Why would an HOA drop their Corparation Status?

Letting your corporate status lapse by mistake is not uncommon. And it's easily fixed. All that needs to be done is file some papers and pay a small fee.

Have never heard of any HOA letting their corporate registration lapse on purpose. Any lawyer who advised it is an idiot IMO>

When your HOA is not recognized as a corporation, each of the owners is individually responsible for any liability that would have fallen on the corporation.

Simple:

They are, in the medical sense, imbeciles.

Imbecile:

NOUN
1.
a stupid person.

synonyms: idiot · ass · blockhead · dunce · dolt · ignoramus ·
[more]

ADJECTIVE
1.stupid; idiotic:

"try not to make imbecile remarks"

The words moron, imbecile, and idiot mean different things. In psychology, an idiot has the least intelligence on the IQ scale (this now is equivalent to someone who is mentally retarded or the more politically correct “mentally challenged”); an imbecile is not quite as dumb as an idiot and is now considered equivalent to moderate retardation; a moron is then the highest level of intelligence for someone who is mentally retarded, thus considered as being mildly mentally retarded. Specifically, those who have an IQ between 0 and 25 are idiots; IQs between 26 and 50 are considered imbeciles; and those who have an IQ between 51 and 70 are considered morons.

I tried that process Tim, so, I took them public and contacted 295 Members, via the US Postal Service. I hope this is not against the rules for referencing our own community website, but this is what these Members will read, via our investigation.

http://www.stratfordcondo.us/corporation-terminated/

That's funny. My best defense is I know my HOA Docs, inside and out. More importantly, I know my State Laws, concerning The Va Condo Act, even better. I live by the rule that if you are not in compliance, get there! The only thing they can do to me, is write me violation letters. If they do, and I am in the wrong, I will comply ASAP. Then I will demand the same enforcement for the rest of my Community. If others get angry, I will simply state that I have no desire to be treated as a second class citizen, any more then they would. If nothing else, it may just get them to the Meeting. My fight will never be with my Board, it will always be with the proper enforcement of my CCR's.

Dana,

Better question:

Does your declaration specify that your association must be incorporated ?

If yes - all remains as it was.

If not - they are STILL imbeciles (who probably WILL make your life miserable.

Dana,

In a condo each owner has a deed to a specific piece of real estate and an undivided interest in the all the common areas. The association owns no property at all. What would be the advantages of having an incorporated association that has no assets?

If I slip and fall in your common area, you and the other owners may have a personal liability to me as it is your property. Having an incorporated association does not change that fact.

Your board should have given the members some notice that it was surrendering its corporate status, but I do not see a big problem with an unincorporated condo association.

Larry, it is my understanding that even-though each Unit Owner has a equal interest of our common elements, by not being incorporated, we could all be named as co-defendants, as per the example you gave above. If we are incorporated, then all you can do is go after the BOD as well as our insurance company. Our BOD is also protected under a Indemnity clause, to protect them as individuals, as per the Virginia Non Stock Protection Laws. That is why I could not believe they did this. If nothing else, they lost their protection as well as our own.

In most cases Articles of Incorporation don't do much more than identify the name and type of the corporation and it's address of record.

It's merely a registration process, not a set of rules to follow.

Posted By KerryL1 on 07/19/2016 6:13 PM. "I know next to nothing about this topic as you'll soon see. You have Articles of Incorporation, right, Dana? How does an HOA undo or ignore its Articles? And what do they say"?

Some HOA Boards will do things without informing their Association Members. It is done in secret and they assume no one will even notice. To do away with any Corporation, you just don't pay the renewal fee. In Virginia, to do it properly, you submit the required form with a $50.00 check. As far as what they say, all they have said is they did it under the advice of their Attorney. Please keep in mind that this matter just came to light, it will be the first question asked at our next meeting.

Posted:7/19/2016 6:32:01 PM by NpS (Pennsylvania). "In most cases Articles of Incorporation don't do much more than identify the name and type of the corporation and it's address of record. It's merely a registration process, not a set of rules to follow".

You are partially correct. While our CCRs or Articles of Incorporation carry no rules or regulations, they do place us under the authority of the Virginia Non Stock Corporation Act. These are State Laws that can be enforces, with very little effort, depending on if and how, they are being abused. They set forth the rules and regulations that must be followed. https://vacode.org/13.1/10/

Posted:7/19/2016 9:03:34 PM by LarryB13(Arizona). "I am also of the belief that a big insurance policy is a magnet for hungry lawyers. Eliminating the corporate shield and dropping the insurance may discourage a lot of potential claims. Have you asked your board for a copy of the lawyer's advice to drop the corporate status? It would be nice to know his reasoning".

Dropping our insurance coverage down is not an option. By dropping our corporate shield, IMHO, they simply put us all at risk and targeted us as co-defendants. They offered no reasoning for doing so, other then it was done under legal advice. I truly due expect their next comment to be: "We can not discuss this situation due to Attorney Client Privilege".

