Ohio condo liens: what R.C. 5311.18 lets an association foreclose

Read your own declaration before you read the statute. Chapter 5311 governs condominium units and Chapter 5312 governs planned community lots, and Ohio wrote the two lien sections differently on exactly this point. R.C. 5312.12(A) states flatly that the owners association has a lien. R.C. 5311.18(A)(1) states that the unit owners association has one "Unless otherwise provided by the declaration or the bylaws." A planned community cannot contract out of its lien; a condominium can. The current text of R.C. 5311.18 took effect September 13, 2022 through Senate Bill 61 of the 134th General Assembly, and the only other version the Legislative Service Commission publishes is the July 20, 2004 text from House Bill 135.

The same drafting difference reaches what the lien covers. In a planned community every listed charge is inside the lien automatically. In a condominium, division (A)(1)(a) puts the portion of the common expenses chargeable against the unit inside it unconditionally, but division (A)(1)(b) attaches interest, administrative late fees, enforcement assessments, collection costs, attorney's fees and paralegal fees only where the association actually incurs them and only "if authorized by the declaration, the bylaws, or the rules of the unit owners association." A condominium board that never adopted a late fee rule has no late fee to lien for.

Mechanically the lien arises ten days after any portion of the charge becomes due, but division (A)(3) makes it effective only on the date a certificate of lien is filed with the recorder of each county in which the condominium property is situated, pursuant to board authorization. The certificate must describe the unit, name the record owner, state the unpaid portion of the common expenses and, subject to subsequent adjustments, any unpaid interest, administrative late fees, enforcement assessments, collection costs, attorney's fees and paralegal fees, and be subscribed by the president or other designated representative of the association. Division (A)(4) gives that filing five years of life unless it is released, satisfied, or discharged by final judgment.

The crediting order in division (A)(2) is where a condominium owner and a planned community owner are treated differently in cash terms. R.C. 5311.18(A)(2) sends a payment first to interest, second to administrative late fees, third to collection costs and attorney's and paralegal fees, and fourth to the principal owed for common expenses or penalty assessments. R.C. 5312.11(B), the planned community rule, sends a payment first to interest, second to administrative late fees or enforcement assessments, third to collection costs and legal fees, and fourth to the oldest principal. So a condominium fine sits down at the fourth tier alongside common expense principal, while a planned community fine is collected at the second. Both orders apply only where the declaration, bylaws or rules are silent.

On priority the answer is short: Ohio created no super-lien for either kind of association. Division (B)(1) makes the condominium lien prior only to encumbrances subsequently arising or created, and excepts real estate taxes, assessments of political subdivisions, and liens of first mortgages that have been filed for record. Note the wording, because the two chapters differ again: R.C. 5312.12(B)(4) excepts first mortgages filed for record "prior to the recording of the lien," and the condominium text carries no such timing qualifier.

What the condominium chapter has instead is a harder foreclosure. Under division (B)(2) the unit owner, as defendant, shall be required to pay a reasonable rental for the unit while the action is pending, whether the association brought it or a mortgagee did, and the association or the lienholder is entitled to a receiver, with each rental payment applied first to the common expenses chargeable to the unit during the case. R.C. 5312.12(C)(1) gives a planned community the receiver but imposes no reasonable rental duty on the lot owner. Division (B)(3) requires any foreclosing lienholder to name the association as a defendant. Division (B)(4) lets the association bid and become the purchaser at the sale unless the declaration or bylaws prohibit it, and division (B)(5) allows a mortgage to secure the mortgagee's advances for common expenses. Then division (B)(6) closes the door on the argument most owners want to make: it is not a defense, set off, counterclaim or crossclaim that the association failed to provide any service, goods, work or material, or failed in any other duty. Chapter 5312 has no equivalent sentence, so withholding assessments over a leaking roof is a worse strategy in an Ohio condominium than in an Ohio planned community.

Fines can be liened, but only after a fixed procedure. R.C. 5311.081(B)(12) lets the board impose reasonable enforcement assessments for violations of the declaration, the bylaws and the rules, and division (C) conditions that power. The board must first send written notice, which may be electronic mail to an address the owner previously provided in writing, describing the damage or violation, stating the proposed amount, stating the right to a hearing before the board, setting out how to request one, and giving a reasonable date to cure. The owner has until the tenth day after receiving it to deliver a written hearing request, and missing that waives the hearing and lets the board levy immediately. If a hearing is requested the board must give seven days written notice of it, may not levy before holding it, and must deliver written notice of the charge within thirty days after. Division (C)(6) requires those notices to go by personal delivery, by certified mail with return receipt requested, or by regular mail. Two non-lien pressure points sit in the same section: division (B)(18) lets the board suspend voting privileges and use of recreational facilities once an owner is more than thirty days delinquent, and division (B)(14) permits rules terminating utility or other service only for a delinquent commercial unit, not a residential one.

An owner who thinks the charge was wrong sues under division (C) of R.C. 5311.18, in the common pleas court of the county where all or part of the condominium property sits, and the court enters the order it determines to be just, which may provide for a discharge of record of all or a portion of the lien. That subsection says nothing about fees, while the planned community counterpart at R.C. 5312.12(D) expressly permits an award of attorney's fees to the owner, so an Ohio condominium owner who wins a discharge action still pays their own lawyer under this section. Fees are available on a different route: R.C. 5311.19(A) allows the association or any unit owner to sue for damages, injunctive relief, or both over a violation of the declaration, bylaws or rules, with an award of court costs and reasonable attorney's fees in both types of action. That statute cuts the other way too, since R.C. 5311.19(B)(3) charges the cost of an association-initiated tenant eviction, attorney's fees included, to the unit owner as a special assessment and makes it a lien against the offending unit, after at least ten days written notice of the intended eviction action.

If the case reaches a sheriff's sale, general Ohio execution law sets the floor. R.C. 2329.20 bars a sale for less than two-thirds of the appraised value determined under R.C. 2329.17, and where a junior lien is enforced subject to an unaffected prior lien, the court may set a minimum that is not less than two-thirds of the difference between the appraised value and the amount still unpaid on the prior lien. R.C. 2329.33 then lets the debtor redeem at any time before the court confirms the sale, by depositing with the clerk of the court of common pleas the judgment amount plus all costs, including poundage, plus interest at eight per cent per annum on the purchase money from the day of sale.

Nothing shows on a title search until the certificate of lien is filed, so the recording date rather than the missed payment date is the event that matters. After that the balance moves on its own, because the certificate is filed subject to subsequent adjustments for further interest, administrative late fees, enforcement assessments, collection costs and legal fees. The association may then foreclose in the same manner as a mortgage, in an action authorized by its board of directors, and ask for a receiver; the unit owner defendant is required to pay a reasonable rental for the unit while that action is pending, and rent the receiver collects goes first to the common expenses accruing during the case.

C. 18(B)(6) rules out any defense, set off or counterclaim based on the association having failed in a duty. C. 081(C) sequence: the notice with its five required contents, a hearing if the owner asked within ten days, seven days notice of that hearing, no levy before it is held, and written notice of the charge within thirty days after. C. 12(D). An unenforced certificate of lien dies five years after filing.