Dues Must be Pleaded to be Recoverable in Ohio Foreclosure Cases

If lenders make advances for condominium or homeowner association dues, Ohio law firms should plead those amounts with specificity. In Lakeview Loan Servicing, LLC v. Soldat, 2024-Ohio-4676, the Eighth District Court of Appeals specified how to recover condominium association dues advanced by a lender or loan servicer. Taking it a step further, the case will also likely apply to reimbursement of homeowner association dues advanced in Ohio.  

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What the Soldat Case Held

In Soldat, the subject mortgage contained a rider that allowed the lender to pay condominium dues and assessments if the borrower did not pay them. Per the rider, the additional debt would become secured by the mortgage if a notice was sent to the borrower requesting payment and the borrower failed to make said payment.  

Following the borrower’s default, the lender initiated a foreclosure action. In its Complaint, the lender did not specifically reference the rider in its Complaint and did not specifically request reimbursement for “condominium dues advanced”. After obtaining judgment, the property sold to a third-party purchaser. In accordance with County rules, the lender sought reimbursement from sale proceeds for advances that it had made, including condominium dues totaling $12,965.97. The Court denied the request for reimbursement, on the basis that neither the foreclosure decision nor Ohio law provided for advances of condominium association dues.  

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Why the Court Denied Reimbursement

The lender appealed the trial court’s decision, arguing that the trial court had abused its discretion in the ruling, as both the condominium rider and R.C. 5311.18(B)(5) allow recovery for condominium dues. The Eighth District Court of Appeals rejected that argument and affirmed the trial court’s decision. The Court reasoned that Ohio law does not provide for reimbursement of condominium dues when R.C. 5311.18(B)(5) covers only “common expenses” and not “dues”. The Court further noted that the lender had neither referred to the rider in its complaint nor requested judgment covering the unpaid dues. The Court also noted that the servicer could have objected to the Magistrate’s Decision and/or appealed the Judgment Entry and Decree of Foreclosure issued in the case as neither ruling had called for the reimbursement of said dues.  

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Practical Pleading Considerations Going Forward

By extension, a similar argument may be made related to homeowner association dues. As such, best practices for reimbursement of dues paid for either condominium association dues or homeowner association dues should be pled specifically in the Complaint, dispositive motions, and judgment entries submitted to the Court. Affidavits in support of judgment should include line items for those amounts advanced by a lender or servicer. Lump-sum requests for reimbursement are coming under more scrutiny in general and are increasingly subject to objection by Courts, junior lienholders, and borrowers. Based upon Soldat, lenders and counsel should ensure that their documents include the amounts advanced for these items in order to ensure recoverability.  

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Key Takeaways

1. Specific pleading is essential for recoverability. In Ohio foreclosure actions, advances for condominium or homeowner association dues must be expressly pleaded in the complaint and carried through dispositive motions and judgment entries to preserve reimbursement.

2. Statutory authority is narrowly construed. As Soldat makes clear, R.C. 5311.18(B)(5) allows recovery of “common expenses,” but does not automatically extend to association dues unless properly supported and pleaded.

3. Mortgage riders alone are not enough. Even where a condominium or HOA rider permits advances, lenders must specifically reference the rider and request reimbursement in their foreclosure pleadings and judgment language.

4. Documentation and precision reduce risk. Affidavits should include clear line items for dues advanced, as lump-sum reimbursement requests are increasingly scrutinized and subject to objection by courts, junior lienholders, and borrowers.