Keltz v. Enchanted Hills Community Assn.
2014 Ohio 866
Ohio Ct. App.2014Background
- Enchanted Hills is a planned community whose 1969 recorded declaration set annual maintenance charges ($15 first lot, $5 additional) and required 60% of owners to sign written amendments. 1972 amendment (recorded) raised the fee to $25/$5.
- The Association incorporated in 1970 and recorded bylaws that authorized the board to impose additional membership dues and assessments beyond the declaration’s annual maintenance charge.
- Over the years the Association levied assessments (used for common expenses) in excess of the declared annual maintenance charge, relying on its bylaws; subsequent attempts to amend the declaration to authorize higher assessments failed for lack of required owner approval.
- Several lot owners sued for declaratory relief and refunds of amounts paid in excess of the $25/$5 assessment; one owner had earlier settled a related case agreeing that post-1973 purported amendments were void.
- The trial court held R.C. Chapter 5312 governs, and the Association cannot charge assessments for common expenses unless the declaration provides for or contemplates them; it ordered refunds where evidence supported overpayments.
- The Association appealed, arguing its pre-2010 recorded bylaws (and their assessment power) survived the Planned Community Act and therefore authorized the additional assessments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Association may impose assessments for common expenses pursuant to its bylaws rather than the recorded declaration | Lot owners: R.C. 5312.10(C) requires the declaration to provide for or contemplate assessments; the declaration (as amended) only authorizes the specified annual maintenance charge ($25/$5) and does not permit additional assessments | Association: Its 1970 bylaws (recorded before the 2010 Planned Community Law) authorize board-imposed dues/assessments and survive under R.C. 5312.02(C) as preexisting governing documents | The court held R.C. 5312.10(C) bars assessments for common expenses unless the declaration authorizes them; bylaws cannot expand authority beyond the declaration, so additional assessments were unauthorized and refunds were appropriate |
Key Cases Cited
- Mid-American Fire & Cas. Co. v. Heasley, 113 Ohio St.3d 133, 863 N.E.2d 142 (Ohio 2007) (standards for reviewing legal issues in declaratory judgment context)
- Woodcreek Assn., Inc. v. Bingle, 73 Ohio App.3d 506, 597 N.E.2d 1153 (Ohio Ct. App. 1991) (association may not unilaterally create restrictions absent authority in declaration)
- Cianciola v. Johnson’s Island Property Owner’s Assn., 981 N.E.2d 311 (Ohio Ct. App. 2012) (bylaws cannot authorize powers that the declaration does not grant)
- State ex rel. Ross v. Crawford Cty. Bd. of Elections, 125 Ohio St.3d 438, 928 N.E.2d 1082 (Ohio 2010) (legislative enactments control despite policy concerns)