Representing The Condominium Purchaser

A. Condominium Concepts

1. Organizational Documents
   1. Declaration and recorded amendments
   2. By-laws and recorded amendments
   3. Rules and Regulation
2. As a matter of law, the rights and duties of the condominium association and unit owners are defined and regulated by the Ohio Condominium Act and the 1978 amendments thereto. “It is clear that the Ohio Condominium Act and the 1978 amendments to the Act create relationships, rights and remedies which did not exist in common law. The scope of the Act convinces us that it was meant to comprehensively define and regulate the law of condominium development.” (Emphasis in original) Belvedere Condominium Unit Owners Assn. v. RE Roark Cos., Inc. (1993), 67 Ohio St. 3d 274, 282.
3. Common Interest Community
   1. Mandatory membership upon purchase (R.C. 5311.05(B)(7)
   2. Subject to governing documents i. (R.C. §5311.19) ii. The Bluffs of Wildwood Homeowners' Association, Inc. v. Dinkel (1994), 96 Ohio App.3d 278, 282.
   3. Shared use and enjoyment of property
4. Condominiums Are Not Castles
   1. “A unit owner should not be permitted to act in derogation of a condominium declaration whenever he or she may have a legitimate personal interest to advance in so doing. Condominium declarations established pursuant to Ohio's Condominium Act must be strictly construed, since the condominium concept depends upon reasonable use and occupancy rules and restrictions.”
   2. *** Every man may justly consider his home his castle and himself as the king thereof; nonetheless his sovereign fiat to use his property as he pleases must yield, at least in degree, where ownership is in common or cooperation with others. The benefits of condominium living and ownership demand no less. The individual ought not be permitted to disrupt the integrity of the common scheme through his desire for change, however laudable that change might be. *** Georgetown Arms Condominium Unit Owners Assoc. v. Super (1986), 33 Ohio App.3d 132.

B. How Condominiums Work

1. A community association is composed of homeowners to perform operation and management services for a residential community. All purchasers of homes or lots in a particular community are members of the association. Membership in the association mandates the members to follow certain obligations and rules of the association, and sharing association financial responsibilities. The community associations exist for single family, condominium and townhouse developments.
2. Condominiums provide unit owners a communal basis for preserving, maintaining, and enhancing homes and property values. They have three main characteristics: membership in the association is mandatory and automatic for all owners (unlike other associations where membership is voluntary); certain association documents defined all owners to the governing of the association, and requiring mutual obligations to be performed by the homeowners and the community; there are mandatory charges/maintenance fees or assessments levied by the association against each owner in order to operate and maintain the community association.
3. The purpose of the community association is to manage the property common areas and to manage homeowners' property interests. The association also provides various services for its members, including social activities. There are three types of associations: Planned Community Associations.
4. In condominium associations, a unit owner owns air space. The unit owner does not own the physical boundaries of the unit or land underneath same, however. A unit owner additionally holds a shared percentage interest in the common area.

C. Inspection of Governing Documents Contingency

1. Allocation of ownership interests
   1. Pro rata
   2. Per capita
2. Expandable condominium
   1. R.C. §5311.04(C) Attached
   2. R.C. §5311.05(C) Attached
3. Inspection of Documents
   1. Governing documents
   2. Minutes of Board meetings
   3. Minutes of unit owner meetings
4. Inspection of finances
   1. General budget
   2. Maintenance fees (increases)
      1. Increases
      2. Allocation for reserves
   3. Reserves
      1. Special funds
      2. Special assessments

D. Physical Inspection Contingency

1. Physical inspection
   1. Unit
   2. Evidence of water
   3. HVAC issues
   4. Soundproofing
   5. Common areas
   6. Roofs
   7. Structure (foundations, siding)
   8. Amenities (pool)
   9. Roadways

