Planned Communities in Ohio

(Published/Edited with Permission from Chicago Title Cleveland)

Amended Substitute Senate Bill 187 (to be ORC Chapter 5312) takes effect on September 10, 2010. The purpose of the legislation is to create a uniform framework for the operation and management of planned communities in Ohio and provide consumer protections to homeowners through statutorily goverened homeowners associations.

The following presents some key points of the legislation:

- Ohio Revised Code Section 5312.02 (D) provides that in addition to the recording of a declaration in a planned community the bylaws must also be recorded. If the planned community is in existence and the bylaws have been adopted prior to September 10, 2010 they must be recorded within 180 days. If the bylaws are adopted after the effective date of this legislation (September 10) they must be recorded within 90 days after adoption and any amendment to the bylaws must be recorded within 60 days after adoption.

- Ohio Revised Code Section 5312.05 provides that unless specified in the declaration or bylaws, the owners may amend the declaration with 75% consent of all owners and no amendment is effective until it is recorded with the Recorder's Office. Any vote to terminate the declaration or dissolve the planned community requires the unanimous consent of the owners.

- Ohio Revised Code Section 5312 12(A) provides the Owner's Association with the ability to file a lien for unpaid assessments or specifically defined charges. The lien is effective on the date the certificate of lien is filed with the county recorder's office and is valid for five (5) years from the date of filing.

ORC Section 5312.02(D) may cause some problems for developers of older planned communities who either do not have an original copy of their bylaws or whose bylaws have not been executed in recordable form with appropriately acknowledged signatures. Chicago Title personnel questioned a number of county recorder's offices on this point and several (Cuyahoga, Medina, Summit, Trumbull, Wayne and Stark) have suggested that an Affidavit on Facts with a copy of the bylaws attached and a legal description of the planned community would be sufficient for recording purposes. However, it would be best to check with the county recorder before attempting to file bylaws if they are not in recordable form. As we hear back from more counties we will keep you posted on their requirements.

In addition to the foregoing, other consumer protective provisions of the Act include: requirements for annual elections of board members and officers; rights of homeowners to inspect, examine and copy books, records and minutes of the homeowner’s association; and the requirement of homeowner’s associations to adopt annual budgets. For a full copy of Ohio SB 187, go to: www.legislature.state.oh.us/bills.cfm?ID=128_SB_187_I.

Chicago Title has been serving Ohio for over 50 years. Through their nationwide network, they provide title insurance, underwriting, escrow and closing services to every spectrum of the real estate industry. For more information, visit them at www.cticnow.com.