
- Information that relates to the enforcement of the Declaration, Bylaws, or rules of the owners association against other owners;
- Information, the disclosure of which is prohibited by state or federal law.
- Records that date back more than 5 years prior to the date of the request.
What process can associations require residents to take in order to review records? Can associations limit how records are reviewed? Can associations charge owners to see records?
Any owner may examine and copy the books, records, and minutes of the owners association pursuant to reasonable standards set forth in the declaration, bylaws, or rules the board promulgates. The standards may include, but are not limited to, standards governing the type of documents that are subject to examination and copying, the times and locations those documents may be examined or copies, and the specification of a reasonable charge for copying the documents.
Association boards must always be careful to not discriminate based on the protected classes. In addition, compliance with the Fair Housing Act in most instances requires a careful examination of a given set of facts and circumstances. A common sense approach to any request for an accommodation under the Fair Housing Act is to avoid any denial of the request at the outset, whether due to deed restrictions, rules or otherwise, and to seek the advice of professionals as to your obligations in any given case. Note that any unreasonable delay in responding to a request for accommodation, may itself constitute a violation of the Fair Housing Act, so all such efforts should be made reasonably quickly. Also, all rules and regulations should be reviewed to identify and remove any language that may violate the Act, such as “adult swims.”
Understanding how to appropriately respond to an accommodation request is a common issue for community associations. The penalties for community associations that violate Fair Housing Laws can be significant including actual damages, statutory damages, punitive damages, and attorney’s fees awards.
No – while obtaining FHA certification may be in the Association’s best interests for unit owners to obtain financing for units, the Board does not usually have the duty to make sure that the Association is FHA certified. That said, if an owner requests documents from the Association to assist their lender in obtaining FHA certification, the Association must usually provide those documents and cooperate with that request through the normal records request policy.
FHA certification is the process by which the US Department of Housing and Urban Development (HUD ) reviews and certifies that an association is compliance with all of HUD’s requirements for condominium associations. Without FHA certification, units within the condominium are not eligible for FHA insured financing.
The Civil Rights Commission investigates, mediates and prosecutes alleged violations of Fair Housing and other anti-discriminatory laws.
All Ohio community associations must comply with FHA laws. The Fair Housing Act prohibits discrimination against individuals based on race, color, sex, national origin, familial status (that includes age), religion, or disability. This means that the board cannot adopt a rule, propose a restriction, take or fail to take any action that discriminates based on these protected classes.
Penalties for violations of Fair Housing Laws are civil in nature.
Any rule or covenant that on its face discriminates against a protected class, or in practice has that effect, is problematic and is likely illegal. Specific examples include rules based on age such as “adult swims” or “children cannot play in the street.” Rules that apply to everyone regardless of age, such as pool hours and prohibitions against playing in the street that are not limited to “children,” are generally permitted.
How can outside entities put associations at risk? As an example, could an association waive a fee for, say, the Boy Scouts of America to use a community room but still charge other groups?
Generally speaking, association amenities are for the benefit of owners, residents and their guests. Allowing outside groups to use association amenities may convert the association’s property into a place of “public accommodation” and subject it to the Americans with Disabilities Act (“ADA”), which could require physical modification of the property.
Otherwise and aside from any fair housing concerns, an association has an obligation to treat all owners and residents in a nondiscriminatory fashion. Setting different fee policies based on the type or membership of a particular group of owners or residents would likely violate the association’s restrictions, if not fair housing laws.
The Fair Housing Act prohibits discrimination against individuals based on race, color, sex, national origin, familial status (including age), religion, or disability. This means that the board cannot adopt a rule, propose a restriction, take or fail to take any action that discriminates based on these protected classes.
The “elderly” are not specifically identified as a protected class under Federal or Ohio state fair housing laws, but age is considered part of familial status. As a result, unless the community is specifically identified as Housing for Older Persons, the community cannot discriminate or adopt rules that are age based.
While sexual orientation is not specifically listed as a protected class in the Fair Housing Act, a recent United States Supreme Court decision determined in an employment related case that discrimination based on sexual orientation is essentially based on “sex,” which is a protected class. In addition, many local jurisdictions such as cities and counties have their own anti-discrimination laws and ordinances, many of which protect sexual orientation.
Associations have an obligation to provide reasonable accommodations to disabled persons. In most instances, that may require providing a translator at annual or board meetings if requested. At a minimum, associations must allow disabled owners to bring translators to such meetings if they so desire.
A reasonable accommodation is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with disabilities to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces, or to fulfill their program obligations.
An association can deny a request for a reasonable accommodation if the request was not made by or on behalf of a person with a disability or if there is no disability-related need for the accommodation. In addition, a request for a reasonable accommodation may be denied if providing the accommodation is not reasonable – i.e., if it would impose an undue financial and administrative burden on the housing provider or it would fundamentally alter the nature of the provider’s operations. The determination of undue financial and administrative burden must be made on a case-by-case basis involving various factors, such as the cost of the requested accommodation, the financial resources of the provider, the benefits that the accommodation would provide to the requester, and the availability of alternative accommodations that would effectively meet the requester’s disability-related needs.
