Bill Text: OH HB572 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To provide that a portion of a condominium or planned community assessment is prior to other liens on condominium units and planned community lots and to provide that a condominum unit owners association lien is a continuing lien.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2014-05-27 - To Judiciary [HB572 Detail]

Download: Ohio-2013-HB572-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 572

Representative Rogers 

Cosponsors: Representatives Sheehy, Mallory 

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A BILL

To amend sections 5311.18 and 5312.12 of the Revised

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Code to provide that a portion of a condominium or

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planned community assessment is prior to other

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liens on condominium units and planned community

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lots and to provide that a condominum unit owners

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association lien is a continuing lien.

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

Section 1.  That sections 5311.18 and 5312.12 of the Revised	7
Code be amended to read as follows:	8

Sec. 5311.18.  (A)(1) Unless otherwise provided by the	9
declaration or the bylaws, the unit owners association has a lien	10
upon the estate or interest of the owner in any unit and the	11
appurtenant undivided interest in the common elements for the	12
payment of any of the following expenses that are chargeable	13
against the unit and that remain unpaid for ten days after any	14
portion has become due and payable:	15

(a) The portion of the common expenses chargeable against the	16
unit;	17

(b) Interest, administrative late fees, enforcement	18
assessments, or any other assessment or charge provided for by	19
this chapter, the declaration, or bylaws and collection costs,	20
attorney's fees, and paralegal fees, and court costs the	21
association incurs if authorized by the declaration, the bylaws,	22
or the rules of the unit owners association and if chargeable	23
against the unit.	24

(2) Unless otherwise provided by the declaration, the bylaws,	25
or the rules of the unit owners association, the association shall	26
credit payments made by a unit owner for the expenses described in	27
divisions (A)(1)(a) and (b) of this section in the following order	28
of priority:	29

(a) First, to interest owed to the association;

30

(b) Second, to administrative late fees owed to the	31
association;	32

(c) Third, to collection costs, attorney's fees, and	33
paralegal fees incurred by the association;	34

(d) Fourth, to the principal amounts the unit owner owes to	35
the association for the common expenses or penalty assessments	36
chargeable against the unit.	37

(3) The lien described in division (A)(1) of this section is	38
effective on the date that a certificate of lien in the form	39
described in division (A)(3) of this section is filed for record	40
in the office of the recorder of the county or counties in which	41
the condominium property is situated pursuant to an authorization	42
given by the board of directors of the unit owners association.	43
The certificate shall contain a description of the unit, the name	44
of the record owner of the unit, and the amount of the unpaid	45
portion of the common expenses and, subject to subsequent	46
adjustments, any unpaid interest, administrative late fees,	47
enforcement assessments, collection costs, attorney's fees, and	48
paralegal fees. The certificate shall be subscribed by the	49
president or other designated representative of the association.	50

(4) The lien described in division (A)(1) of this section is	51
a continuing lien and is subject to automatic subsequent	52
adjustments that reflect any additional unpaid interest,	53
administrative late fees, enforcement assessments, collection	54
costs, attorney's fees, paralegal fees, and court costs.	55

(5) The lien described in division (A)(1) of this section is	56
valid for a period of five years from the date of filing, unless	57
it is sooner released or satisfied in the same manner provided by	58
law for the release and satisfaction of mortgages on real property	59
or unless it is discharged by the final judgment or order of a	60
court in an action brought to discharge the lien as provided in	61
division (C) of this section.	62

(B)(1) The lien described in division (A)(1) of this section	63
is prior to any lien or encumbrance subsequently arising or	64
created except liens for real estate taxes and assessments of	65
political subdivisions and liens of first mortgages that have been	66
filed for record and may be foreclosed in the same manner as a	67
mortgage on real property in an action brought on behalf ofby the	68
unit owners association by the president or other chief officer of	69
the association pursuant to authority given to that individual by	70
the board of directors.	71

(2)(a) The lien described in division (A)(1) of this section,	72
in the amount described in division (B)(2)(b) of this section, is	73
prior to any lien or encumbrance previously arising or created	74
except liens for real estate taxes and assessments of political	75
subdivisions. Following the security interest created by division	76
(B)(2)(a) of this section, the association's lien returns to the	77
priority outlined in division (B)(1) of this section.	78

(b) The security interest created by division (B)(2)(a) of	79
this section shall be in an amount equal to the lesser of the	80
amount of the delinquency or six months of common expense	81
assessments based on the budget adopted by the association for the	82
year in which the foreclosure action against the unit is	83
commenced, plus the association's reasonable attorney's fees,	84
costs, and expenses related to the foreclosure.	85

(3) In a foreclosure action a unit owners association	86
commences pursuant to division (B)(1) of this section or a	87
foreclosure action the holder of a first mortgage or other lien on	88
a unit commences, the owner of the unit, as the defendant in the	89
action, shall be required to pay a reasonable rental for the unit	90
during the pendency of the action. The unit owners association or	91
the holder of the lien is entitled to the appointment of a	92
receiver to collect the rental. Each rental payment a receiver	93
collects during the pendency of the foreclosure action shall be	94
applied first to the payment of the portion of the common expenses	95
chargeable to the unit during the foreclosure action.	96

(3)(4) In a foreclosure action the holder of a lien on a unit	97
commences, the holder of that lien shall name the unit owners	98
association as a defendant in the action.	99

