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Condo | HOA Lawyers

Don’t Fret Over Moratorium Bill

Our office has been getting numerous calls from board members and managers concerned with the proposed foreclosure moratorium in the Ohio legislature. As has been widely reported across the State, the Democratic controlled House passed House Bill 3, which would place a six month moratorium on mortgage foreclosures. At this time, Kaman & Cusimano, LLC does not believeOhio’s community associations have cause for concern. First, the legislation appears to only apply to mortgage foreclosures (i.e. lender banks) and not any other type of lien holder such as a condominium or homeowner association foreclosure. Additionally, this moratorium legislation now faces the daunting and extremely unlikely task of passing in the Republican controlled Ohio State Senate. With the Senate busy trying to fix the budget crisis and many senators questioning the constitutionality and effectiveness of moratorium legislation, House Bill 3 does not appear to have enough support to become law.

Even if a six month foreclosure moratorium would become law, prior experience has shown that a foreclosure moratorium may have a positive effect on community associations. As indicated at our recent Financial Crisis Seminar, the good news for community associations is that moratoriums often give the lender bank a chance to work out a payment plan and revised mortgage terms with the unit/homeowner. In order to file the new mortgage, the lender bank is usually paying the association in full, including attorneys’ fees and court costs, to remove the association’s lien and stop the association’s foreclosure.

As is indicated above, there is no need for Ohio community association board members or managers to fret over the impact of the passage of Ohio House Bill 3.


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