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HOA Board Alert

June 2022 Amendments to Planned Community Act

 

On June 14, 2022, Governor DeWine signed into law Senate Bill 61, which included several amendments to the Ohio Planned Community Act (R.C. 5312). This law generally covers homeowners associations that are not designated as condominium units.  These laws are effective on September 11, 2022. 

If your Board has any questions about any new rights or responsibilities under the amendments, please do not hesitate to contact our office.

The amendments are summarized as follows:

 

Electronic Notices (5312.02(B)(8) & 5312.11(C)):

Instead of mailing all notices, the Association can now send these notices required by the governing documents, including annual meeting notices, to the owners by email. The only caveat is that you can only do this if the Association receives the owner’s prior authorization to send their notices via email. If the email bounces back, you must put a copy in the mail.

For enforcement notices, the Association can use any of the email addresses that the owner has given to the Association, in writing (including sending an email).

 

Board Composition (5312.03(A)(1)):

The majority of the board (more than half of the board members) cannot be from the same lot unless, prior to such board composition, the board adopts a resolution allowing the owners of a single lot to comprise more than the majority of the board.

 

Limitations on Record Requests (5312.07(B)):

No more reviewing documents from 20 years ago! The limitation is now that the Association only has to provide documents going back 5 years, pursuant to the owner’s requests. Keep in mind that for purposes of litigation, discovery may be beyond the 5-year period. It is important to amend any record retention policies and follow them.

 

Board’s Right to Amend Decs & Bylaws (5312.05(C)):

The Board had the right to make amendments to the Declaration or Bylaws, by Board vote only, to delete any provisions of the governing documents that eliminate discriminatory references on the basis of race, color, national origin, sex, religion, or familial status.

 

Intervention into Zoning or Land Use Planning (5312.06(D)(2)):

Unless otherwise provided in the Declaration, the Board can now choose to become involved in matters involving Planning Commission, the Zoning Commission, or the Board of Zoning Appeals, and any subsequent administrative appeals, which affect two or more owners and impact zoning. This is just an extension of the section which allows the Association to file suit or participate in civil, criminal, or administrative matters involving the Association.

 

Solar Panel Allowance (5312.16):

The owners are permitted to install solar panels unless specifically prohibited by the Declaration. The installation is only permitted if 1) the cost to insure and replace the Living Unit’s roof or an alternative location is not the Association’s responsibility, OR 2) if the declaration specifically provides for the installation on Association responsibility items, which shifts the cost to the unit owner. The Association can implement restrictions concerning size, place, and manner of placement.

 

Fidelity, Crime & Dishonesty Insurance (5312.06(B)(4)):

The Association is required to have these types of insurance to protect against financial crimes. The Board of Directors, on behalf of and for the benefit of the Association, shall obtain the following types of insurance, to the extent reasonably available, which shall be a common expense:

(a) Property insurance on the common elements;

(b) Liability insurance pertaining to the common elements;

(c) Directors and officer liability insurance;

(d) Blanket fidelity, crime, or dishonesty insurance coverage for any person who controls or disburses Association funds. Any person who controls or disburses Association funds is defined as any individual with authority or access to sign checks, conduct electronic transfers, or otherwise withdraw funds for any Association bank account or deposit account, including the following:

(1) A management company’s principals and employees;

(2) The president, secretary, treasurer, any other board member, or employee of the Association.

(e) Said dishonesty policy shall provide for the following:

(1) Coverage shall be for the maximum amount of funds that will be in the custody of the Association or its designated agent at any one time, plus three months’ worth of operating expenses;

(2) The insurance shall be the property of and for the sole benefit of the Association and shall protect against theft, embezzlement, misappropriation, or any other unauthorized taking or loss of Association funds;

(3) The policy shall include in its definition of “employee” the manager and the managing agent of the Association’s funds or provide for this inclusion by an endorsement to the policy;

(4) The policy shall name the Association as the insured party and shall include a provision requiring the issuer of the policy to provide a ten-da written notice to the Association’s president or manager in the event of cancellation or substantial modification of the policy. The manager or managing agent, if any, of the Association, shall be the designated agent on the policy;

(5) If there is a change in the manager or the managing agent of the Association, then within ten (10) days of the effective start date, the new manager or managing agent shall notify the insurer of such change

 

Lindsey Wrubel

Ohio State Bar Association Certified Residential Real Estate Specialist

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