Bulletin: OH2010004

Dear Associates:

Senate Bill187 codifies Chapter 5312 of the Ohio Revised Code, creating the Ohio Planned Community Law. The most important aspect of the new law for title agents is the creation of a lien for unpaid homeowner association dues and assessments.

Revised Code 5312.12 creates the homeowners association lien and states as follows:

1. The lien attaches on the date a certificate of lien is filed with the County Recorder.
   
   
2. The lien is valid for five years from the date of filing and may not be re-filed.
   
   
3. The lien is a continuing lien subject to automatic, subsequent adjustments to the amount owed due to unpaid interest, late fees, collection costs, attorney fees and court costs.
   
   
4. The lien may be foreclosed in the same manner as a mortgage.

In any action to foreclose any other lien, the homeowners association must be a defendant whether or not a homeowner association lien was filed.

UNDERWRITING GUIDELINES

1. Examine the declarations, conditions, covenants and restrictions affecting the land to determine whether or not a homeowners association was created.

2. Treat homeowners association liens filed with the Recorder prior to September 10, 2010 as a valid lien under ORC 5312.12 and require satisfaction and release of the lien.

3. Treat certificates of judgment for unpaid dues and assessments in favor of homeowners associations filed with the Clerk of Courts as certificates of judgment.

4. Obtain an executed release to hold in escrow prior to closing the transaction, and record the release upon disbursement. This is mandatory due to the continuing nature of the lien; do not merely pay the lien to a zero balance without obtaining the release in advance.

5. When closing any transaction, you must contact the homeowners association and obtain in writing the amount of any unpaid dues and assessments regardless of whether or not a lien has been filed. Pay or pro-rate any balance owed pursuant to the purchase contract or closing instructions.

On Judicial Reports, you must examine whether or not a homeowners association exists by examining the declarations, conditions, covenants and restrictions affecting the land filed with the County Recorder. If a homeowners association was created it must be noted on the report. If a homeowner association was created and the association has not been made a party to the judicial action, then you must take exception on the Final Judicial Report to the lack of service on the association.

Should you have any questions, please contact your local underwriting personnel at 800-909-3574 or 614-818-1393 or by email at flong@stewart.com or Stewart Legal Services

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