Ohio Planned Community Law: Assessments, Liens, and Hearings

Ohio planned community law is set out in Chapter 5312 of the Ohio Revised Code, effective September 10, 2010, and it governs subdivisions and similar developments where owners must belong to a homeowners association or share in common property. The statute gives boards real authority over budgets, insurance, assessments, liens, and rule enforcement, and it gives owners equally real rights to notice, hearings, meetings, votes, and court remedies. Several federal laws layer on top and cap what an association can restrict.

Which Communities the Law Covers

A planned community under Ohio law is a development where a deed, common plan, or declaration requires at least one of these things: owners must join an association that governs the community, owners or the association must hold property or facilities for everyone’s benefit, or owners must support shared property through membership fees.¹ That reaches everything from gated subdivisions with clubhouses to modest neighborhoods sharing a private road.

Condominiums are excluded. If your property is organized under Ohio’s Condominium Act (Chapter 5311), Chapter 5312 does not apply to it.¹ The line runs on the property structure: condos share ownership of building structures, while planned communities involve individually owned lots with shared common areas.

What the Declaration and Bylaws Must Contain

No planned community can be legally established in Ohio without a declaration and bylaws recorded with the county recorder.² Those documents are the community’s constitution, and the statute requires them to cover a defined set of subjects.

They must spell out how the board is elected, how many directors serve, and how their terms are staggered so at least one-fifth of the board turns over each year. They must also address removal of directors, whether a professional manager may be hired, how the documents themselves can be amended, and how meetings are called, conducted, and noticed (including whether electronic notice is permitted). Finally, they must describe what common expenses the association can assess and how those assessments are collected.²

Board Powers, Budgets, and Reserves

The board of directors is the association’s operating authority. Ohio law requires the board to adopt an annual budget for projected income and expenses, and that budget must include reserves adequate to handle major capital repairs and replacements without special assessments. The only way to skip the reserve requirement is a written waiver signed by owners holding at least a majority of the voting power, and the waiver must be renewed every year.³ Communities that keep waiving reserves are betting nothing expensive breaks, and the bet often ends in surprise special assessments.

Beyond budgeting, the board collects assessments, manages common property, hires service providers, and enforces the community’s rules. Directors owe fiduciary duties to the association: they must make informed decisions, act in good faith for the community rather than themselves, and avoid conflicts of interest. A director who steers a maintenance contract to a family member’s company violates the duty of loyalty and exposes both the director and the association to liability.

Insurance the Association Must Carry

Starting no later than the first lot sale to someone other than the developer, the association must maintain four types of insurance: property coverage on common elements, liability coverage for common areas, directors and officers liability insurance, and fidelity or crime coverage for anyone with access to association funds.³

The fidelity requirements are unusually specific. Coverage must equal the maximum amount of funds in the association’s custody at any one time plus three months of operating expenses. The policy must protect against theft, embezzlement, and other unauthorized loss of association money, and it must name the association as the insured. It must also cover the manager or managing agent, require the insurer to give ten days’ written notice before canceling or significantly modifying the policy, and be updated within ten days whenever the management company changes.³ If your board hasn’t reviewed its fidelity bond recently, this is the section worth bringing to the next meeting.

Owner Meetings and Voting

The board must hold at least one meeting of the full ownership each year. Special meetings can be called by the association president, a majority of the board, or owners holding at least 50 percent of the voting power.¹ The declaration and bylaws set the rules for how meetings are noticed, including whether email counts. Email works only if an owner has given prior written authorization for electronic notice.²

The annual meeting is the main place to vote on the budget and elect board members. Gathering signatures from half the voting power to force a special meeting is a high bar, but it exists precisely for situations where the board has stopped responding to owners.

Amending the Declaration or Bylaws

Changing the community’s governing documents requires the consent of 75 percent of the owners, either in writing or at a meeting called for that purpose. The declaration or bylaws can set a different threshold, but three-quarters is the default. No amendment takes effect until it is recorded with the county recorder, so a vote by itself does nothing without the filing.⁴

Two situations use different rules. Dissolving the planned community and terminating the declaration requires unanimous consent of every owner. Removing a discriminatory provision from the declaration or bylaws that restricts occupancy or use based on race, color, national origin, religion, sex, or familial status takes only a majority vote of the board, with no need to poll owners.⁴ The lower threshold lets boards clean up old deed language that would violate fair housing law if enforced.

Fines, Damage Charges, and Your Right to a Hearing

The association can assess an individual lot for enforcement penalties and utility charges authorized by the declaration, repair costs caused by an owner’s willful or negligent conduct (including attorney’s fees), costs of enforcing community rules, and any other charges the declaration or bylaws permit.⁵

Before the board can impose a damage charge or enforcement assessment, it must give the owner written notice containing a description of the problem, the proposed dollar amount, a statement that the owner has a right to a hearing before the board, instructions for requesting that hearing, and a reasonable deadline to fix an ongoing violation.⁵ The notice can be delivered in person, by certified mail, or by regular mail. Email counts only if the owner previously authorized electronic communication in writing.

An owner who wants to contest the charge must request a hearing in writing within ten days of receiving the notice. Miss that window and the right to a hearing is waived, and the board can impose the charge immediately. If the owner does request a hearing, the board must send a follow-up notice at least seven days before the hearing with the date, time, and location. The board cannot levy the charge until the hearing has been held, and it must deliver a written decision within 30 days afterward.⁵ Ignoring the notice letter is the single most common way owners lose their right to be heard.