E. Costs (Maintenance free is not cost free)

1. Restrictions on capital improvements
   1. Restrictions on ability to spend
   2. Restrictions on special assessments

F. Restrictions on Alienation

1. General Rule: The Supreme Court, in Loblaw v. Warren Plaza, Inc. (1955), 163 Ohio St. 581, stated at 591-92: "The general rule, with respect to construing agreements restricting the use of real estate, is that such agreements are strictly construed against limitations upon such use, and that all doubts should be resolved against a possible construction thereof which would increase the restriction upon the use of such real estate. 14 American Jurisprudence, 621, Section 212. * * * "Where the right to enforce a restriction contained in the conveyance as to the use of the property conveyed is doubtful all doubt should be resolved in favor of the free use thereof for lawful purposes by the owner of the fee." See Hunt v. Held (1914), 90 Ohio St. 280; Arnoff v. Williams (1916), 94 Ohio St. 145; University Hills, Inc., v. Patton (C.A. 6, 1970), 427 F. 2d 1094. However, that disfavor is overcome if the evidence establishes the existence of a general plan or scheme, as well as notice to the purchaser of that plan or scheme.
2. Because they affect alienability of real estate, restrictive covenants, conditions, and restrictions are viewed with disfavor unless they relate to a general plan of which a purchaser has notice. Sprunk v. Creekwood Condominium Unit Owners' Assn. (1989), 60 Ohio App. 3d 52, 573 N.E.2d 197; Pineview Court Condo. v. Andrews , 1999 Ohio App. LEXIS 5060 (Oct. 28, 1999) Cuyahoga
3. Ohio law recognizes that restrictions such as the prohibition against constructing "fences" are enforceable as a matter of law when the restrictions are reasonable. Sprunk ; Georgetown Arms Condominium Assn. v. Super (1986), 33 Ohio App.3d 132, 514 N.E.2d 899; Beckett Ridge Assn.-I v. Agne (1985), 26 Ohio App.3d 74. “Contrary to defendants' arguments restrictive covenants are not viewed with disfavor in this context, despite affecting the alienability of real estate, when they relate to a general plan of which purchasers have notice. Id. Defendants admitted to constructing a "fence" on the Premises and plaintiff presented evidence from the real estate brokers and by virtue of the public recording of the Amended Association Restrictions that defendants had actual and/or constructive knowledge of this restriction. High Point Ass'n v. Salvekar , 1994 Ohio App. LEXIS 2986 (July 7, 1994) Cuyahoga
4. The purchaser of a condominium unit, as Ohio courts have noted, "voluntarily submits himself to the condominium form of property ownership, which requires each owner to '* * * give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property. Condominium unit owners comprise a little democratic sub society of necessity more restrictive as it pertains to use of condominium property than may be existent outside the condominium organization. * * *' Hidden Harbour Estates, Inc. v. Norman (Fla. App. 1975), 309 So.2d 180, 182. Worthinglen Condominium Unit. v. Brown (1989), 57 Ohio App.3d 73, 75, 566 N.E.2d 1275.
5. As a result: "an owner who unilaterally disrupts the general plan because he wants a change defeats the idea and purpose of condominium living." Sprunk v. Creekwood Condominium Unit Owners' Assn. (1989), 60 Ohio App.3d 52, 53, 573 N.E.2d 197.
6. No-leasing Amendments Restrictions on the transfer of cooperative corporation stock, as well as the right of a cooperator to sublet, have been repeatedly upheld as: "The only effective means by which tenants may control occupancy of the apartment, which is of primary interest to tenants who live in close proximity to each other and share common facilities. From the cases examined it appears that this restraint almost always takes the form of prohibiting transfer except with the consent of the board of directors." Sanders v. The Tropicana (1976), 31 N.C. App. 276, 280, 229 S.E.2d 304. at 281. In Wiesner v. 791 Park Avenue Corp . (1959), 6 N.Y. 2d 426, 190 N.Y.Supp. 2d 70, 160 N.E. 2d 720, the Court of Appeals of New York held that, in the absence of discrimination based on race, color, or ancestry: "There is no reason why the owners of the co-operative apartment house could not decide for themselves with whom they wish to share their elevators, their common halls and facilities, their stockholders' meetings, their management problems and responsibilities and their homes." Id . at 434. See, also, 68 Beacon Street, Inc. v. Sohier (1935), 289 Mass. 354, 194 N.E. 303. Undoubtedly, substantial restrictions on the right of a cooperator to transfer his or her interest in the cooperative are necessary to effectuate one of the main purposes and preserve one of the main benefits of the cooperative.

