As Passed by the Senate

128th General Assembly
Regular Session
2009-2010
Am. S. B. No. 187


Senator Seitz 

Cosponsors: Senators Sawyer, Cates, Gillmor, Grendell, Kearney, Miller, R., Patton, Harris, Hughes 



A BILL
To enact sections 5312.01 to 5312.15 of the Revised 1
Code to establish the Ohio Planned Community Law.2


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 5312.01, 5312.02, 5312.03, 5312.04, 3
5312.05, 5312.06, 5312.07, 5312.08, 5312.09, 5312.10, 5312.11, 4
5312.12, 5312.13, 5312.14, and 5312.15 of the Revised Code be 5
enacted to read as follows:6

       Sec. 5312.01. As used in this chapter:7

       (A) "Assessment" means the liability for an expense that is 8
allocated to a lot in a planned community.9

       (B) "Bylaws" means an instrument filed with the declaration 10
that provides for the operation of the owners association. 11
"Bylaws" also is referred to as "regulations" pursuant to Chapter 12
1702. of the Revised Code.13

       (C) "Common element" means any property in a planned 14
community that the owners association holds in fee or has use of 15
pursuant to a lease or easement.16

       (D) "Common expense" means any expense or financial liability 17
of the owners association, including allocations the association 18
designates for reserves.19

       (E) "Declarant" means the owner of property who executes and 20
records a declaration that the property is a planned community.21

       (F) "Declarant control" means the period of time in which the 22
declarant controls the owners association by appointing or 23
electing the members of the association's board of directors.24

       (G) "Declaration" means an instrument a property owner 25
executes and records to declare that the property is a planned 26
community subject to the provisions of this chapter.27

       (H) "Dwelling unit" means a detached building or the portion 28
of a building that is designed and intended for use and occupancy 29
for residential purposes by a single household or family.30

       (I) "Limited common element" means a common element that a 31
declaration designates as reserved for use by a certain lot or 32
lots, to the exclusion of other lots.33

        (J) "Lot" means a parcel or tract of land that is formed when 34
a larger parcel of land is subdivided pursuant to Chapter 711. of 35
the Revised Code, has a separate parcel number assigned by the 36
county auditor, and is occupied or intended to be occupied by a 37
dwelling unit.38

       (K) "Owner" means a person who owns a lot in a planned 39
community. "Owner" does not include any person that has an 40
interest in a lot solely as security for an obligation.41

       (L) "Owners association" means an organization that is 42
comprised of owners of lots in a planned community and that is 43
responsible for the administrative governance, maintenance, and 44
upkeep of the planned community.45

       (M) "Planned community" means a community comprised of 46
individual lots for which a deed, common plan, or declaration 47
requires any of the following:48

       (1) That owners become members of an owners association that 49
governs the community;50

       (2) That owners or the owners association holds or leases 51
property or facilities for the benefit of the owners;52

       (3) That owners support by membership or fees, property or 53
facilities for all owners to use.54

       A condominium property as defined in section 5311.01 of the 55
Revised Code is not a "planned community."56

       Sec. 5312.02. (A) Any planned community in this state is 57
subject to this chapter. No person shall establish a planned 58
community unless that person files and records a declaration and 59
bylaws for that planned community in the office of the recorder of 60
the county or counties in which the planned community is located.61

       (B) Any declaration for a planned community shall be 62
accompanied by bylaws that provide for the operation of the 63
planned community. The declaration and bylaws shall provide for 64
all of the following:65

       (1) The election of the board of directors of the owners 66
association;67

       (2) The number of persons constituting the board;68

       (3) The terms of the directors, with not less than one-fifth 69
to expire annually;70

       (4) The powers and duties of the board;71

       (5) The method of removal of directors from office;72

       (6) Whether the services of a manager or managing agent may 73
be engaged;74

       (7) The method of amending the declaration and bylaws;75

       (8) The time and place for holding meetings and the manner of 76
and authority for calling, giving notice of, and conducting 77
meetings;78

