HOA - Incorporation

I am not an attorney, but I am a community manager who has consulted attorneys on this very topic. A corporation provides an extra layer of protection for the association and its individual members against liability (lawsuits). However, adequate insurance coverage may accomplish the same goal. There is no requirement that a community association be incorporated, but incorporating does create a taxable entity that can borrow and conduct other business. Again, a community association is an entity that can do the same thing, but sometimes it is easier as a corporation. Personally, I prefer incorporation, but absent the corporate veil, be sure you have adequate liability coverage including hired and non-owned vehicle (for your board members and volunteers who might be conducting association business in their personal vehicles), workers compensation for volunteers (in case a volunteer worker is injured) and boiler & machinery (for power spikes originating in community owned equipment that might damage privately owned equipment)