Board members of a community association in Ohio wear many hats: volunteer, neighbor, and legally speaking, a fiduciary. The fiduciary duty of a board member is owed to the Association, and as such board members are trusted to manage the association’s finances. As inflation drives up costs, one of the toughest challenges a board faces is deciding to increase monthly condominium dues or annual homeowners’ association dues. Keeping dues artificially low to maintain short-term peace is tempting, but avoiding necessary repairs or insufficiently contributing to the reserves to avoid increased dues merely kicks the can down the road. While the Business Judgment Rule protects directors from personal liability when making informed, good faith decisions on behalf of the association, it does not give board members blanket discretion to keep dues low when doing so harms the community. Not every community will need to raise dues every year, but board members must be prepared to act when the numbers demand an increase. Communicating the  decision to increase dues effectively with the owners is where the real work begins. Here are four essential Do’s and Don’ts to help your board navigate budget decisions while maintaining community trust.  

1.  DO Check Your Community’s Bylaws & Provide Proper Notice 

Ohio Law does not dictate a specific, rigid timeline for annual budget increases. Rather, both Ohio’s Condominium Act (O.R.C. §5311) and Planned Community Act (O.R.C. §5312) mandate that the process of adopting a budget and providing proper notice of due increases defers to specific notice timelines in your association’s governing documents. Specifically, O.R.C. 5311.08(B), and R.C. 5312.02(B)(8), requires that your association’s bylaws explicitly dictate the manner of giving notice for meetings and financial adjustments.  Before adopting a budget or adjusting assessments, review your association’s governing documents to identify the proper timing of notice, delivery method, voting procedures required, and follow all procedures. Adhering to these requirements demonstrates responsible governance and fosters trust among residents.  

2.  Don’t Avoid The Financial Reality of Your Community 

When it comes to managing the community’s finances, The Ohio Condominium Act and Ohio Planned Community Act share a fundamental goal: encouraging long-term financial foresight, in part, to protect owners from sudden, heavy financial burdens. In 2004 and later in 2022, Ohio’s Condominium Act underwent a massive overhaul designed to reduce a board’s reliance on unexpected special assessments for major capital improvements. Under R.C. 5311.081(A)(1), condominium boards and under 5312.06(A)(1), HOA boards are required to maintain a reserve fund adequate for repairing and replacing major capital items, unless the Board obtains a written waiver annually from a majority of the eligible voters.  

The legislative intent here is clear: incentivize boards to actively manage the association’s long-term financial health. It is important to remember that even securing, proper annual waivers does not eliminate maintenance obligations—it merely defers the bill. This “surprise,” financial shock is precisely what the statutes seek to prevent. To proactively budget for the long term, boards need a clear picture of the association’s capital assets. If you have not had a reserve study done in the last three to five years, the board should seek proposals from companies that do reserve studies and have a reserve study completed.  A reserve study answers two critical sets of questions: 

a. Physical Analysis: what shared assets does the association own, what condition are they in, and when will they require major replacement or repair (what is the remaining useful life)? 

b. Financial Analysis: How much will those repairs or replacements cost, and how to implement an effective strategy to pay for them? 

During the process, a professional reserve specialist inspects the property to evaluate the core assets. That physical data is then integrated into a financial model that projects a timeline into the future, usually about 30 years, which can calculate the association’s current funding status and create a reasonably predictable funding plan for the future.  While the reserve study is an incredibly useful tool, it is a compass not a GPS. The board must still actively manage unforeseen market shifts, inflation, insurance proceeds for capital repairs or replacements, and unexpected physical wear along the way. When the board can demonstrate that it is relying on professional tools like a reserve study to guide its financial decisions, it provides owners with invaluable peace of mind, proving that their investment is protected for the long haul.  

3. Do Communicate “Where” and “Why”  

Most people purchase real estate because it is a predictable investment. Naturally, a responsible homeowner will get weary if dues wildly fluctuate or when dues feel completely disconnected from what they see around neighborhood. As illustrated above, underfunding an association is just as financially damaging to owners as overcharging them. To earn trust, boards must frame budget conversations around long-term value, tailored to the specific community.  

Condominium associations must protect and maintain the entire building structure (unless provided otherwise in the governing documents) to ensure new buyers can secure conventional mortgages backed by Fannie Mae and Freddie Mac. When a new buyer applies for a mortgage on a condominium unit, traditional lenders do not only vet the buyer, but they will also perform a comprehensive review of the entire association. Fannie Mae and Freddie Mac have specific guidelines for a condominium to meet to qualify for a conventional mortgage. If the condominium cannot meet the requirements, conventional financing dries up and shrinks the buyer pool, potentially driving down unit values over time. While single-family homes in an HOA generally will not face the same kind of strict secondary market scrutiny, underfunded or deferred maintenance in a HOA can reduce the curb appeal and reduce home resale values compared to neighboring communities. Along with issuing the annual budget required by O.R.C. §5311.081 and O.R.C. §5312.06, the most successful boards provide context to the numbers by sharing with owners the community’s long term financial vision. When presenting the budget, the goal is not to walk owners through every line item but rather to connect the numbers to the physical condition of the property and its regulatory obligations. Focus on major priorities like pavement resurfacing, amenity overalls, and property maintenance and repair. Explaining the reasons for these projects helps the owners connect the dues they pay directly to support long-term property values and legal obligations.  

4. Don’t Go it Alone  

Ohio Law places many duties and obligations on volunteer board members. It requires a constant balancing act of juggling day-to-day operations while managing legal and financial risks. Recognizing when to bring in professional support is not a sign of hesitation; it is the hallmark of effective governance. To keep daily operations running smoothly from maintenance and vendor coordination and administrative tasks, partnering with a qualified property management professional is essential. When navigating complex legal frameworks, such compliant reserve funding and proper notice, boards should consult experienced community association legal counsel. 

If your association has questions about budgeting, reserves, dues, or notice requirements, contact our office at (614) 228-0207 and speak to one of our attorneys, so we can help you through the process and protect your association.