Does An HOA Need Management?
Operating and managing a homeowners’ association can be challenging and confusing. HOA Boards are typically made up of a group of volunteer owners from the community who are tasked with determining what their duties are and how to fulfill them. Many HOAs employ community management services to help run the association.
What Is HOA Management?
HOA management assists the board with its many duties and responsibilities, which helps the overall goal of the HOA to protect property values and maintain a desirable community. HOA management steps in to help the association with maintenance of the common areas, collecting assessments, collecting delinquencies, handling complaints, resolving conflicts, preparing budgets, managing reserve funds, and other duties that an HOA is required to carry out. This is helpful to boards that do not have time or knowledge to handle the many aspects of operating the HOA.
Does My HOA Need Management?
There are many community associations that are self-managed and operate successfully. One consideration when deciding whether the association needs HOA management is the size of the community. A large community may have more common elements and amenities to be maintained. Moreover, a large community usually generates greater volume of complaints, questions, variance requests, records, and assessments that need to be collected and managed. This can be stressful and difficult for the board.
Another factor to consider is the knowledge, or access to it, of the board members. HOAs need access to legal advice, accounting and tax services, financial services, insurance coverage, and companies to maintain common areas, such as landscaping companies. Experienced property managers are very knowledgeable about homeowners’ associations due to education and experience. Furthermore, HOA management companies typically have a large network of professionals that are utilized by HOAs. This can save the HOA a lot of time because the management company can contact and retain the necessary vendors and professionals on the association’s behalf.
Finding the Right Management Company
If the HOA determines it needs HOA management, the next step is finding the right management company. Management contracts typically last for a duration of one (1) year, but some are multi year contracts. Thus, it is important that the management company is the right fit for the association. First, the association should determine its needs, whether that be full-service management or help with particular aspects of operating the HOA. It is also necessary for the board to establish a budget for management services.
Next, the HOA board should send Requests for Proposals to the HOA management companies of interest. These requests should state the HOA’s budget and the desired scope of services. The management companies will then send the association a proposal, which outlines the fees and services it will provide.
Once the board has reviewed the management companies’ proposals, it should make a short list of management companies and begin to interview those candidates. The board should create a set of questions and criteria to evaluate and compare different companies. Budget is an important part of the decision process, but the cheapest company is not always the best. Make sure to weigh services against price.
After the HOA has chosen a management company, the board should review and negotiate the contract. It is important to ask questions about any terms or clauses the board is unsure about. The board should also negotiate any terms it feels are unfair or that its uncomfortable with. An HOA attorney can also review and negotiate the contract on your behalf.
Finally, after the contract is signed and the management company is providing services to the HOA, the board should monitor the services and its satisfaction with the company. Make sure the company is fulfilling its duties pursuant to the contract and discuss any dissatisfaction with the manager.
If your homeowners’ association has questions regarding HOA management or needs help reviewing and/or negotiating a management contract, please reach out to Richter Law.
By: Attorney Amber Richter. See profile here.
- Published in Community Associations
Ohio Property Tax Appeals
Tax valuation is not an exact science. Due to limited time and resources, broad appraisals are made by the county auditor when determining the value of property. If you are assuming the county’s valuation of your property is correct, you could be paying more than your fair share of property taxes. You should know the true value of your property and contest the county’s value if it is wrong.
Appealing Property Taxes in Ohio
Property values can be challenged by filing a “Complaint Against Valuation” with the local county Board of Revision (BOR). The same complaint form is used statewide. These forms need to be filled out carefully and correctly because incorrect or missing information can be a cause for dismissal of the Complaint. Because Ohio pays property taxes one year in arrears, meaning for periods of time that have already passed, the BOR will be looking back in time to the previous year when determining property value.
All Complaints must be filed with the BOR by March 31. If you miss the deadline, you must file the following year. When appealing the valuation of your property, you must be able to prove your property’s fair market value. This is done by submitting probative evidence of value. Evidence typically includes comparable sales in the area, proof of a recent, arm’s length sale (sale between two or more unrelated and unaffiliated parties), or an independent appraisal conducted by a qualified appraiser.