Liens and Foreclosure for Unpaid Assessments

When any portion of an assessment, late fee, enforcement charge, or related cost goes unpaid for more than ten days past its due date, the association automatically gains a lien on the owner’s lot. To make the lien enforceable, the board must file a certificate of lien with the county recorder identifying the lot, naming the owner, and stating the unpaid amount.⁶

The lien is valid for five years from filing and continues to grow. It automatically adjusts to include additional unpaid interest, late fees, enforcement charges, collection costs, and attorney’s fees that accumulate after filing.⁶ The association’s lien ranks behind real estate tax liens and any first mortgage recorded before the lien was filed, but ahead of most other claims.

The association can foreclose on the lien using the same legal process as a mortgage foreclosure. Unless the declaration or bylaws prohibit it, the association can purchase the property at the foreclosure sale. A court may also appoint a receiver to collect rental income from the property during the proceedings, with that income applied first to the common expenses owed on the lot.⁶ Losing a home over unpaid HOA assessments is not theoretical in Ohio.

An owner who believes the assessment was improperly charged can file a lawsuit in the court of common pleas to discharge the lien. If the court agrees the charge was improper, it can order the lien released and award attorney’s fees to the owner.⁶

Enforcing the Rules — By the Board or By You

Every owner, resident, and tenant in a planned community must follow the recorded covenants, conditions, and restrictions in the declaration, along with the bylaws and association rules. Any violation gives either the association or any individual owner the right to file a civil lawsuit seeking money damages, an injunction ordering the violator to stop or comply, or both. The court can also award the winner’s attorney’s fees and court costs.⁷

Individual owners can sue directly, without the association’s involvement. If a neighbor violates a restriction and the board won’t act, you don’t have to wait. The availability of attorney’s fees to the prevailing party raises the stakes of losing at trial for both sides.

Federal Limits on What an HOA Can Restrict

Chapter 5312 gives boards broad authority, but several federal laws mark off areas that authority cannot reach.

Fair Housing and Disability Accommodations

The federal Fair Housing Act prohibits associations from discriminating in housing-related decisions based on race, color, religion, national origin, sex, familial status, or disability. The disability provisions come up most often in planned communities. An association cannot refuse to allow a person with a disability to make reasonable modifications to their property at their own expense if the changes are necessary for full use and enjoyment of the home. It also cannot refuse to make reasonable accommodations in its rules, policies, and practices when an accommodation is necessary to give a person with a disability equal opportunity to use their dwelling.⁸

In practice, a board cannot enforce a no-pets rule against an owner who needs an assistance animal, and it cannot deny a wheelchair ramp that extends onto a limited common element where the owner has a disability-related need for it. The accommodation must connect to the person’s disability, and the association does not have to grant requests that would impose an undue financial burden or fundamentally change how the community operates.

Satellite Dishes and Antennas

The FCC’s Over-the-Air Reception Devices rule prohibits associations from enforcing restrictions that prevent or unreasonably delay installation of certain antennas in areas within an owner’s exclusive use, such as a yard, patio, or balcony.⁹ Covered devices include satellite dishes one meter or smaller in diameter and antennas designed to receive local television broadcasts. The rule does not protect installations on common elements like shared rooftops or exterior walls of community buildings.

Associations can still impose narrowly written safety restrictions and can require professional installation of certain fixed wireless antennas. They can also prohibit individual dishes entirely if the community provides a central antenna system that delivers equivalent signal quality at no greater cost to the owner.¹⁰ In a dispute, the burden falls on the association to prove its restriction is valid.

American Flag Display

The Freedom to Display the American Flag Act of 2005 prevents any residential association from adopting or enforcing a policy that would stop an owner from displaying the U.S. flag on property the owner exclusively owns or controls. The association may impose reasonable time, place, and manner restrictions to protect a substantial community interest, such as requiring a structurally sound flagpole or limiting flag size to prevent blocking a neighbor’s view, but it cannot ban the flag outright.¹¹

1
Ohio Legislative Service Commission. Ohio Code Chapter 5312 – Planned Community Law
2
Ohio Legislative Service Commission. Ohio Code 5312.02 – Applicability of Chapter; Establishment of Planned Community
3
Ohio Legislative Service Commission. Ohio Code 5312.06 – Owners Association
4
Ohio Legislative Service Commission. Ohio Code 5312.05 – Amendments to Declaration or Bylaws
5
Ohio Legislative Service Commission. Ohio Code 5312.11 – Individual Assessments
6
Ohio Legislative Service Commission. Ohio Code 5312.12 – Liens
7
Ohio Legislative Service Commission. Ohio Code 5312.13 – Compliance With Covenants, Conditions and Restrictions; Action for Damages
8
Office of the Law Revision Counsel. 42 USC 3604 – Discrimination in the Sale or Rental of Housing
9
Federal Communications Commission. Installing Consumer-Owned Antennas and Satellite Dishes
10
eCFR. 47 CFR 1.4000 – Restrictions Impairing Reception of Television Broadcast Signals
11
Office of the Law Revision Counsel. 4 USC 5 – Display and Use of Flag by Civilians