       (9) The common expenses for which assessments may be made and 79
the manner of collecting from the owners their respective shares 80
of the common expenses;81

       (10) Any other matters the original declarant or the owners 82
association deem necessary and appropriate.83

       (C) Nothing in this chapter invalidates any provision of a 84
document that governs a planned community if that provision was in 85
the document at the time the document was recorded and the 86
document was recorded prior to the original effective date of this 87
chapter.88

       Sec. 5312.03. (A)(1) An owners association shall administer a 89
planned community, and a board of directors the owners elect from 90
among the owners and their spouses shall exercise all power and 91
authority of the owners association. If an owner is not an 92
individual, any principal, member of a limited liability company, 93
partner, director, officer, trustee, or employee of the owner may 94
be elected to the board.95

       (2) Unless otherwise provided, a board of directors may carry 96
out any action this chapter requires or allows an owners 97
association to take, subject to any vote required of the owners.98

       (B) A declarant shall establish an owners association not 99
later than the date upon which the first lot in the planned 100
community is conveyed to a bona fide purchaser for value. The 101
owners association shall be organized as a nonprofit corporation 102
pursuant to Chapter 1702. of the Revised Code.103

       (C)(1) If provided in the declaration, a declarant may 104
control the owners association for the period of time the 105
declaration specifies. During the time of declarant control, the 106
declarant or the declarant's designee may appoint and remove the 107
members of the board. The period of declarant control shall 108
terminate not later than the time at which all of the lots have 109
been transferred to owners.110

       (2) Not later than the termination of any period of declarant 111
control, the owners shall elect a board of directors comprised of 112
the number of members the declaration or bylaws specify.113

       Sec. 5312.04. (A) A board of directors of an owners 114
association shall elect officers from the members of the board, to 115
include a president, secretary, treasurer, and other officers as 116
the board designates.117

       (B) A board may act in all instances on behalf of an 118
association unless otherwise provided in this chapter, the 119
declaration, or bylaws. The board may appoint persons to fill 120
vacancies in its membership for the unexpired portion of any term.121

       (C) Except during a period of declarant control, the board 122
shall call a meeting of the owners association at least once each 123
year. Special meetings may be called by the president, a majority 124
of the board, owners representing fifty per cent of the voting 125
power in the organization, or any lower share of the voting power 126
as the declaration or bylaws specify.127

       (D) The board may hold a meeting by any method of 128
communication, including electronic or telephonic communication, 129
provided that each member of the board can hear or read in real 130
time and participate and respond to every other member of the 131
board.132

       (E) In lieu of conducting a meeting, the board may take an 133
action with the unanimous written consent of the members of the 134
board. Any written consent shall be filed with the minutes of the 135
meetings of the board.136

       (F) No owner other than a director may attend or participate 137
in any discussion or deliberation of a meeting of the board of 138
directors unless the board expressly authorizes that owner to 139
attend or participate.140

       (G) The board of directors of an owners association shall 141
comply with all applicable state and federal laws concerning 142
prohibitions against discrimination on the basis of race, color, 143
religion, sex, military status, national origin, disability, age, 144
or ancestry, including, but not limited to, Chapter 4112. of the 145
Revised Code. No private right of action additional to those 146
conferred by the applicable state and federal anti-discrimination 147
laws is conferred on any aggrieved individual by the preceding 148
sentence.149

       Sec. 5312.05. (A) Unless otherwise specified in the 150
declaration or bylaws, the owners may amend the declaration and 151
bylaws by the consent of seventy-five per cent of the owners, 152
either in writing or in a meeting called for that purpose. No 153
amendment to the declaration or bylaws is effective until filed in 154
the office of the county recorder.155

       (B) A vote to terminate the applicability of the declaration 156
and to dissolve the planned community requires the unanimous 157
consent of owners.158

       Sec. 5312.06. (A) Unless otherwise provided in the 159
declaration or bylaws, the owners association, through its board 160
of directors, shall do both of the following:161