G. Areas of Restrictions

1. Rules and Regulations
   1. Noise
   2. Parking -- location, commercial vehicles
   3. Nuisance -- noise, guests, parties, nudity
   4. Pets
   5. Right of access (R.C. §5311.03(F))
2. Board Authority
   1. Can they assess unit owners
   2. Can they borrow
   3. Maintenance and repair versus capital improvements
   4. Limits on Board spending
   5. Open meetings / open records
   6. “Shall” versus “must” enforce
   7. Business judgment rule
   8. Architectural review committee
3. Governing Documents
   1. Common areas / Limited common areas / Unit
   2. Whose responsibility is it to make repairs
   3. Who has authority to make / mandate repairs
   4. Unit owner additions to their units
   5. Patios
   6. Patio enclosures
   7. Skylights
   8. Structural changes to the unit
   9. Adding gas lines
   10. Satellite dishes / antennas
4. Federal Legislation
   1. Americans with Disabilities
   2. Fair Housing Act
5. Condo Commando
   1. “Common sense is the collection of prejudices acquired by age eighteen.” Albert Einstein
   2. Not necessarily a bad thing

OHIO CONDOMINIUM ACT

R.C. Chapt. 5311

(pertinent provisions)

5311.03(F) UNITS DEEMED REAL PROPERTY. Each unit shall be subject to the right of access for the purpose of maintenance, repair, or service of any common area and facility located within its boundaries or of any portion of the unit itself by persons authorized by the board of managers of the unit owners association. No maintenance, repair, or service of any portion of a unit shall be authorized, however, unless it is necessary in the opinion of the board of managers for public safety or in order to prevent damage to or destruction of any other part of the condominium property.

5311.04 INTERESTS IN COMMON AREAS AND FACILITIES; REALLOCATION ON SUBMISSION OF ADDITIONAL PROPERTY; PAR VALUE; AMENDMENTS; COMMON EXPENSES

(A) The common areas and facilities of a condominium property are owned by the unit owners as tenants in common, and the ownership shall remain undivided. No action for partition of any part of the common areas and facilities may be commenced, except as provided in section 5311.14 of the Revised Code, nor may any unit owner otherwise waive or release any rights in the common areas and facilities.

(B) The declaration shall set forth the interest in the common areas and facilities appurtenant to each unit. For units in condominium properties other than expandable condominium properties, the interest shall be computed in the proportion that the fair market value of the unit bears to the aggregate fair market value of all units on the date the declaration is originally filed for record or shall be based on the size or par value of the unit. Except as provided in division (C) of this section, the interest in the common areas and facilities appurtenant to units in expandable condominium properties may be computed in any proportion or on any basis that is the same for units submitted by the declaration as originally filed and those submitted later by the addition of additional property and that uniformly reallocates interests of units previously submitted when additional property is submitted. If a par value is assigned to any unit, then a par value shall be assigned to every unit. Substantially identical units shall be assigned the same par value, but units located at substantially different heights above the ground, or having substantially different views, amenities, or other characteristics that might result in differences in fair market value may, but need not, be considered substantially identical. If par value is stated in terms of dollars, it need not reflect or relate in any way to the sale price or fair market value of any unit, and no opinion, appraisal, or market transaction at a different figure affects the par value of any unit.

(C) In the case of an expandable condominium property, the declaration shall not allocate interest in the common areas and facilities on the basis of par value unless it, as originally filed, does either of the following:

(1) Requires that all units created on any additional property added be substantially identical to the units created on the condominium property previously submitted;

(2) Describes the types of units that may be created on any additional property and states the par value that will be assigned to every unit that is created or proposed to be created.

(D) Except as provided in section 5311.051 of the Revised Code, the percentage of interest in the common areas and facilities of each unit as expressed in the original declaration shall not be altered except by an amendment to the declaration unanimously approved by all unit owners affected. The undivided interest in the common areas and facilities shall not be separated from the unit to which it appertains and shall be deemed conveyed or encumbered with the unit even though such interest is not expressly mentioned or described in the deed, mortgage, lease, or other instrument of conveyance or encumbrance.

(E) Each unit owner may use the common areas and facilities in accordance with the purposes for which they are intended. No unit owner may hinder or encroach upon the lawful rights of the other unit owners.

(F) All costs of administration, maintenance, repair, and replacement of the common areas and facilities shall be common expenses.

5311.05 DECLARATION AND INFORMATION REQUIRED; EXPANDABLE CONDOMINIUM DECLARATIONS

(A) A declaration submitting property to the provisions of this chapter shall be signed and acknowledged by the owner in the presence of two witnesses who shall attest the signing and subscribe their names to the attestation, and before a judge or clerk of a court of record, county auditor, county engineer, notary public, mayor, or county court judge, who shall certify the acknowledgment and subscribe his name to the certificate of acknowledgment.

