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Can a Delinquent Owner Rent the Unit while in Foreclosure?

A question Kaman & Cusimano is often asked is whether there is anything an association can do if a unit is being rented while it is pursuing a Complaint for Foreclosure against a delinquent owner.  The answer to that question is “Yes.”  Ohio statutory law allows an association to have a receiver appointed to collect rent from the tenant of a delinquent owner.  The receiver would then provide this rental income to the association to apply to the delinquent owner’s account.

Specifically, both Ohio Revised Code Sections 5311.18(B)(2) and 5312.12(C)(1), state that the community association is entitled to the appointment of a receiver to collect the rental income in a foreclosure action.  Additionally, many associations have governing documents with specific provisions that maintain that the association has the right to have a receiver appointed to collect rent while the foreclosure case is pending.

The courts have recognized that it is inequitable for a delinquent owner to receive rental income while not paying an association’s maintenance fees for the services provided.  Therefore, courts have enforced an association’s right to have a receiver appointed, which allows an association to recover funds while the foreclosure case is pending.  If you believe that a unit is being rented, it is important to notify our office as soon as possible.  Additionally, please provide any information that you have regarding the tenant, including a copy of the lease, and the contact information for the tenant.