       (1) Annually adopt and amend an estimated budget for revenues 162
and expenditures. Any budget shall include reserves in an amount 163
adequate to repair and replace major capital items in the normal 164
course of operations without the necessity of special assessments, 165
unless the owners, exercising not less than a majority of the 166
voting power of the owners association, waive the reserve 167
requirement annually.168

       (2) Collect assessments for common expenses from owners in 169
accordance with section 5312.10 of the Revised Code.170

       (B) Commencing not later than the time of the first 171
conveyance of a lot to a person other than a declarant, the owners 172
association shall maintain all of the following to the extent 173
reasonably available and applicable:174

       (1) Property insurance on the common elements;175

       (2) Liability insurance pertaining to the common elements;176

       (3) Directors and officers liability insurance.177

       (C) The owners association shall keep all of the following:178

       (1) Correct and complete books and records of account that 179
specify the receipts and expenditures relating to the common 180
elements and other common receipts and expenses;181

       (2) Records showing the collection of the common expenses 182
from the owners;183

       (3) Minutes of the meetings of the association and the board 184
of directors;185

       (4) Records of the names and addresses of the owners.186

       (D) An owners association, through its board of directors, 187
may do any of the following:188

       (1) Hire and fire managing agents, attorneys, accountants, 189
and other independent professionals and employees that the board 190
determines are necessary or desirable in the management of the 191
property and the association;192

       (2) Commence, defend, intervene in, settle, or compromise any 193
civil, criminal, or administrative action or proceeding that is in 194
the name of, or threatened against, the association, the board of 195
directors, or the property, or that involves two or more owners 196
and relates to matters affecting the property;197

       (3) Enter into contracts and incur liabilities relating to 198
the operation of the property;199

       (4) Enforce all provisions of the declaration, bylaws, 200
covenants, conditions, restrictions, and articles of incorporation 201
governing the lots, common elements, and limited common elements;202

       (5) Adopt and enforce rules that regulate the maintenance, 203
repair, replacement, modification, and appearance of common 204
elements, and any other rules as the declaration provides;205

       (6) Acquire, encumber, and convey or otherwise transfer real 206
and personal property, subject to section 5312.10 of the Revised 207
Code;208

       (7) Hold in the name of the owners association the real 209
property and personal property;210

       (8) Grant easements, leases, licenses, and concessions 211
through or over the common elements;212

       (9) Levy and collect fees or other charges for the use, 213
rental, or operation of the common elements or for services 214
provided to owners;215

       (10) Pursuant to section 5312.11 of the Revised Code, levy 216
the following charges and assessments:217

       (a) Interest and charges for the late payment of assessments;218

       (b) Returned check charges;219

       (c) Enforcement assessments for violations of the 220
declaration, the bylaws, and the rules of the owners association;221

       (d) Charges for damage to the common elements or other 222
property.223

       (11) Adopt and amend rules that regulate the collection of 224
delinquent assessments and the application of payments of 225
delinquent assessments;226

       (12) Impose reasonable charges for preparing, recording, or 227
copying the declaration, bylaws, amendments to the declaration and 228
bylaws, resale certificates, or statements of unpaid assessments;229

       (13) Authorize entry to any portion of the planned community 230
by designated individuals when conditions exist that involve an 231
imminent risk of damage or harm to common elements, another 232
dwelling unit, or to the health or safety of the occupants of that 233
dwelling unit or another dwelling unit;234

       (14) Subject to division (A)(1) of section 5312.09 of the 235
Revised Code, borrow money and assign the right to common 236
assessments or other future income to a lender as security for a 237
loan to the owners association;238

       (15) Suspend the voting privileges and use of recreational 239
facilities of an owner who is delinquent in the payment of 240
assessments for more than thirty days;241

       (16) Purchase insurance and fidelity bonds the directors 242
consider appropriate and necessary;243

       (17) Invest excess funds in investments that meet standards 244
for fiduciary investments under the laws of this state;245

       (18) Exercise powers that are any of the following:246

       (a) Conferred by the declaration or bylaws;247

       (b) Necessary to incorporate the owners association as a 248
nonprofit corporation;249

