Involuntary Dissolution - HOA D.O.A. Update

I want to acknowledge the time and thought given in all of your valuable responses. They’ve proven very helpful. Thank you very, very much. With that said...

I just spoke with the IL Sec. of State’s office. I learned that our HOA’s corporate status (a corporation, not LLC) was involuntarily dissolved in 2017; no annual report was filed, and none have been since.

What does this mean for the status of our HOA as a whole? Does it even exist anymore? Do the CC&Rs and bylaws no longer apply? Are we no longer insured/insurable?

Thank you in advance!

Oh pooh. Somebidy dropped the ball because notifications are sent from the State about this lapse to your Registered Agent’s address several times. If THIS was missed, was the IRS filing missed too?

You can file the Annual Report and pay a fine for the missed years. But the IRS may want you to re-file again as a non profit. Check the IRS non profit filings . They are online.

You have a real problem. I was an HOA president for 12 years in a highly toxic environment. From a bad guys perspective this is pure freedom. Your goal is very simple: get back into legal compliance ASAP. A dissolved corporation has no authority and the potential resulting chaos means you lose your property value. That's a big deal when most people's biggest investment is their home. Get a lawyer. Gain back your legal status and do it quick.

Erin

The association might well exist. All you know at this time is someone did not file a document with the state. Do not assume your association went bye bye.

Are there still obligations like dues being collected, taxes being paid, trash collection, maintenance, cleaning, whatever, still going on? If so, there is still an association.

Might be time to talk to neighbors. Gather a few with similar questions and lawyer up.

Adding to what others said, losing one's corporate status doesn't necessarily mean that the HOA is dissolved. I agree that you should get a legal opinion on this and get your corporate status renewed ASAP.

Right now, without the corporate shield, you no longer are insured. This means that the homeowners are jointly and personally liable for any legal action taken against your association; for example, someone may be injured on the HOA's property and sue. In addition, without Directors and Officers insurance, any board member is personally liable for their actions. No one should ever put their personal assets at risk in order to serve on a board. Finally, HOA insurance often includes something called Fidelity insurance, or Employee Dishonesty insurance. This insures your HOA's funds against theft and the like. All of these things are critically important, and the insurance issue should be tackled immediately after getting your corporate status renewed.

Erin, you do need to do whatever needs to be done to address this matter with the state.

I'm not an attorney and will not opine as to whether or not the corporation as been "dissolved" or is simply shown on the records of the state as being "inactive", which is precisely what takes place in Texas--if annual filings are not made as required, the Corporation is listed on the records of the state as being "inactive". In Texas the corporation can be reactivated fairly simply by filing the proper documents and paying fees for not having timely filed. The person who used the word dissolved may not have fully understood the meaning of the word in the context in which it was used.

You may not have to engage an attorney to address this situation, when it happened here to an association we were subsequently engaged to manage, the personnel in the office of the Secretary of State and the Comptroller were extremely helpful in describing what actions and filings were necessary, to the point of telling us where to find the forms and where the local offices were located instead of dealing with Austin. You may wish to conduct some basic research before engaging an attorney at $350+ per hour.