(4)(5) Unless prohibited by the declaration or the bylaws,	100
following a foreclosure action a unit owners association commences	101
pursuant to division (B)(1) of this section or a foreclosure	102
action the holder of a lien on a unit commences, the association	103
or its agent duly authorized by action of the board of directors,	104
is entitled to become a purchaser at the foreclosure sale.	105

(5)(6) A mortgage on a unit may contain a provision that	106
secures the mortgagee's advances for the payment of the portion of	107
the common expenses chargeable against the unit upon which the	108
mortgagee holds the mortgage.	109

(6)(7) In any foreclosure action, it is not a defense, set	110
off, counterclaim, or crossclaim that the unit owners association	111
has failed to provide the unit owner with any service, goods,	112
work, or material, or failed in any other duty.	113

(C) A unit owner who believes that the portion of the common	114
expenses chargeable to the unit, for which the unit owners	115
association files a certificate of lien pursuant to division (A)	116
of this section, has been improperly charged may commence an	117
action for the discharge of the lien in the court of common pleas	118
of the county in which all or a part of the condominium property	119
is situated. In the action, if it is finally determined that the	120
portion of the common expenses was improperly charged to the unit	121
owner or the unit, the court shall enter an order that it	122
determines to be just, which may provide for a discharge of record	123
of all or a portion of the lien.	124

Sec. 5312.12. (A) The owners association has a lien upon the	125
estate or interest in any lot for the payment of any assessment or	126
charge levied in accordance with section 5312.11 of the Revised	127
Code, as well as any related interest, administrative late fees,	128
enforcement assessments, collection costs, attorney's fees, and	129
paralegal fees, that are chargeable against the lot and that	130
remain unpaid ten days after any portion has become due and	131
payable.	132

(B) All of the following apply to a lien charged against a	133
property pursuant to this section:	134

(1) The lien is effective on the date that a certificate of	135
lien is filed for record in the office of the recorder of the	136
county or counties in which the lot is situated, pursuant to	137
authorization by the board of directors of the owners association.	138
The certificate shall contain a description of the lot, the name	139
of the record owner of the lot, and the amount of the unpaid	140
assessment or charge. It shall be subscribed to by the president	141
of the board or other designated representative of the owners	142
association.	143

(2) The lien is a continuing lien upon the lot against which	144
each assessment or charge is made, subject to automatic subsequent	145
adjustments reflecting any additional unpaid interest,	146
administrative late fees, enforcement assessments, or any other	147
assessment or charge provided for by this chapter, the	148
declaration, or bylaws and collection costs, attorney's fees,	149
paralegal fees, and court costs.	150

(3) The lien is valid for a period of five years from the	151
date of filing, unless it is sooner released or satisfied in the	152
same manner provided by law for the release and satisfaction of	153
mortgages on real property or unless it is discharged by the final	154
judgment or order of a court in an action brought to discharge the	155
lien as provided in this section.	156

(4) The lien is prior to any lien or encumbrance subsequently	157
arising or created, except liens for real estate taxes and	158
assessments of political subdivisions and liens of first mortgages	159
that have been filed for record prior to the recording of the	160
lien, and may be foreclosed in the same manner as a mortgage on	161
real property in an action brought by the owners association.	162

(5)(a) In the amount described in division (B)(5)(b) of this	163
section, the lien is prior to any lien or encumbrance previously	164
arising or created except liens for real estate taxes and	165
assessments of political subdivisions. Following the security	166
interest created by division (B)(5)(a) of this section, the	167
association's lien returns to the priority outlined in division	168
(B)(4) of this section.	169

(b) The security interest created by division (B)(5)(a) of	170
this section shall be in an amount equal to the lesser of the	171
amount of the delinquency or six months of common expense	172
assessments based on the budget adopted by the owners association	173
for the year in which the foreclosure action against the unit is	174
commenced, plus the owners association's reasonable attorney's	175
fees, costs, and expenses related to the foreclosure.	176

(C)(1) In any foreclosure action that the holder of a lien	177
commences, the holder shall name the owners association as a	178
defendant in the action. The owners association or the holder of	179
the lien is entitled to the appointment of a receiver to collect	180
rental payments due on the property. Any rental payment a receiver	181
collects during the pendency of the foreclosure action shall be	182
applied first to the payment of the portion of the common expenses	183
chargeable to the lot during the foreclosure action.	184

(2) Unless prohibited by the declaration or the bylaws,	185
following any foreclosure action, the owners association or an	186
agent the board authorizes is entitled to become a purchaser at	187
the foreclosure sale.	188

(3) A mortgage on a lot may contain a provision that secures	189
the mortgagee's advances for the payment of the portion of the	190
common expenses chargeable against the lot upon which the	191
mortgagee holds the mortgage.	192

(D) An owner may commence an action for the discharge of the	193
lien in the court of common pleas of the county in which all or a	194
part of the property is situated if the owner believes that the	195
liability for the unpaid assessment or charge for which the owners	196
association filed a certificate of lien was improperly charged. In	197
the action, if it is finally determined that the unpaid amount of	198
the assessment or charge was improperly charged to the owner or	199
the lot, the court shall enter an order that it determines to be	200
just, which may provide for a discharge of record of all or a	201
portion of the lien and an award of attorney's fees to the owner.	202

Section 2.  That existing sections 5311.18 and 5312.12 of the	203
Revised Code are hereby repealed.	204