       (c) Permitted to be exercised in this state by a nonprofit 250
corporation;251

       (d) Necessary and proper for the government and operation of 252
the owners association.253

       Sec. 5312.07. (A) Unless otherwise prohibited by this 254
section, any owner may examine and copy the books, records, and 255
minutes of the owners association that division (C) of section 256
5312.06 of the Revised Code describes, pursuant to reasonable 257
standards set forth in the declaration, bylaws, or rules the board 258
promulgates. The standards may include, but are not limited to, 259
standards governing the type of documents that are subject to 260
examination and copying, the times and locations at which those 261
documents may be examined or copied, and the specification of a 262
reasonable fee for copying the documents.263

       (B) Unless approved by the board of directors, an owner may 264
not examine or copy any of the following from books, records, and 265
minutes:266

       (1) Information that pertains to property-related personnel 267
matters;268

       (2) Communications with legal counsel or attorney work 269
product pertaining to potential, threatened or pending litigation, 270
or other property-related matters;271

       (3) Information that pertains to contracts or transactions 272
currently under negotiation, or information that is contained in a 273
contract or other agreement containing confidentiality 274
requirements and that is subject to those requirements;275

       (4) Information that relates to the enforcement of the 276
declaration, bylaws, or rules of the owners association against 277
other owners;278

       (5) Information, the disclosure of which is prohibited by 279
state or federal law.280

       Sec. 5312.08. (A) Unless otherwise provided by the 281
declaration, the owners association is responsible for reasonable 282
maintenance, repair, and replacement of the common elements, and 283
each owner is responsible for maintenance, repair, and replacement 284
of the owner's lot and improvements to that lot, including the 285
dwelling unit and the utility lines serving that dwelling unit.286

       (B) An owner shall permit agents or employees of the owners 287
association and other owners access through the owner's lot and 288
dwelling unit for the purpose of fulfilling the association's 289
duties and obligations. Any damage to the common elements, lot, or 290
dwelling unit due to that access is the responsibility of the 291
owner that caused the damage or the owners association if it is 292
responsible for the damage. That owner, or the owners association, 293
is liable for the prompt repair of any damage and, if not 294
repairable, for the value of the damaged property or item as it 295
existed immediately prior to that damage.296

       Sec. 5312.09. (A)(1) The owners association may not assign 297
the right to common assessments, or the future income from those 298
assessments, or convey any fee interest or any security interest 299
in any portion of the common elements unless the declaration 300
specifically provides for such a conveyance or seventy-five per 301
cent of the voting power of the owners association, or any larger 302
percentage the declaration specifies, approves the conveyance.303

       (2) The owners association may not convey any fee interest in 304
a limited common element or subject a limited common element to a 305
security interest without the approval of all of the owners of the 306
lots to which the limited common element is allocated. Any 307
proceeds of the conveyance of a limited common element are an 308
asset of the owners association.309

       (B) No contract to convey or subject a common element or a 310
limited common element to a security interest is enforceable 311
against the owners association unless it complies with division 312
(A) of this section. The board of directors, on behalf of the 313
owners association, has all powers necessary and appropriate to 314
effect a conveyance or encumbrance that division (A) of this 315
section permits, including the power to execute a deed or other 316
instrument.317

       Sec. 5312.10. (A)(1) In accordance with its declaration, all 318
costs the owners association incurs in the administration, 319
governance, and maintenance of a planned community are common 320
expenses. Unless otherwise provided in the declaration, all costs 321
of the administration, operation, maintenance, repair, and 322
replacement of the common elements are common expenses.323

       (2) The common expense liability of each lot shall be 324
allocated in accordance with the allocation set forth in the 325
declaration. If the declaration does not establish any allocation, 326
the common expense liability shall be allocated equally among all 327
the lots.328

       (3) The board of directors shall assess the common expense 329
liability for each lot at least annually, based on a budget the 330
board adopts at least annually.331

