HOA Status / Incorporation Forfeited

We have having some difficulty with our HOA being overbearing over the years.

I just realized that the incorporation of our HOA was forfeited (per the Maryland business entity search) due to a failure to file annual documents for the last 30 years (neighborhood built in 1993). Despite this, it has been operating, collecting dues, and enforcing restrictions since then.

As I look into this some more, the Articles of Incorporation we were presented with upon purchase and that are posted on the website are not even fully signed in all the right places.

I am curious about a few things:

- Where would I specifically find the document that legally ties us to the HOA? There is nothing on our deed that mentions an HOA or covenants at all. I don't remember signing anything when we purchased over 10 years ago.

- If the HOA does not even legally exist as a business, can they even collect dues and enforce anything? I would think they would have no legal basis in court.

- If they file the annual reports and "resurrect" the corporation, can they still mandate that all owners remain part of the HOA?

- What about any "violations" or "modifications" that happen while it is not in good status?

Honestly, I only discovered this yesterday. I have not brought it up to them because the more I look into it, it seems like their whole existence is make-believe. I do not want to lose an opportunity to be able to have the freedom to trim a tree, paint a shed, or anything similar if they have no legal basis to question everything I do. It even looks like, if I wanted, I could start a corporation using the name they previously forfeited.

The 3-member board has been having closed-door meetings with no announcement (violates State Law) and has continued to collect dues and hold annual meetings with a budget for the entire time we have lived in the neighborhood. Many of the actual restrictions they have on things like the American flag, clotheslines, etc. are also in violation of State Law.

I see "forfeited" is the legal term the Maryland Dept of Taxation and Assessment uses. “ 'Forfeited' means the right of the entity to conduct business in the State of Maryland has been relinquished and it has no right to use its name. For domestic corporations, this also means that the business has no existence under the laws of the State of Maryland."I hear you. However from general reading over the years, I believe the law says that as long as an owner is deriving a benefit from the HOA, then the owner owes dues (or at least a part of the dues).

In addition if the covenants establish an "association," then the covenants themselves might legally obligate owners to pay an assessment. This is regardless of incorporation or non-incorporation.

What services does this HOA provide? Maintenance of roads? A park? Any utilities? Drainage infrastructure? Sidewalks? Easements for the HOA's use? Something else?

Look in two places:

1.
The seller's disclosure statement (from some ten years ago). It is likely this says something about the presence of either covenants or a HOA.

2.
The county clerk. Go to the county clerk offices and ask them to help you locate any covenants applicable to your lot. I would be very surprised if there were no covenants.

Until you identify whether covenants exist, I think answering your other questions would be too much speculation.

Another thing to check is your Articles of Incorporation to see what powers in it are granted to the corporation since those powers while the corporation is forfeited are nonexistent.

In California, if an HOA is a corporation, it gets its power from the corporations code which makes an association's actions subject to the Articles of Incorporation. You can put whatever you want in the covenants but if there is no power granted to it by the corporations code and the articles, an HOA has no power or authority to enforce the covenants.

TerriS6 and I will have to agree to disagree on this point.

For one thing, a HOA in suspended status in California still must pay its bills. See https://www.davis-stirling.com/HOME/S/Suspended-Corporation

For another thing, nationwide including California, CC&Rs prevail over the Articles of Incorporation. See https://www.davis-stirling.com/HOME/H/Hierarchy-of-Documents.

If TerriS6 posts something to change my mind, I will post back on this point. Else my opinion stands.

I found the above particularly helpful.