Following the filing of the Complaint, a hearing will be scheduled. The hearings typically take place during the summer and fall months and only last about 15 to 30 minutes. The hearing is conducted in front of a panel comprised of the county auditor, county treasurer and the president of the Board of County Commissioners (or their appointees). Your local school district may also send a representative to contest your Complaint, since the school district receives a portion of property taxes. However, this is only likely to occur if you are requesting a reduction in value of at least $50,000. A decision is typically made within two to four weeks after the hearing. You can file an appeal can with the Ohio Board of Tax Appeals or the local County Common Pleas Court if you do not agree with the BOR’s decision.
Please contact Richter Law if the county has recently increased the value of your property or you feel that you are paying too much for property taxes. We can help you determine whether you should file an appeal with the Board of Revision and provide representation during the process.
- Published in Real Estate, Real Property, Uncategorized
Creating Clear and Enforceable Rules
Typically, a condominium owners association’s (COA) and homeowners association’s (HOA) governing documents set broad parameters and restrictions for governance of the community. The association’s documents grant power to community association boards to create and establish more specific rules and enforcement procedures that are tailored to the needs of the particular community. A COA board will typically have a broad scope of rulemaking authority. A HOA board’s scope of authority is typically less.
It is important for HOA and COA boards to review their governing documents so that they understand the scope of their authority and to assess whether the current rules and guidelines are still working for the community. Condominium associations boards and homeowners associations boards should create and establish clear and reasonable rules. Clear rules provide guidance to owners on what is allowed and expected within a community. This allows owners to live in and enjoy their property and the community within the parameters of those guidelines.
Moreover, HOA & COA boards should also adopt clear enforcement procedures and be sure to apply those procedures properly and fairly to all owners of the association. Homeowners Association and Condominium Boards can quickly find themselves in a tough and expensive situation when they try to enforce rules against one owner but has failed to enforce the same rule against a different owner.
Also important is being aware that federal, state, or local law may supersede the rules and guidelines a board has adopted. For example, a board may allow fences to be installed on the entire perimeter of a property, but a local ordinance may require a certain amount of setback from the property line.
Our firm can help with any questions your board has regarding the scope of its authority. If the board has not reviewed the governing documents of the association for quite some time, it may be a good idea to sit down with an attorney and go through a review. Furthermore, we have experience in helping boards create, adopt and enforce rules and guidelines for community associations. Please reach out to us to schedule a time to discuss your HOA or COA board’s specific needs.
See Attorney Amber Richter’s Profile Here
- Published in Community Associations, Home Owners Association
5 Tips for Landlords
As an attorney that has handled many landlord/tenant issues throughout the years, I am often asked for advice by people that are considering purchasing investment rental properties. There are certain duties established by Ohio law that landlords must uphold. It is important to know what is required of you to avoid legal issues.
Form a Limited Liability Company (LLC) and Open a Business Bank Account for Rental Properties
Forming a limited liability company (or LLC) for your rental properties is highly recommended. The main advantage is that it protects the landlord from personal liability and protects the landlord’s personal assets. There may also be tax advantages to forming an LLC. An attorney can help you determine whether it is best to have one LLC for all rental properties, separate LLCs for each property, or a series LLC. Also important is opening a business bank account for your LLC and ensuring you are not comingling your business funds with your personal funds.
Screen Tenants
Before agreeing to rent to a person, a landlord should be completing a credit and background check. Some landlords even require references. This will help prevent problems of non-payment, criminal activity and lease violations. However, it is illegal to discriminate and refuse to rent to anyone on the basis of race, color, religion, sex (including gender identity and sexual orientation), disability, familial status, or national origin, pursuant to the Fair Housing Act.
Put Everything in Writing
Every rental agreement should be in the form of a written lease that sets out all of the requirements of the agreement. This lease agreement needs to be signed by the landlord and the person(s) renting the property. Furthermore, any changes to the lease, or new agreements or terms throughout the course of the rental period, should also be put in writing and signed by all parties. When the lease term ends, any new agreement and terms (including a month-to-month agreement) should be put in writing and signed by all parties.
