Last summer, a new bill called the Ohio Community Association Preservation Act, or HB 572, was introduced to the Ohio Legislature. While it has not yet become law, we’re going to keep you ahead of the curve by discussing some of the proposals within HB 572.
The objective of HB 572 is to give condominium and homeowner associations (HOA’s) more legal muscle to collect delinquent association dues, fines and fees. The bill’s language is subject to change, and the legal-speak is complex; we’ve chosen a few points to share for example only. Please keep in mind that we are not attorneys, and this is not presented as legal advice.
-Under HB 572, the HOA could place a lien against the property for any dues or expenses that remain unpaid 10 days after the due date.
-HOA’s could pursue liens for past-due amounts, plus interest, late fees, assessments, collection costs, legal fees and court costs, as well as anything else provided for within the legislation and the HOA’s declarations and bylaws. These amounts can keep growing until the matter is settled.
-The lien would remain valid for 5 years from the date of filing.
-The HOA lien may be foreclosed in the same manner as a mortgage on real property in an action brought by the owners association. The HOA may also bid on the property it is foreclosing on.
-Having a grievance against your HOA association is not a legal defense, and does not interfere with the HOA lien rights proposed under HB 572.
Bear in mind that if you have a mortgage on your home, your mortgage servicer is likely to escrow your HOA fees, or step in and pay them rather than allow an HOA foreclosure to occur. However, Ohio homebuyers need to understand that the rules and fees of an HOA are not subject to debate!
Even if you are current on your HOA dues, breaking an association rule – intentionally or not – could set off a chain reaction of daily fines, enforcement activity, and other punitive costs.
We are not taking a stance on HB 572 one way or the other. We anticipate that lenders could be concerned about the growing power of HOA’s, which in turn, may affect how lenders calculate loan risk in the future. So far, 22 states have passed legislation granting enhanced legal recourse for HOA’s. Ohio is among a number of states considering similar measures.
When you are buying a home in Metro Columbus, it’s essential to review the HOA documentation to understand your rights and responsibilities – as well as the financial condition of the association.
One of the tools we provide to our Buyer-Clients is a 14-point association checklist. We’ll make sure you are provided with the association bylaws, rules and regulations, plus the financial statements and disclosures. We also make sure your purchase offer is subject to your review and approval of this information. Remember, you’re not just buying the home, you’re buying the association that comes with it!
As your Exclusive Buyer’s Broker, we serve your best interests at all times. Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