       (B) The board shall charge interest on any past due 332
assessment or installment at the rate the board establishes, not 333
to exceed any maximum rate permitted by law.334

       (C)(1) The board may not charge assessments for common 335
expenses unless the declaration provides for or contemplates the 336
charging of such assessments.337

       (2) The board may not increase any assessment for common 338
expenses when the declaration limits the amount of such 339
assessments unless the owners amend the declaration as provided in 340
division (A) of section 5312.05 of the Revised Code to allow the 341
increased amount.342

       Sec. 5312.11. (A) An owners association may assess an 343
individual lot for any of the following:344

       (1) Enforcement assessments and individual assessments for 345
utility service that are imposed or levied in accordance with the 346
declaration, as well as expenses the board incurs in collecting 347
those assessments;348

       (2) Costs of maintenance, repair, or replacement incurred due 349
to the willful or negligent act of an owner or occupant of a lot 350
or their family, tenants, guests, or invitees, including, but not 351
limited to, attorney's fees, court costs, and other expenses;352

       (3) Costs associated with the enforcement of the declaration 353
or the rules and regulations of the owners association, including, 354
but not limited to, attorney's fees, court costs, and other 355
expenses;356

       (4) Costs or charges the declaration or bylaws permit.357

       (B) Unless otherwise provided by the declaration, bylaws, or 358
rules, the owners association shall credit any amount it receives 359
from a lot owner pursuant to this section in the following order:360

       (1) To interest owed to the owners association;361

       (2) To administrative late fees or enforcement assessments 362
owed to the owners association;363

       (3) To collection costs, attorney's fees, and paralegal fees 364
the owners association incurred in collecting the assessment;365

       (4) To the oldest principal amounts the owner owes to the 366
owners association for the common expenses chargeable against the 367
dwelling unit or lot.368

       (C) Prior to imposing a charge for damages or an enforcement 369
assessment pursuant to this section, the board of directors shall 370
give the owner a written notice that includes all of the 371
following:372

       (1) A description of the property damage or violation;373

       (2) The amount of the proposed charge or assessment;374

       (3) A statement that the owner has a right to a hearing 375
before the board to contest the proposed charge or assessment;376

       (4) A statement setting forth the procedures to request a 377
hearing;378

       (5) A reasonable date by which the owner must cure a 379
continuing violation to avoid the proposed charge or assessment, 380
if such an opportunity to cure is applicable.381

       (D)(1) To request a hearing, the owner shall deliver a 382
written notice to the board not later than the tenth day after 383
receiving the notice this division requires. If the owner fails to 384
make a timely request for a hearing, the right to that hearing is 385
waived, and the board immediately may impose a charge for damages 386
or an enforcement assessment pursuant to this section.387

       (2) If an owner requests a hearing, at least seven days prior 388
to the hearing the board shall provide the owner with a written 389
notice that includes the date, time, and location of the hearing.390

       (3) The board shall not levy a charge or assessment before 391
holding any hearing requested pursuant to this section.392

       (4) Within thirty days following a hearing at which the board 393
imposes a charge or assessment, the owners association shall 394
deliver a written notice of the charge or assessment to the owner.395

       (5) Any written notice that this section requires shall be 396
delivered to the owner or any occupant of the dwelling unit by 397
personal delivery, by certified mail, return receipt requested, or 398
by regular mail.399

       Sec. 5312.12. (A) The owners association has a lien upon the 400
estate or interest in any lot for the payment of any assessment or 401
charge levied in accordance with section 5312.11 of the Revised 402
Code, as well as any related interest, administrative late fees, 403
enforcement assessments, collection costs, attorney's fees, and 404
paralegal fees, that are chargeable against the lot and that 405
remain unpaid ten days after any portion has become due and 406
payable.407

       (B) All of the following apply to a lien charged against a 408
property pursuant to this section:409

