HOA Legal status

Started by JaneS3 • 9 replies • 1364 views

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JaneS3 (Utah)
Posts: 5

Posted:

Our HOA, after 6 years, is still using the original developers defunct corporation By-Laws. We have not incorporated and are using a name, legally registered and currently incorporated of another HOA?
We have officers, but I question, officers of WHAT?
Where does the authority come from from State Comon Law?
I am worried. What is our standing. Further, these officers asked another officer to resign, he refused. So they send a newsletter out, soliciting applicants for his position. Is there a legal remedy?
Thank you,
Jane

RogerB (Colorado)
Posts: 5,067

Posted:

Jane, you are not required to be incorporated. I would, and select a name which is slightly differing from the name already assigned to another HOA. For example if their name is "The Ridge Homeowners Association" you might try to get incorporated as "Ridge Homeowners Association".

The officers are determined based on your existing By-laws which are valid. Incorporation makes no difference. The By-laws should be followed for selecting and removing Board members. If they are not, the best remedy is to remove those Board members who knowingly chose to ignore the By-laws.

JaneS3 (Utah)
Posts: 5

Posted:

Thank you so much, Roger, for your response. It really helps.
Jane

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Jane,
Might be a good idea to network with another nearby HOA and compare documents. Also does your state have an HOA law. What documents are you working with, six year old documents may be fine, it's not the age, it's the content that is important.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Jane,
Are you saying the Documents you use have no authority? Are you registered with the state as a specific entity? More information.

JaneS3 (Utah)
Posts: 5

Posted:

Thank you. We are not registered with the state. I believe the state has a HOA law, but I will check. At any rate, this all is helpful.

DaneC (California)
Posts: 210

Posted:

Here is an example of the places one could look to in CA for copies of documents -
Department of Real Estate - subdivision approval requires submission of docs.
County Registrar's office - docs may have been filed by the developer
Franchise Tax Board - if applying for tax exemption (as required most times in CA)
and the Secretary of State Office - if Incorporated.

WARNING, because the name and address looks like another association, IT MAY NOT mean that it is not you, since I have seen MANY such errors in CA - folks simply find a name on the SS website, and submit a form, and presto the record of an association in Southern California suddenly becomes that of an Unincorporated Association in Nothern California.

Also with the passage of time, names tend to be abbreviated, and end up without much resemblance to the initial name. This brings up another lead, contacting the IRS to ascertain the original name used when they applied for the TIN.

JaneS3 (Utah)
Posts: 5

Posted:

Thank you Dane. Helpful. I know exactly what happened, but not sure it is legal. The developer formed the corporation in approximately 1997. Once sold out,the corporation, in 2001, expired for failure to file for renewal.
However, this HOA, still hands out Welcome Packets, representing themselves as that defunct corporation, even though they have not filed with the state, county, city as to an exisiting entity.
There is an active corporation with the same name, different property and board of directors,in existence within a few miles away.
Now what?

DaneC (California)
Posts: 210

Posted:

Quote:

Posted By JaneS3 on 10/09/2007 2:39 PM
Thank you Dane. Helpful. I know exactly what happened, but not sure it is legal. The developer formed the corporation in approximately 1997. Once sold out,the corporation, in 2001, expired for failure to file for renewal.
However, this HOA, still hands out Welcome Packets, representing themselves as that defunct corporation, even though they have not filed with the state, county, city as to an exisiting entity.
There is an active corporation with the same name, different property and board of directors,in existence within a few miles away.
Now what?

There are 3 ways you can be suspended - 1) for failure to file the Statement of Information (SI-100) 2) failure to file the Statement of Information Common Interest Development (SI-CID) 3) failure to file State tax returns (nonprofit does not mean tax exempt - http://www.ftb.ca.gov/forms/misc/927.pdf

Once suspended, you lose the rights to your corporate name, and it can be reused by another entity - http://www.swlearning.com/blaw/cases/business/0501_business_01.html

By law, only two powers, rights, and privileges of a corporation cannot be suspended or the exercise thereof forfeited: (1) the ability to file an application for tax exempt status, and (2) the ability to amend its articles of incorporation to perfect an application for exemption or change its name. Case law provides that a suspended or forfeited corporation loses the right to defend any suit that may be brought against it in this state. It is a misdemeanor for any person to attempt or purport to exercise the corporate powers, rights and
privileges of a suspended or forfeited corporation.
http://www.ftb.ca.gov/law/legis/97_98bills/ab1950_021798.pdf

Basically, if a unit owner refuses to pay assessments, .................

JaneS3 (Utah)
Posts: 5

Posted:

You are in the know. Does not surprise me, but that is what I thought. No IRS filings, no non-profit filings, no public filings as to an existing entity. Simply concerned about my home under these dire circumstances.
Now the decision tree?
1. Sit back and see how it plays out.
2. Sell, as some have, without difficulty. Market is still good.
Thank you so much,
Jane

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