QUESTION: Our board received a notice from the Arizona Corporation Commission that says our community association was dissolved because they did not receive our annual report filing. Is there something we can do? We need help!
ANSWER: Getting any letter from the government can be scary, especially one that informs you that your HOA has been administratively dissolved. Fortunately, although the situation is serious, it may be simple to fix, as long as immediate action is taken.
The Arizona Corporation Commission’s website (www.azcc.gov) has a “search” field where you can enter the name of your Arizona HOA. After you have found your association’s records, in most cases, the board can pay a simple fee and file the delinquent annual report online. After processing the delinquent report, the Corporation Commission should reinstate the corporation, thus resolving the crisis. Occasionally, the solution is not as easy, so you may need to contact a qualified homeowners’ association attorney to help you complete the process.
One important legal issue of which to be aware: some nearby states have statutes prohibiting HOAs from collecting assessments from delinquent members if the corporation is dissolved. Other states outright reject that philosophy. At this time, Arizona laws don’t address this issue one way or the other. Based on some of our other laws, it is my opinion that the courts would be more likely to find that administratively dissolved associations could continue to collect assessments. However, there is no guarantee the court would rule in favor of a dissolved homeowners association. My advice is to address the problem—right away.
For more information or to speak with an experienced HOA attorney, contact Goodman Holgrem Law group today.