Yes. An association may not discriminate against owners or residents based on their religion.
Depending on an association’s recorded restrictions, an association may institute reasonable rules regarding the display or placement of any items, including religious displays, in the common property as long as those rules are applied evenly and in a nondiscriminatory fashion.
An association may regulate activity in the common areas as long as such regulations are reasonable, applied evenly and in a nondiscriminatory fashion. If an association is permitting other “services” in or on the common property, it cannot discriminate against “religious services.”
Are sex offenders and/or individuals who pose a direct threat to a community considered "disabled" for FHA purposes? Can there be restrictions against them?
Currently, convicted sex offenders are not considered to be “disabled” under Fair Housing Laws. As such, reasonable restrictions, typically regarding the most serious of sex offender categories where government notification of the offender’s residence is required, is permitted.
No, unless the association is specifically established as a Housing for Older Persons, commonly referred to as an “over 55” community, it may not discriminate against families with children.
How can pool and clubhouse rules discriminate against children, and is it okay for associations to establish rules restricting children from these areas?
Rules cannot, in most circumstances, discriminate against children. An association may establish reasonable rules for individuals under a certain age when directly related to the safety or health of such individuals, or when recommended by the manufacturer of certain equipment. For pools, typically that means that individuals under the age of 12 may be required to be accompanied by a responsible person over the age of 12 who is a capable swimmer. However, “adult swims” or other age-specific rules are prohibited. For the use of exercise equipment, an association may rely on a manufacturer’s recommendation such as “not for use under 16 years of age.”
How does the Health Insurance Portability and Accountability Act affect an association's ability to verify claims?
HIPAA has limited effect on accommodation requests. Generally residents voluntarily provide confirmation of a disability that is not apparent. Associations are not permitted, however, to request actual medical records or diagnosis information as part of an accommodation request. To the extent any medical information is provided to the Association, it should not disclose that information to third parties.
Is an association required to allow residents to own animals if they have a prescription/note from their doctor for a comfort or service animal?
An association will be required to allow a comfort or service animal based on a note from a doctor, social worker or other healthcare worker that confirms the existence of a disability and the need for the accommodation. In instances where a disability is apparent, no note or prescription may be necessary and it simply becomes a question of whether the requested accommodation is “reasonable.” If an owner makes such a request, the association should immediately review the facts of the particular circumstance with legal counsel to determine the scope of the board’s authority on the matter.
An association has the ability to make a “reasonable inquiry” into the existence of a disability, but that inquiry is extremely limited and cannot include requests for specific diagnosis, prescription, prognosis or the identification of any specific disability. Rather, the association can request a note from a healthcare profession that merely needs to confirm that a disability exists.
Services animals are defined by the regulations created pursuant to the Americans with Disabilities Act as any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. In contrast, comfort or emotional support animals are not specifically defined by any statute or regulation. Comfort or emotional support animals do not have to be specifically trained. These animals are generally used by disabled persons to provide therapeutic or emotional support to alleviate the symptoms of the disability.
Associations must allow either type of animal for disabled residents, again provided that the animal is necessary to accommodate the resident’s medical condition.
As a general matter, service and comfort animals are not subject to size restrictions.
Does the Americans with Disabilities Act (ADA) affect how an HOA draws up its own rules on service animals?
The Americans with Disabilities Act (ADA) applies to places of “public accommodation.” An association is not considered a place of “public accommodation” unless it allows use of its amenities and property to non-owners or non-residents, or outside groups, whereupon the Act may apply as to those amenities.
Typically, a disabled owner or resident requiring an accommodation for a comfort animal is permitted to go anywhere on the property that the owner or resident is permitted to go, unless there are specific and identifiable health or safety concerns, such as in food processing areas or swimming in a pool, although permitting a comfort animal in the pool area will generally be required.
Is it common and permissible for HOAs to require that these animals be photographed when they're first brought onto the property?
An association may not have a rule that requires service or comfort animals to be photographed when first brought onto the property, unless the rule requires all animals to be photographed. Rules on pets must be applied evenly to all, and may not be drafted to place additional burdens on service animals.
While an association may have to allow a comfort animal, can they limit the number of animals one resident can have?
A request for an accommodation must be considered on its own facts and circumstances. In some instances that may include permitting an owner or resident to possess more than one comfort animal. Again, if an owner makes such a request, the association should immediately review the facts of the particular circumstance with legal counsel to determine the scope of the board’s authority on the matter.
Yes. Associations are considered “housing providers” and thus subject to Fair Housing Laws.
Kaman & Cusimano, LLC
50 Public Square • Suite 2000
Cleveland, OH 44113
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