By: Clint G. Goodman, Esq.
QUESTION: I just received a letter from the Arizona Corporation Commission saying they dissolved our HOA because we didn’t file our annual report last year. What do I do? Help!!!!
ANSWER: Getting a letter from any government agency is scary enough, let alone one that says that your HOA was dissolved. While the notice is serious and cannot be taken lightly, the fix may be simple. But you need to act now to correct the problem.
The Arizona Corporation Commission (ACC) website has a “business entity search” link for all non-profit corporations organized in this state. Once you find the name of your association, you should be able to simply pay a late fee and file the delinquent annual report. In most cases this can all be done online. Once the delinquent reports are filed the ACC should reinstate the corporation. Crises averted. As you can imagine, sometimes the solution is not that easy. There can be hang-ups, so you may need to contact a qualified attorney to help walk you through the process.
From a legal standpoint, some sister states have laws saying that an HOA cannot collect assessments from its delinquent members if its corporation is dissolved. Other states reject that notion. Unfortunately, our laws don’t address this issue yet. Based on some of our other laws, I would like to think the courts would be more inclined to rule that associations can still collect assessments even if they are dissolved. However, there is no guarantee the court would rule in a dissolved HOA’s favor. My advice is to resolve the problem—now.