As far as the example you gave for your lawsuit, I am not an Attorney, nor do I play one on the Internet, this statement is concerning the requirements for filing a small claims case in your State:

"Get the facts straight so you can complete the forms correctly and answer any questions court personnel may need to know. Be sure to obtain the correct legal name of the defendant, correct address and place/address of employment. If the defendant is a Corporation or Limited Liability Company you would use the legal corporate or LLC name as the defendant. If the defendant is a Corporation or LLC, you may need to contact the secretary of state in your state and obtain the proper name and address to serve with a copy of the suit. This person is called a registered agent and is designated by the corporation to receive process or summons when the corporation is sued. Be sure to also contact the small claims court to determine the filing fee for filing the claim".

You can read the article here. http://smallclaims.uslegal.com/small-claims-laws-by-state/arizona-small-claims-law/

On a side note. Could someone please explain to me how to do multi-able quotes in responding? Thanks.

Kerry asked the question whether there was anything in the Articles of Incorporation that should be looked at. My answer was no, with a brief explanation that, in most cases, the document itself is just a registration form. It should go without saying that a registered corporation is subject to the corporate laws of the state.

Thanks Tim. I did do a search via this website, but it kept kicking it back as "Service Unavailable". The thread you referenced, looks to state most of what is being stated, in this thread as well.


You are correct, I meant no offense. I will pay closer attention.


Thanks for the OJT!! ;-)

Since, as we've learned from Tim, VA, like CA, is an open meeting state, I would be very annoyed that this major decision was made behind Owners' backs.

We booted out a Board for such secrecy--maybe it's time for you & others to boot out yours.

If nothing else, I hope you and other Owners ask tough questions of the Board at your next open meeting, as you've suggested. When something like this is done illegally, you're worried, I'm sure, about what other actions have been done in secret.

Dana

Do not be so sure your questions will be included in the Minutes. Quite often all that has to be in the Minutes are Motions made and the results, nothing else.

But, Dana, JohnC is right. Unless there's a board policy that Owners' comments will be note in the minutes of board meetings, the Board doesn't have to include your comments, questions, etc.

Our Board does happen to have a policy--though not required in CA-- that all Owner comments, questions, etc., during our open forums are recorded in the minutes.

I went through the last 12 months worth of our open meeting minuets, and they had questions asked by the Members, included. Whether they include ours, remains to be seen.


Thanks Tim, @NpS showed me the light but I did bookmark your reference link. ;-)


Thanks for your advice. I will see if I can find any similar verbiage via our State Laws.


You Sir, get the "Gold Star". Your comment gave me the idea of simply setting up a time next week and requesting to view all our records, via our PMC. That should show / tell me what they keep on record and what they do not.

Our homeowner's association dropped its corporate status some years ago. They just want to be a loosely run group. If your membership is not mandatory, then drop out if it makes you feel uncomfortable.

I visited their insurance man and he assured me that they have general liability of one million $$$ and D&O liability coverage, so I kept my membership.

And that insurance won't help you pay for defending yourself when named in a lawsuit due to the lack of a corporate shield.

DanaT (Va)1- You mentioned your community is subject to Va's Condominium Act ch 55
http://law.lis.virginia.gov/vacodepopularnames/condominium-act/

A stroll through that seems to show neither a governance body's obligation to incorporate nor - unlike my own jurisdiction's - any automatic statutory incorporation instantaneous upon registration of the Declaration.

I am unsure why a Board would consider it a sound business judgement to remove a barrier protecting stakeholders from degrees of personal exposure where existing insurance might fall short. Or subjecting individual owners to conventional litigation in lieu of a common incorporated entity. Nor why it would appear to prefer 'complicating' its own legal scope to contract including to literally obtain the insurance required by Va law, to sue for unpaid contributions . . etc

2 - What's your own next step ? What else has your Board decided to quietly phase out ?

The recall would need to be done at either the annual meeting of members or a special meeting of the membership.

If you do go this far, make sure that the petition calls for the right thing.

The petition should be to call a special meeting of the membership for the purpose of recalling Director a, b, c, and, if successful, to elect individuals to fill the empty seats and the remainder of the Directors term.

The petition should not be to recall directors. That type of petition would only be advisory.

Dana,

As that is unusual, would you please cite the language of the entire section dealing with recalls?

As I pointed out, this is typically done only at general membership meetings and not at board meetings.

Tim, all our meetings are open EXCEPT when the Board meets in Executive Session, at the end of our meetings. Our Bylaws clearly state that we are to have HOA Meetings, every 2 months. Our BOD has elected to do this every month. I have our docs listed and available for download from our Community Site, however, it is against the rules to list any community on this forum. If you provide me with a link, you can read them yourself.


Please see above. I have no desire to type out 2 pages concerning our requirements for HOA Meetings. And yes, our annual meeting is referred to as, our annual meeting.

Thanks Tim, I will send the link, with the pdf page number as well as the Deed Book and page number. I would have posted my own contact link, but, I really don't know all the rules yet. I will have it to you in 5 min. Thanks, Again!

I have been designing sites for over 15 years. I have so many e-mail addresses, that to delete less then 300 spams a week is not uncommon. Recently, I just run all into one master account, use Apache slam hammer and white lists, and go with the flow. I may get 5 or 6 a week now. p.s. You have mail.

Sorry Tim, I was Picnicked. Check it now. [email protected] <-- correct address. My spelling --> tim_at_work@veriz(I)on.net.

Tim if you look at my post in this post below, it states that I would call for a "Special Meeting", whether I can get the amount needed, no one can say. Thanks for your advice.