Home associations can either be incorporated or unincorporated. If they are incorporated, their corporate status can be suspended by the state of California if they fail to perform certain acts. They do not cease to be associations but, instead, are severely penalized by the state. Incorporated homeowner associations and other corporations can have their corporate status suspended for any of the following reasons:
- Failure to file their tax returns,
- Failure to pay their taxes,
- Failure to file a Statement of Information (Form SI-100) with the Secretary of State, or
- Failure to file a Statement By Common Interest Development Association, (Form SI-CID) with the Secretary of State.
Homeowner associations can check on their corporate status by typing in their official name in the Secretary of State's website. To determine the reason why an association has been suspended, contact the Secretary of State's office and the Franchise Tax Board:
Secretary of State
1500 11th Street
Sacramento, CA 95814
Franchise Tax Board
PO Box 942840
Sacramento, CA 94240
Suspension of an association's corporate status is very serious. The association:
- Can lose its corporate name if someone reserves their name during the suspension period,
- Cannot file lawsuits or defend itself against lawsuits,
- Cannot enforce contracts, and
- Lose its right to obtain an extension to file tax returns.
If a homeowner association's corporate status has been suspended for tax reasons, it can be revived by filing the applicable tax returns and paying any delinquent tax balances, penalties, fees, and interest. If the suspension is based upon the failure to file a Statement of Information or Statement By Common Interest Development Association with the Secretary of State, filing the forms and paying any fees and penalties will revive the corporation. The state will then issue a "Notice of Revivor" once the matter has been resolved.
If an association fails to revive its corporate status, the Secretary of State can administratively dissolve the corporation if it has been suspended for 48 months or more.
American HOA Management