Updates to the Ohio Condominium and HOA statutes signed by Governor DeWine!
The Ohio Condominium Act (O.R.C. 5311) and the Ohio Planned Community Act (O.R.C. 5312), are Ohio statutes which govern condominiums and what are commonly known as residential subdivisions. Both statutes were recently updated when Governor Mike DeWine signed S.B. 61 into law on June 14, 2022. The updates to both statutes are effective as of September 11, 2022. A copy of S.B. 61 can be viewed here.
The Ohio CAI Legislative Action Committee (LAC) began collaborating with representatives from the Ohio Senate in 2019 and, after addressing revisions with the original draft and delays due to COVID-19 and other legislative actions, S.B. 61 was approved by the Senate unanimously on June 1, 2022.
Some of the updates to O.R.C. 5311 and 5312 are related to electronic notices for owners’ meetings, reserve contributions, insurance, and the installation of solar panels and devices. Look for additional information coming your way as we provide more specific information in the weeks ahead.
For condominiums, a change has been made in the statute regarding the reserve contribution requirement. Prior to the passage of S.B. 61, there was confusion regarding interpretation about the 10% minimum reserve contribution and language related to waiving, by a majority vote of the owners, the annual reserve contribution requirement. The new language in the statute now eliminates the minimum 10% reserve requirement. The updated provision of O.R.C. 5311.081(A), provides the board must annually adopt a budget which must include reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments, unless one of the two following items apply:
- a)The declaration and bylaws include language that limits the ability of the board to increase assessments without a vote of the unit owners, or
- b)The unit owners, waive the reserve requirement in writing each year, by no less than a majority vote of the owners.
For homeowners’ associations, there was a change in the preamble for the language related to the statutory reserve contribution, which in most cases, will not affect the HOA’s budget for reserve contributions as most HOA declaration and bylaws do not specify an amount for reserve contributions. This means that as usual, since the inception of the HOA statute in 2010, HOA boards should be setting aside a reserve contribution annually so there will be no need for special assessments to adequately repair or replace major capital items, unless a majority of the voting power of the owners waive the reserve requirement (in writing).
It is expected the revised language in O.R.C. 5311.081(A) may require an adjustment to the annual reserve contribution for some condominium associations. Boards for both condominium associations and homeowners’ associations should be reviewing the budget and annual reserve contribution to be sure the association is set for compliance with future budgets. For more information, contact Williams & Strohm, LLC at (614) 228-0207.
Ms. Strohm has been practicing law since 2004 and is a principal of the firm Williams & Strohm, LLC. As a member of the Ohio and Columbus Bar Associations, she is admitted to practice in all Ohio courts and the Federal District Court for the Southern District of Ohio. Read Robin Strohm's full bio.