Should The HOA Board File An Annual Report With The State?

HOA boards are typically aware of the fact that there are annual disclosures to be filled and submitted on a yearly basis.  However, are you aware that almost all the states ask HOA’s structured as a non-profit organization to file annual reports with the secretary of state?  Failure to do that usually results in a loss of Good Standing status and that might affect the number of people who visit the homeowners association website.

 

A variety of HOA boards fail to file annual reports due to reasons that range from reorganization of management to continually delaying the process but the repercussions are quite damaging.  The corporate status of the homeowners association can change to delinquent, inactive, lost good standing, or administrative dissolution.

For clarity purposes, dissolution does not mean the HOA is no longer registered or ceases to exist.  It just makes it difficult for the homeowners association to enjoy services in case of tax notices, lawsuits, and other government-related matters.  What action should you take to resolve the status of the HOA if this happens?

 

Luckily, all that needs to be done to restore the Good Standing status is to file an up-to-date annual report and pay any associated late fees.  That way, the association will be able to enjoy services in state-related processes.  The majority of states require the submission of annual reports while some states only want you to submit them every two years.  A small number of states don’t require non-profit organizations to file an annual report.
Customarily, the secretary of the HOA board is the one who submits the annual report but other members need to ensure the details are accurate.  A reminder for the report could even be posted on the homeowners association website so members remember to approve it.  With regard to annual reports, homeowners associations should always know what the state wants and submit it before the due date.