Do You Need To Register A Homeowner's Association In Ct

State HOA Registration Requirements--What You lot Should Know

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Some states require HOAs to annals with the state, and if your homeowners association fails to do so, it could lose certain rights. Could you even lose your lien rights and the ability to enforce recorded covenants? Hither's a lowdown on state registration requirements and an answer to that all-of import question.

The skinny on country HOA registration requirements

Your clan may accept to register with your state, for one reason or another. Here's a sampling of registration requirements in several states:

Florida--Associations must complete 2 registrations in Florida. "Ane is the registration that has to be done for all corporations," says Dennis J. Eisinger, a partner at Eisinger, Brown, Lewis & Frankel PA in Hollywood, Fla., who represents more than 500 condo associations and HOAs. "They'd register their corporate entity equally a not-for profit every year, and information technology costs about $150.

"In add-on for condos, at that place's a filing fee annually to the state regulatory agency," adds Eisinger. "It's something like $4 per unit, and if you lot don't fill out the paperwork, it's not a major penalty."

Michigan--"Nonprofit associations need to exist registered with the Michigan Department of Labor and Economic Growth," explains Nathaniel Abbate Jr., a partner at Makower Abbate & Associates PLLC in Farmington Hills, Mich., who represents associations. "We often will do it. An association will requite us the information, and it's pretty pro forma. There are some basic forms and generic recitations, along with some basic reporting requirements, like filing an almanac report and filing your taxes if you're taxed on the common elements. It's non too onerous."

Minnesota--Similar other nonprofit corporations, HOAs must register with the Minnesota secretary of state's office. "It's a simple filing, and the cost is less than $100," explains Matthew A. Drewes, a partner at Thomsen & Nybeck PA in Edina, Minn., who represents associations. "Information technology'southward possible for a community association to lose its good continuing with the secretary of state's office, become administratively inactive, and exist dissolved if it doesn't go along up its corporation registration. So there's really no reason not to practise it and every reason to do information technology. But even if your association has allowed your registration to lapse for a year or ii, it's possible to reinstate your corporate practiced continuing retroactively for the past several years."

What Happens If Your HOA Doesn't Register?

If you fail to register your HOA as required, what tin happen? Technically, you tin lose your ability to file and defend lawsuits, but that only virtually never happens.

"In Florida, if you let your corporation's registration lapse, y'all're not entitled to defend or initiate any lawsuits," explains Eisinger. "Simply you can reinstate your registration easily if you pay the back fees. It happens all the time that you go on the lapsed listing for various reasons--because of a lack of continuity in board members or direction--and we take to remind associations their registration has lapsed. Only the fix is easy."

Minnesota associations aren't really at risk, either. "Minnesota doesn't have a requirement that you lot take to maintain sure registrations to preserve your enforcement remedies," says Drewes. "Merely I suppose an statement could be made."

That's also truthful in Michigan. "If your clan is sued, depending on what court you're in, I could see somebody making some hay out of your lack of attention to the corporate form," says Abbate. "But it never has been fatal to an association's instance. Information technology's easily remedied with just a late or a corrective filing."

What's more important, withal, is maintaining corporate formalities to protect lath members. "Someone could make the argument that your association isn't a valid corporation, so information technology can't enforce any provisions in its governing documents," says Drewes. "Merely it'due south also of import for boards to maintain the expert standing of their corporation considering if they don't take an active corporation that's conducting the association's business, there's the possibility of the statement for personal liability of owners or board members.

"Ordinarily there would be an indemnification provision in the governing documents saying the corporation volition indemnify a board fellow member who incurs liability or is sued as a result of his deportment on the clan's behalf," Drewes explains. "But it could be argued the association isn't subject to that protection if there's no corporation to provide the indemnity. While the association should be maintaining directors and officers insurance, in that location's even the possibility the insurance company isn't spring to comprehend the individuals if at that place'south no corporate insured.

"I'chiliad non suggesting it'due south a great statement," says Drewes. "But information technology's within in the realm of possibility, at least in terms of the argument being made."

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