Chapter 5312: What It Means For Your Hoa (part Iii)

This article marks the continuation of our summary of the Planned Community Act that went into effect on September 10, 2010.

Section 5312.03 of the statute provides that the Association must be administered by a Board of Directors. To qualify as a Board Member, a person must either be a titled owner to property or a spouse of a titled owner. If an owner is not an individual, then any principal, member of an LLC, a partner, director, officer, trustee or employee of the owner can serve on the board on behalf of that owner.

This section goes on to state that the Declarant must organize the Association as a non-profit corporation no later than when the first lot is sold. In addition, the Declarant can control the association for the period of time specified in the Declaration. During this declarant control period, the Declarant can appoint and remove the Board Members. The longest the Declarant can control the Association is until the last lot is transferred.

Section 5312.04 states that Officers of the Association are elected by the Board from members of the Board. If there is a vacancy on the Board at any time prior to the end of the term of that Board position, then the Board can appoint a person to fill the position until the term expires. However, if your documents provide otherwise, then

you must follow your documents. For example, if you have a provision that requires the appointee to be elected into the remainder of the term at the next meeting of the Association, then that must be adhered to.

This section goes on to discuss meeting requirements. An owner controlled Board must have at least one owners meeting per year. Special meetings can be called by the President, by the majority of the Board, or by owners representing 50% of the voting power (or a lower percentage if provided for in the Declaration or Bylaws).

The Board can now hold meetings by any method of communication, including by electronic or telephonic means so long as each Board member can hear or read (in real time) and participate and respond to all other Board members in real time.

This section also provides that the Board can take action without holding a Board meeting as long as the action taken has been unanimously approved by written consent. The written consents are then filed with the next meeting minutes of the Board.

The Association, according to 5312.04(F), is permitted to close all board meetings to persons other than directors if the documents do not prohibit doing so. The Board must give an owner express consent to attend and/or participate in any Board meeting prior to the owner being permitted to do so.

Finally, 5312.04 dictates that the Board of any Association cannot discriminate and must abide by all state and federal laws concerning discrimination on the basis of race, color, religion, sex, military status, national origin, disability, age, or ancestry.

Next issue, we will continue to discuss this new statute and how it’s provisions affect planned communities in Ohio.

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