(B) A declaration shall contain all of the following:

(1) A legal description of the land or, in the case of water slip condominium property, of the land and the land under the water area, thereby submitted to the provisions of this chapter;

(2) The name by which the condominium property shall be known which shall include the word "condominium";

(3) The purpose or purposes of the condominium property and the units and commercial facilities situated therein and the restrictions, if any, upon the use or uses thereof;

(4) A general description of the building or buildings thereby submitted to the provisions of this chapter, stating the principal materials of which it is or they are constructed and the number of stories, basements, and units therein, or a general description of each water slip and of the piers and wharves forming each water slip thereby submitted to the provisions of this chapter;

(5) The unit designation of each unit thereby submitted to the provisions of this chapter and a statement of its location, approximate area, number of rooms, and the immediate common area or limited common area to which it has access, and any other data necessary for its proper identification;

(6) A description of the common area and facilities and limited common areas and facilities thereby submitted to the provisions of this chapter, the percentage or percentages of interest therein appertaining to each unit, the basis upon which those appurtenant percentages of interest are allocated, and the procedures whereby the percentages appertaining to each unit may be altered, which percentages, basis, and procedures shall be in accordance with section 5311.04 of the Revised Code; (7) A statement that each unit owner shall be a member of a unit owners association which shall be established for the administration of the condominium property;

(8) The name of a person to receive service of process for the unit owners association, together with the residence or place of business of the person, which residence or place of business shall be in a county in which all or a part of the condominium property is situated;

(9) The method by which the declaration may be amended, which, except as provided in division (D) of section 5311.04 and section 5311.051 of the Revised Code, shall require the affirmative vote of those unit owners exercising not less than seventy-five per cent of the voting power;

(10) Any further provisions deemed desirable.

(C) In the case of an expandable condominium property, the declaration also shall contain all of the following:

(1) The explicit reservation of the declarant's option to expand the condominium property;

(2) A statement of any limitations on that option, including a statement as to whether the consent of any unit owners is required, and if so, a statement as to the method whereby the consent is to be ascertained; or a statement that there are no such limitations;

(3) A time limit, not exceeding seven years from the date the declaration is filed for record, renewable for an additional seven-year period at the option of the developer, exercisable within six months prior to the expiration of the seven-year period and with the consent of the majority of the unit owners other than the developer upon which the option to expand the condominium property will expire, together with a statement of any circumstances that will terminate the option prior to the expiration of the time limit;

(4) A legal description by metes and bounds of all additional property that, through exercise of the option, may be submitted to the provisions of this chapter and that, thereby, may be added to the condominium property;

(5) A statement as to whether all, or a particular portion, of the additional property must be added to the condominium property, or whether, if any additional property is added, all or a particular portion of the additional property must be added, and, if not, a statement of any limitations as to the portions that may be added or a statement that there are no such limitations;

(6) A statement as to whether portions of the additional property may be added to the condominium property at different times, together with any limitations fixing the boundaries of those portions by legal descriptions setting forth the metes and bounds of those portions, or regulating the order in which they may be added to the condominium property, or both; (7) A statement of any limitations as to the location of any improvements that may be made on any portion of the additional property added to the condominium property, or a statement that there are no such limitations;

(8) A statement of the maximum number of units that may be created on the additional property. If portions of the additional property may be added to the condominium property and the boundaries of those portions are fixed in accordance with division (C)(6) of this section, the declaration shall also state the maximum number of units that may be created on each portion added to the condominium property. If portions of the additional property may be added to the condominium property and the boundaries of those portions are not fixed in accordance with division (C)(6) of this section, the declaration shall also state the maximum number of units per acre that may be created on any portion added to the condominium property.

(9) Except in cases where the previously submitted condominium property contains no units restricted exclusively to residential use, a statement of the maximum percentage of the aggregate land and floor area of all units not restricted exclusively to residential use that may be created on any additional property or portions of additional property that may be added to the condominium property;

(10) A statement of the extent to which any structures erected on any portion of the additional property added to the condominium property will be compatible with structures on the submitted property in terms of quality of construction, the principal materials to be used, and architectural style, or a statement that the structures need not be compatible in those terms;

(11) With respect to all improvements to any portion of additional property added to the condominium property, other than structures, a statement setting forth both of the following:

(a) A description of the improvements that must be made or a statement that no other improvements must be made;

(b) Any restrictions or limitations upon the improvements that may be made or a statement that there are no restrictions or limitations upon improvements that may be made.