Maintain and Repair in a Reasonable Amount of Time
Promptly address any complaints or requests and stay on top of maintenance and repairs. Landlords that fail to fulfil their duties often lose good tenants. Furthermore, tenants may be legally entitled to withhold rent (escrow), repair the problem and deduct the cost from the rent, or terminate the lease for the landlord’s failure to maintain and repair the property. Moreover, a landlord may be liable for injuries and illnesses caused by the landlord’s failure to maintain the property.
Properly Handle Security Deposits
Any security deposit of $50 OR one month’s rent (whichever is greater) shall bear 5 percent annual interest if the tenant is in the property for at least 6 months. This interest shall be paid annually to the tenant. Landlords have 30 days to return security deposits after the tenant vacates, less any rental amounts owed and damages beyond normal wear and tear. If there are deductions from the security deposit, the landlord should send the tenant an itemized list showing how the deposit was applied. The tenant has a duty to provide the landlord with a forwarding address for which the security deposit and any itemized deduction list.
Here at Richter law, we can help you take all the necessary steps and provide you information to help ensure a successful landlord/tenant relationship. We can handle LLC formation, lease and contract preparation, review and negotiation, evictions, and all other landlord/tenant issues.
By: Amber Richter, Esq.
See Attorney Profile Here
- Published in Landlord/Tenant
Is a Seller Required to Disclose Defects in a Residential Property?
Pursuant to Ohio law, sellers in most residential real estate transactions are required to provide the buyers with a disclosure form. Ohio Revised Code §5302.30 states disclosure forms are required in “any transfer of residential real property that occurs on or after July 1, 1993.” The statute also applies to installment contracts, leases with options to purchase, and renewable leases with ninety-nine-year terms.
Typically, this statute is limited to traditional real estate transactions between buyer and seller. It does not apply to commercial properties, foreclosures, a transfer pursuant to a court order, or to homes that have not yet been lived in.
The form is designed for the seller to be able to disclose “material matters relating to the physical condition of the property to be transferred, including, but not limited to, the source of water supply to the property; the nature of the sewer system serving the property; the condition of the structure of the property, including the roof, foundation, walls, and floors; the presence of hazardous materials or substances, including lead-based paint, asbestos, urea-formaldehyde foam insulation, and radon gas; and any material defects in the property that are within the actual knowledge of the [seller].” R.C. §5302.30(D)(1). Thus, a seller may be liable in a subsequent lawsuit alleging latent defects by the buyer if the seller fails disclose what is reasonably known to them at the time of sale.
When is the seller liable for failure to disclose a defect?
§5302.30 applies to “latent defects,” with are issues that would not be obvious or easily found by the buyer during a walkthrough or inspection. Examples of latent defects are foundation issues, flooding, mold, and septic tank issues. These are the types of issues that would only likely be known to someone who has lived in the property and not found simply by walking through the property.
In Ohio, a buyer must prove that the seller had knowledge of a defect in order to be successful in a real estate disclosure lawsuit. Furthermore, the applicable law provides that a seller is “not liable in damages in a civil action for injury, death, or loss to person or property that allegedly arises from any error in, inaccuracy of, or omission of any item of information required to be disclosed in the property disclosure form if the error, inaccuracy, or omission was not within the transferor’s actual knowledge.” Claims are also subject to a statute of limitations, meaning a buyer has a limited amount of time to file a lawsuit for failure to disclose a latent defect. Some Ohio courts have held that the statute of limitations begins at the time you discovered or should have discovered the defect upon taking possession of a home. Because it can be difficult to prove the actual knowledge of a seller, and because there is a statute of limitations, it is important that you speak with an attorney as soon as possible after discovering a defect you feel should have been disclosed by the seller.
If you are selling residential real property, it is important that you are aware of the disclosure form and what is required to be disclosed by you. Furthermore, Ohio Revised Code §5302.30 is still applicable to sellers that sell “as is.” Consulting with an attorney prior to the sale of property can help you to avoid potential liability after the transfer of the property.
- Published in Real Estate
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