Q: I heard that HOAs and condominium associations have to file a document with the State of Michigan by Oct. 1 to remain in good standing. Can you shed some light on this for our community?
A:Yes. Subdivisions and condominium projects are typically operated by an association which collects dues and assessments, makes repairs to general common areas, and enforces restrictions recorded in a declaration or master deed.
This association is typically incorporated as a Michigan Nonprofit Corporation by the filing of Articles of Incorporation with the State of Michigan.
Status as a nonprofit corporation affords the protection of a corporate legal entity over the association. In order to keep the corporation in “good standing” with the State, the association must file an “annual report” with the Corporations Division of the Department of Licensing and Regulatory Affairs every year by Oct. 1.
The annual report requires reporting any change in the resident agent and registered address of the corporation, as well as identifying the directors and officers, and a statement of the purpose of the corporation.
The report is $20 to file, with late penalties applying for filing after the deadline. Failure to file the annual reports will result in the corporation being dissolved by the State of Michigan after two years, and losing the corporate entity protection, which is unfortunately something that we see in our practice too often.
A dissolved corporation can be reinstated by filing the correct paperwork and paying the required fees.
For assistance in filing your annual report or reinstating your dissolved corporation consult experienced legal counsel.