Are Homeowners Required to a Join HOA? Or Pay Assessments?
Real Estate, Resources
June 7, 2019 |
Generally, Homeowner’s Associations or HOAs collect dues from members to maintain and improve its members’ properties. Whether an owner is a member of the HOA depends on whether their property is included in the governing document (or Declaration) for the HOA Community and whether the owner’s deed references as an exception to ownership for “zoning ordinances, easements, restrictions, and conditions of record.” However, a recent court decision adds another requirement. It found that the Declaration must have language that requires owners to be members of the HOA. If membership is not compulsory, then HOAs cannot compel membership.
The case stems from a dispute between property owners (“Owners”) in Beachwood, Ohio and the HOA for a subdivision in which their property is located. When the Owners purchased their property, the Declaration establishing the HOA was of public record, however, the ability to collect assessments was not. In 2007, the Declaration was amended to include an obligation that property owner’s pay assessments, to administer an adjacent park that was established for the subdivision’s benefit. Although the Owners had never paid assessments, the HOA sought payment from the Owners pursuant to the Declaration.
The Owners filed suit against the HOA, requesting the judge to determine that they are not members in the HOA and are not obligated to pay any assessments to the HOA. The trial court ruled in favor of the HOA and determined the Owners owed $17,253.84 in assessments, late fees, and attorney’s fees. On appeal, the Court found that although the Declaration was amended to allow the HOA to charge assessments, it did not contain a requirement that the Owners join the association. The Court cited an Ohio Supreme Court case for the proposition that restrictions in deeds must be construed in favor of the free use of the real estate and that if doubtful meaning attaches thereto the doubt must be resolved against the restriction.
The Court went on to hold that it refuses to recognize a membership requirement with the Declaration clearly does not. The Court concluded that the Owners are not members of the association. However, the Court also found that the requirement to pay assessments was separate from membership in the HOA. Because the Owners took title to the property knowing it was subject to the Declaration, and the Declaration was properly amended to permit the collection of assessments, the Owners were obligated to pay the assessments. This is notwithstanding the fact that they cannot be compelled to be members of the HOA. Ultimately the Court reversed the trial court’s decision and remanded the case back to the trial court for a determination on the date the Owners received notice of the assessments and the correct amount owed based on that date.
As the case discussed above illustrates, whether a property is included in an HOA, whether membership in the HOA is compulsory and the obligation to pay assessments, can all be difficult issues to discern and can change based on very specific fact patterns. The case discussed above can be reviewed in full at Willie Phelps, et al. v. Community Garden Assn., 2019-Ohio-1364.