       (1) The lien is effective on the date that a certificate of 410
lien is filed for record in the office of the recorder of the 411
county or counties in which the lot is situated, pursuant to 412
authorization by the board of directors of the owners association. 413
The certificate shall contain a description of the lot, the name 414
of the record owner of the lot, and the amount of the unpaid 415
portion of the common expenses. It shall be subscribed to by the 416
president of the board or other designated representative of the 417
owners association.418

       (2) The lien is a continuing lien upon the lot against which 419
each assessment is made, subject to automatic subsequent 420
adjustments reflecting any additional unpaid interest, 421
administrative late fees, enforcement assessments, collection 422
costs, attorney's fees, paralegal fees, and court costs.423

       (3) The lien is valid for a period of five years from the 424
date of filing, unless it is sooner released or satisfied in the 425
same manner provided by law for the release and satisfaction of 426
mortgages on real property or unless it is discharged by the final 427
judgment or order of a court in an action brought to discharge the 428
lien as provided in this section.429

       (4) The lien is prior to any lien or encumbrance subsequently 430
arising or created, except liens for real estate taxes and 431
assessments of political subdivisions and liens of first mortgages 432
that have been filed for record prior to the recording of the 433
lien, and may be foreclosed in the same manner as a mortgage on 434
real property in an action brought by the owners association.435

       (C)(1) In any foreclosure action that the holder of a lien 436
commences, the holder shall name the owners association as a 437
defendant in the action. The owners association or the holder of 438
the lien is entitled to the appointment of a receiver to collect 439
rental payments due on the property. Any rental payment a receiver 440
collects during the pendency of the foreclosure action shall be 441
applied first to the payment of the portion of the common expenses 442
chargeable to the lot during the foreclosure action.443

       (2) Unless prohibited by the declaration or the bylaws, 444
following any foreclosure action, the owners association or an 445
agent the board authorizes is entitled to become a purchaser at 446
the foreclosure sale.447

       (3) A mortgage on a lot may contain a provision that secures 448
the mortgagee's advances for the payment of the portion of the 449
common expenses chargeable against the lot upon which the 450
mortgagee holds the mortgage.451

       (4) In any foreclosure action, it is not a defense, set off, 452
counterclaim, or crossclaim that the owners association has failed 453
to provide the owner with any service, goods, work, or material, 454
or failed in any other duty.455

       (D) An owner may commence an action for the discharge of the 456
lien in the court of common pleas of the county in which all or a 457
part of the property is situated if the owner believes that the 458
common expense liability for which the owners association filed a 459
certificate of lien was improperly charged. In the action, if it 460
is finally determined that the portion of the common expense 461
liability was improperly charged to the owner or the lot, the 462
court shall enter an order that it determines to be just, which 463
may provide for a discharge of record of all or a portion of the 464
lien.465

       Sec. 5312.13. All owners, residents, tenants, and other 466
persons lawfully in possession and control of any part of an 467
ownership interest shall comply with any covenant, condition, and 468
restriction set forth in any recorded document to which they are 469
subject, and with the bylaws and the rules of the owners 470
association, as lawfully amended. Any violation is grounds for the 471
owners association or any owner to commence a civil action for 472
damages, injunctive relief, or both, and an award of court costs 473
and reasonable attorney's fees in both types of action.474

       Sec. 5312.14. In any action relating to the common elements 475
or to any right, duty, or obligation possessed or imposed upon the 476
owners association by statute or otherwise, the owners association 477
may sue or be sued as a separate legal entity. Service of summons 478
or other process may be made upon the owners association by 479
serving the process personally upon the president of the board of 480
directors or the person named as statutory agent of the 481
association if it is an incorporated entity. Any action brought by 482
or on behalf of the owners association shall be pursuant to 483
authority granted by the board of directors.484

       Sec. 5312.15.  This chapter shall be construed to establish a 485
uniform framework for the operation and management of planned 486
communities in this state and to supplement any planned community 487
governing document that is in existence on the effective date of 488
this chapter. In the event of a specific conflict between this 489
chapter and express requirements or restrictions in such a 490
governing document, the governing document shall control. This 491
chapter shall control if any governing document is silent with 492
respect to any provision of this chapter.493