Revoked Corporate Charter Reinstated

Started by TomW21 • 4 replies • 965 views

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TomW21 (Louisiana)
Posts: 6

Posted:

My HOA, which was formed in the mid 80's, unknowingly let its corporate charter expire and was revoked by the Sec. of State in the late 90's. The Secl of State has recently reinstated our corporate charter and 'set aside' the revocation.

Our concern is now does 'set aside' mean essentially that the revocation never occurred and we are back in business as usual? The by-laws state that every owner is automatically a part of the HOA. Does this mean that it is still mandatory for all owners to belong to HOA and have to still pay dues, assessments, etc.? Does this also mean that people who bought homes during the period when the charter was revoked automatically part of the HOA? The HOA continued to operate as normal during those years with annual meetings etc.

Is it fair to say that the burden of proof is upon the homeowner to prove that they do not have to be part of the HOA?

Most homeowners have no issues with the situation. About three are not paying their dues (dues issued since the reinstatement) and are under the belief that do not have to be part of the HOA even though the by-laws say they do.

Thank you in advance for any help.

BenA2 (Texas)
Posts: 1,273

Posted:

Unless your state law says something different, an your association does not have to have a state charter or incorporation to exist.

I assume it's your Covenants, Conditions, and Restrictions (CC&Rs) that require membership in the HOA (bylaws usually dictate the operation of the organization and does not put conditions on ownership). If the CC&Rs require membership, the status with the state should not matter.

Every state has different laws and case law though, so it is best to seek an attorney's opinion.

DouglasK1 (Florida)
Posts: 2,046

Posted:

I agree with Ben that letting the state corporation registration expire does not extinguish the association since the association is established by the CCRs and the CCRs are still valid. Having a corporation does provide important legal protections to the members should the association be sued, for example, so is best to keep registered.

Escaped former treasurer and director of a self managed association.

TimB4 (Tennessee)
Posts: 21,059

Posted:

As others have said, there are two entities.

The unincorporated Association, created by the Covenants. Lets call this simply HOA

The second entity is the incorporated Association, created by filing paperwork with the State and maintained by filing annual reports. This would be called HOA, Inc.

Being incorporated provides many advantages to the Association and it's members. However, there are unincorporated HOAs.

If the State administratively dissolved the Association, depending when the Association became aware of the decision, it's easy to have the Association reinstated. Worst case, if too much time went by, the Association will simply have to reincorporate by refiling all the necessary paperwork.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Welcome to the Forum.

Generally during any time the HOA is not in compliance for some States the HOA during that time period cannot enforce or impose fines for not following the CCR’s. This is why it is important to stay within compliance with regard’s to your State Laws.

Any owner who potentially claims they are not part of an HOA just needs to look at their Title Insurance document. YEP ... that document is supposed to note any and all ENCUMBRANCES against the Property Title. I bet theirs will note they are a part of XYZ HOA wth Covenants noted at X Page of X Book as filed the the County Records!!! Which of course is filed against their Property Titles ... LOL.

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