The process of collecting unpaid assessments or other charges owed to a condominium or homeowners’ association is an unpleasant but necessary part of an association’s business operations. A declaration for a condominium association or deed restrictions (“CC&R’s”) for a homeowners’ association are considered contracts between the owner and the association pursuant to Ohio law. Condominium and homeowners’ association boards generally have a duty to collect assessments and therefore, should be diligent in following procedures for collecting funds owed to the association from delinquent owners, including specific timelines for doing so.

It is important to keep in mind that nonpayment of assessments by an owner is a form of breach of contract. There are time limitations, also known as “statute of limitations”, which limits how long an association can bring a claim against an owner for nonpayment of assessments or other charges. If an account remains delinquent for several years, then the association may be limited on how much of that unpaid balance can be collected.

Ohio Revised Code 2305.06 was revised in June 2021 and now requires any claim related to a breach of a written contract must be asserted within 6 years (reduced from 8 years) from the date the “cause of action accrues”. The trigger for when the “cause of action accrues” is when the owner becomes delinquent in the payment of assessments or other charges owed to the association. 

The best way for association board members to be diligent in timely asserting claims for nonpayment of assessments is to follow a collection policy and adhere to specific timelines for legal action related to demand letters, liens, and foreclosures. Having a collection policy adopted by the board and following that collection policy protects the board and the association from allegations such as selective enforcement or discrimination. It will also ensure that the board is bringing claims against owners in a timely approach per said policy. 

Our firm can assist with implementing a collection policy tailored to your governing documents. In order to stay within the limit of 6 years for written contracts, be sure to enforce the collection of unpaid assessments or other charges within a reasonable time and do not let those delinquent accounts linger for years on end.  Doing so will result in the association having limited ability to collect the entire past due balance owed, including any legal charges that the owner is required by law to pay, as a part of that balance owed. For more information on staying within the 6-year statute of limitations for nonpayment of assessments, please reach out to one of the attorneys at Williams & Strohm, LLC if you have questions about collections at (614) 228-0207.