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Associations Cannot Collect Charges For Damages Or Enforcement Assessments Without Providing An Owner With Written Notice And Granting An Opportunity For A Hearing

The Ohio Court of Appeals for the Eighth District (the district that hears appeals from Cuyahoga County) recently upheld the rule stating that prior to imposing a charge for damages or an enforcement assessment for violations of the governing documents, an association must provide an owner with notice and an opportunity for a hearing. The Court also determined that extensive communications with an owner prior to charging such assessments was not sufficient to overcome the statutory requirements.

As most of you know, an association may not impose a charge for damages or an enforcement assessment until the board provides the notice required by R.C. 5311.081(C). That section requires that prior to imposing a charge for damages or an enforcement assessment, the board of directors must give an owner a written notice providing a description of the violation, the amount of the proposed assessment, the procedures to follow if the owner wants a hearing, and a date to cure.

In the Country Club Condo. Owners Assoc. v. Thomas E. Sammom, Jr., Trustee case, the board failed to provide the statutory notice and thus the association was unable to collect the cost of repair from the owner. In the Country Clubcase, the association required an owner to make certain repairs to the floor of his balcony (a limited common element), since water was penetrating into the unit below his unit. The owner objected to the extensive repairs demanded by the association. The association warned the owner that if the repairs were not made by a certain date, the association would retain a contractor to make the repairs and assess the owner for the cost of repairs as well as enforcement assessments, costs for violation of the governing documents and legal fees “without further notice to” the owner. This letter did not include the statutory language that requires notice and a hearing.

would undertake the repairs and charge the costs to the owner. This letter did not include the statutory language that requires notice and a hearing. When the owner refused, the association advised the owner again that the repairs would be made, but again this letter did not include the required statutory language that requires notice and a hearing.

The association ended up assessing the owner $16,514.87, which included the costs of the repair as well as other unpaid fees and assessments. The association filed a lien on the property and proceeded to foreclosure.

The trial court ruled in favor of the owner and held that the assessment was improper since the association did not provide the proper notice and opportunity for a hearing. The lien on the property was deemed null and void. The Court of Appeals agreed. It determined that the assessment for repairs is a “charge for damages” to the limited common area and is an assessment for the enforcement of the owner’s duty to make repairs.

The association tried to argue that the extensive negotiations and communications with the owner prior to making the repairs was sufficient to overcome the requirements the statutory notice requirements. The Court did not agree and held that the statute mandates that in order for a association to impose a charge for damages or an enforcement assessment, the board must give the unit owner a written notice of the right to a hearing, and procedures for requesting a hearing. There is no provision under which these requirements may be satisfied by substantial compliance or through a course of action involving negotiation with the unit owner.

The takeaway from this case is that before a charge for damages or enforcement assessments is assessed to an account, an owner must receive a letter that includes the statutory language that requires notice and a hearing. It is not enough that a board member has discussed the proposed charge or assessment with the owner.

Our office routinely prepares these letters and can insure that your association is in compliance. We want to protect the associations we represent from the outcome that happened in the Country Club case. By failing to prepare a proper letter, the association was out over $16,000.00—not including attorney fees, of course.

The owner informed the association that repairs were made. A few months later, more water leaked through the balcony. The owner made more repairs, but the downstairs owner still complained about water leakage. At this point, about a year after the first repairs were made, the association retained a contractor to make additional repairs. The association demanded that the owner sign the contract with the association's contractor or else the association

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