Homeowners’ Associations (HOAs) and condominium associations play a crucial role in maintaining communities, ensuring common areas are well-kept, enforcing community rules, and funding essential services. These services are funded through assessments (or “dues”), which all homeowners within the association are required to pay.
In Ohio, as in many other states, failing to pay your association’s assessments can lead to significant financial and legal consequences. It’s essential to understand your obligations, the potential repercussions of nonpayment, and the steps your community association can take to collect delinquent assessments.
What Are Assessments and Why Are They Important?
Homeowner or condominiums “assessments” are the formal term for the fees that homeowners pay to their association to cover expenses such as:
- Maintenance of common areas (landscaping, pools, clubhouses, etc.)
- Landscape and snow removal services
- Insurance for common property
- Reserve funding for future repairs
- Administrative costs
- In condominium communities, services often include water, electric, and trash removal
Because the association is responsible for maintaining the community, unpaid assessments can create financial strain and impact all residents. To prevent disruptions in services, associations have the legal right to pursue unpaid dues aggressively.
What Happens If You Don’t Pay Your Dues?
If you miss a payment or fall behind on your association assessments, the consequences can escalate over time. Ohio law provides community associations with several tools to enforce payment including fines, collection actions, liens, and even foreclosure.
Late Fees and Interest Charges
Most association governing documents include provisions that allow the association to charge late fees and interest on unpaid balances. The exact amount varies in each case, but Ohio law allows reasonable charges as outlined in the association’s governing documents.
Late fees may be a fixed dollar amount or a percentage of the overdue balance. Additionally, interest may accrue on the unpaid amount, further increasing the debt.
Suspension of Community Privileges
Associations typically have the authority to suspend non-essential privileges for homeowners who fail to pay their dues. This can include revoking access to amenities such as pools, clubhouses, fitness centers, and recreational facilities.
Collection Efforts and Attorney Fees
If a community association is unable to collect payment through routine billing, it may escalate the matter by hiring a collection agency or legal counsel. Under Ohio law, the homeowner is responsible for collection costs, attorney fees, or court expenses incurred by the association in pursuing the debt.
This means that a relatively small unpaid balance can quickly grow due to additional fees, making it even more difficult to resolve the situation.
Liens on Your Property
One of the most serious consequences of nonpayment is the placement of a lien on your property. In Ohio, an association has the legal right to file a lien against a homeowner’s property for unpaid assessments.
An lien is a legal claim against your home that must be satisfied before the property can be sold or refinanced. This means that if you attempt to sell your home, the outstanding dues (plus any fees, interest, and legal costs) must be paid from the proceeds before the sale can be finalized. A lien can also negatively impact your credit and financial standing, making it harder to secure loans or refinance your mortgage.
Foreclosure on Your Home
If assessments remain unpaid for an extended period, an association has the legal authority to initiate foreclosure proceedings on your home, even if your mortgage is up to date.
Once an association places a lien on your property, it can seek a court order to foreclose on the lien. The home can then be sold at auction, with proceeds used to satisfy the unpaid assessments and legal costs.
An association-led foreclosure is less common than mortgage foreclosure, but it does happen, especially when large sums are owed. This means that ignoring your dues could ultimately result in losing your home.
Negative Impact on Credit Score
While unpaid association dues themselves do not automatically appear on credit reports, the collection efforts related to them can. If your association sends the debt to a collection agency or secures a court judgment, these actions may be reported to credit bureaus, negatively impacting your credit score. A lower credit score can make it more difficult to obtain loans, credit cards, or even rent a new home in the future.
What Are Your Options If You’re Struggling to Pay?
If you’re facing financial difficulties and struggling to pay your association dues, taking proactive steps can help you avoid severe consequences.
Communicate With Your Association
Most associations are willing to work with homeowners who are experiencing temporary financial hardship. Contact your management company as soon as possible to discuss your specific situation. They may be able to offer payment plans or waiver of late fees in some cases.
Review Your Association’s Governing Documents
Your association’s declaration and bylaws outline the rules regarding assessments, late fees, and enforcement actions. Understanding these policies can help you anticipate potential consequences and negotiate solutions..
Consider Selling or Refinancing
If you’re unable to keep up with association assessments long-term, selling your home or refinancing your mortgage may be an option to prevent financial strain and potential foreclosure.
Conclusion
Failing to pay assessments in Ohio can lead to serious financial and legal consequences, including late fees, loss of privileges, collection efforts, property liens, foreclosure, and credit damage. Because community associations have strong legal enforcement mechanisms, it’s important for homeowners to stay current on dues or seek assistance if they’re struggling. By communicating with your association, understanding your rights, and taking proactive steps, you can avoid the long-term negative effects of unpaid assessments and maintain financial stability in your community.