(12) With respect to all units created on any portion of additional property added to the condominium property, a statement setting forth both of the following:

(a) Whether all such units must be substantially identical to units on previously submitted land;

(b) Any limitations as to what types of units may be created on the additional property or a statement that there are no limitations.

(13) A description of the declarant's reserved right, if any, either to create limited common areas and facilities within any portion of the additional property added to the condominium property or to designate common areas and facilities within each portion that may subsequently be assigned as limited common areas and facilities, in terms of the types, sizes, and maximum number of such areas and facilities in each portion;

(14) Such drawings and plans as the declarant considers appropriate in supplementing the requirements of divisions (C)(4), (5), (6), (7), (10), (11), (12), and (13) of this section.

(D) In the case of a leasehold condominium development, the declaration shall also contain all of the following:

(1) With respect to any ground lease or other leases the expiration or termination of which will or may terminate or reduce the amount of the condominium property, a statement setting forth the county in which the lease is recorded and the volume and page of the record;

(2) A statement setting forth the date upon which each lease referred to in division (D)(1) of this section is due to expire;

(3) A statement as to whether any land or improvements of the condominium property will be owned by the unit owners in fee simple, and if so, either a description of the land or improvements, including a legal description by metes and bounds of the land, or a statement of any rights the unit owners shall have to remove such improvements within a reasonable time after the expiration or termination of the ninety-nine year lease or leases involved, or a statement that they shall have no such rights;

(4) A statement of the rights the unit owners have to redeem the reversion or any of the reversions, or a statement that they have no such rights;

(5) A statement that, subsequent to the recording of the declaration, no lessor who executed it, and no successor in interest to the lessor, have any right or power to terminate any part of the leasehold interest of any unit owner who makes timely payment of his share of the rent to the person designated in the declaration for the receipt of the rent and who otherwise complies with all covenants that, if violated, would entitle the lessor to terminate the lease.

5311.19 DEED RESTRICTIONS All unit owners, their tenants, and all persons lawfully in possession and control of any part of the condominium property shall comply with all covenants, conditions, and restrictions set forth in a deed to which they are subject or in the declaration, bylaws of the unit owners association, or administrative rules and regulations adopted pursuant to the provisions thereof, as any of the same may be lawfully amended from time to time, and violations thereof shall be grounds for actions for damages or injunctive relief, or both, brought by the unit owners association, by a unit owner or unit owners, or by both.

5311.20 ACTIONS BY OR AGAINST UNIT OWNERS ASSOCIATION; SERVICE OF SUMMONS In any action relating to the common areas and facilities or to any right, duty, or obligation possessed or imposed upon the unit owners association, by statute or otherwise, the unit owners association may sue or be sued as a separate legal entity. In any such action, service of summons or other process may be made upon the unit owners association by serving the same personally upon the president or other chief officer thereof or upon the person named in the declaration as the person to receive service of process therefor, or by leaving the same at the residence or place of business of such person set forth in the declaration. Any such action brought by or on behalf of the unit owners association shall be pursuant to authority granted by its board of managers.

5311.23 LIABILITY FOR NONCOMPLIANCE WITH CONDOMINIUM INSTRUMENTS; DECLARATORY JUDGMENT; CLASS ACTIONS A declarant, developer, agent, unit owner, or any person entitled to occupy a unit of a condominium property is liable in a civil action for damages caused to any person by his failure to comply with any lawful provision of the condominium instruments. Any interested person may commence an action for a declaratory judgment to determine his legal relations under the condominium instruments or to obtain an injunction against a declarant, developer, agent, unit owner, or person entitled to occupy a unit who refuses to comply, or threatens to refuse to comply, with a provision of the instruments. One or more unit owners may bring a class action on behalf of all unit owners. The lawful provisions of the condominium instruments may, if necessary to carry out their purposes, be enforced against the condominium property or any person who owns or has previously owned any interest in the condominium property.

An action by the unit owners association under this section may be commenced by the association in its own name, or in the name of its board of managers, or in the name of its managing agent.

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