AMENDMENTS EVERY BOARD SHOULD IMMEDIATELY RECORD

If the statute grants a power but the current declaration is silent, the board should amend the declaration to bring it “into compliance” with the statute. Declarations are initially drafted by the developer’s attorney and may differ widely from one property to another. There is no standard declaration throughout the state. Even two associations physically located side-by-side and that had the same developer could have drastically different declarations. As a result, each declaration must be reviewed separately to determine if it contains provisions and/or powers covered by the new legislation.

Over and over again, Ohio’s new condominium legislation indicates “unless otherwise provided in the declaration or bylaws.” If a provision or power is covered in the current documents, the current documents generally control and may only be changed by a seventy-five percent (75%) ownership amendment vote. If, on the other hand, the current documents are silent, the board may amend. A notable exception would be if the current documents attempt to provide an authority that the statute expressly prohibits. As an example, a very limited number of associations have governing documents that attempt to bestow on an owner the authority to build additions on the unit into the common areas. Such authority has never existed (even if in the documents) in that it is contrary to current Ohio statutory and case law. This restriction against an owner building an addition has been reinforced and clarified by Ohio Revised Code 5311.04(G), which mandates that such additions require unanimous approval of all owners.

A list with twenty-one (21) separate board powers is now found at 5311.081(B). Generally, with the exception of the items listed below, the governing documents of most associations already bestow many of these twenty-one powers. Prior to filing a board amendment, a thorough check of current governing documents should be completed to verify that the twenty-one board powers are contained therein. If not, these board powers should be amended into the association’s governing documents. Simply amending in the entire list of twenty-one powers or amending in a simple reference to all the powers could cause contradictions and invalidate the entire amendment.

Ohio’s new condominium statute provides several new opportunities and bestows an extensive list of powers on the board. Most boards should immediately amend their documents, which can be done without an ownership vote, to include:

• Enforcement Assessments
  • 5311.081(C) establishes the right of a board to levy enforcement assessments for rule violations. Ohio law was previously silent on this ability of a board to put “teeth” into rule enforcement.
• Lien for Late Fees and Enforcement Assessments
  • 5311.18(A)(1) permits a condominium lien to be filed not only for past due maintenance fees and assessments, but also for outstanding interest, late fees, enforcement assessments, collection costs, and attorney fees. It makes no sense to levy enforcement assessments and then not be able to collect them. This part of the law puts the “bite” into the “teeth.”
• Association May Evict Tenants
  • 5311.19(B)(1) authorizes the association to evict tenants who are in violation of the governing documents or restrictions, so long as the unit owner is provided with at least ten days (10) written notice of the intended eviction action. The costs of eviction, including reasonable attorney fees, shall be charged to the unit owner and shall constitute a special assessment against the unit owner.
• Application of Payments
  • 5311.18(B)(2) indicates that the association is to credit a past due owner’s payment in a specific order with interest, late charges and collection costs being paid first. This provision rids the association of carrying unpaid late charges or legal fees for years and years.
• Suspend Use and Voting Privileges of Delinquent Owners
  • 5311.081(B)(18) authorizes the board to suspend the voting privileges and use of recreational facilities, such as swimming pools and party rooms, when an owner is more than thirty (30) days delinquent.
• Charges for Copying/Resale Certificates
  • 5311.081(B)(15) permits the board to charge owners for copies of governing documents or resale certificates. Additional work is required by the board and/or management company for resale certificates and this law allows the charge to be assessed to the owner.
• Additional Board Powers Not Addressed in Declaration and Bylaws
  • 5311.081(B)(1) through (21) contains a listing of board powers which should be included if the current governing documents are silent as to that specific power.

ADDITIONAL AMENDMENTS

If a board is amending their documents for any of the items previously listed, no harm is done by also amending in the following provisions. These provisions may also be added without an ownership vote as they are now automatically in effect as a result of the new legislation. However, a board would be updating their documents and resolving potential language conflicts by recording an amendment that adds the following provisions to their current documents:

• Owner Information to Board
  • 5311.09(A)(2) mandates that within thirty (30) days of ownership, the owner must notify the association of the home and business mailing addresses, and the home and business telephone numbers of the unit owner and all occupants of the unit, and the name, business address, and business telephone number of any person who manages the owner’s unit as an agent of that owner.
• Spouse on Board
  • 5311.08(A)(1) permits not only the title holder, but also the spouse of an owner, to serve on the board. This new legislation clarifies a long-running debate in Ohio.
• Electronic Meetings
  • 5311.08(4)(a) indicates that a meeting of the board may be held by any method of communication, including electronic or telephonic communication, provided that each member of the board can hear, participate, and respond to every other member of the board.
• Board May Retain Common Profits/Apply Toward Reserves
  • 5311.21 permits the association to retain common profits at year-end and apply them toward reserves.

Subsequent to recording, a copy of the amendments must be provided to all owners.


OWNERSHIP VOTES

Not all provisions of the new legislation can be simply amended in if your declaration is silent. Four items specifically require ownership votes, those being:

• Purchase Property
  • 5311.04(H) permits the association to purchase or sell property that is not a part of the condominium property with the approval of seventy-five percent (75%) of the voting power. As an example, if the association desires to purchase land for additional parking, seventy-five percent (75%) approval from the membership is needed.
• Two-Tiered Assessments
  • 5311.041(B)(1) permits the association to assess owners evenly for a number of non-building expenses so long as the declaration is amended by ninety percent (90%) of the voting power. Costs that may be split evenly include expenses that arise out of the administration, operation, maintenance, repair, and replacement of security, telecommunication, rubbish removal, roads, entrances, recreation facilities, landscaping, grounds care, legal, accounting, and management expenses.
• Assignment of Future Income
  • 5311.081(B)(17) permits the board to assign the common assessments, or other future income, to a lender as security for a loan “to the extent provided in the declaration or bylaws.” This provision is unique. While many association documents permit borrowing, few specifically authorize the assignment of future income, which is what virtually all lenders require. In that the assignment of future income saddles future boards, if the declaration and bylaws are silent on this authority, a seventy-five percent (75%) amendment vote is required.
• Enclosure of Limited Common Elements
  • 5311.04(G) authorizes the board to permit unenclosed, open-air patios and decks on limited common areas and mandates that the construction of an addition to or an expansion of a unit into limited common elements or common elements may not be authorized without the consent of all (100%) of the unit owners.