91 N.E.3d 61
Oh. Ct. App. 5th Dist. Fairfie...2017Background
- Haaf Farms subdivision recorded a 1989 Plat and a November 17, 1989 Declaration for Section 1; the 1989 Declaration imposed residential, easement and drainage restrictions but did not create an HOA or assessment obligation.
- Lot 51 was conveyed out of developer Homewood Corporation on June 4, 1990 to Status Homes before Homewood recorded a September 19, 1990 Declaration that created Haaf Farms HOA and authorized annual assessments.
- Plaintiffs (Barry and Susan Lubow) acquired Lot 51 in 1994–1998; their chain of title contains the 1989 Declaration but not the 1990 Declaration.
- Haaf Farms HOA incorporated in 1990 and later sought to collect annual assessments from the Lubows for multiple years; the Lubows paid some assessments under protest and sued for declaratory relief in 2014.
- The trial court found the subdivision was a "planned community" under Ohio Rev. Code Chapter 5312 but held Lot 51’s owners were not obligated to pay HOA assessments because the 1990 Declaration (which authorized assessments) was outside the Lubows’ chain of title.
- The appeals court affirmed: although Chapter 5312 applies to planned communities, it does not eliminate the common-law requirement that enforceable covenants conveying assessment rights must be in the owner’s chain of title or give constructive notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lot 51 owner must pay annual HOA assessments | Lubow: not obligated because Lubows’ chain of title lacks any recorded declaration authorizing assessments | Haaf Farms: Chapter 5312 empowers HOA to collect assessments for planned communities regardless of whether a later-recorded declaration is in Lot 51’s chain | Held: No obligation — the 1990 Declaration authorizing assessments is outside Lubows’ chain of title and Lubows lacked constructive notice, so assessments cannot be enforced against Lot 51 |
| Whether subdivision qualifies as a "planned community" under R.C. 5312.01(M) | Lubow: (disputed at trial) | Haaf Farms: subdivision is a planned community | Held: Court found the subdivision is a planned community, but that status alone did not permit levying assessments on Lot 51 absent notice/chain-of-title linkage |
| Whether Chapter 5312 supplants preexisting chain-of-title requirements | Lubow: Chapter 5312 does not abrogate common-law notice/chain-of-title principles | Haaf Farms: Chapter 5312 controls where governing documents are silent and authorizes assessments | Held: Chapter 5312 supplements governing documents but does not override chain-of-title/constructive-notice doctrine; a declaration must be in record to bind a bona fide purchaser |
| Whether the 1989 Declaration or 1990 Declaration governs Lot 51 | Lubow: 1989 Declaration (no assessment provision) governs Lot 51 | Haaf Farms: 1990 Declaration (assessment provision) applies to subdivision owners | Held: 1989 Declaration is in Lubows’ chain of title and controls; 1990 Declaration is outside their chain of title and cannot be imputed to them |
Key Cases Cited
- Emrick v. Multicon Builders, Inc., 57 Ohio St.3d 107, 566 N.E.2d 1189 (1991) (a bona fide purchaser for value is bound by an encumbrance on land only if they have actual or constructive notice)
- Abood v. Weingarten, 135 N.E.2d 899 (Ohio 1956) (addresses constructive notice principles for real property encumbrances)