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Subject: Incorporate or not?
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Author Messages
JillH9
(Michigan)

Posts:6


09/05/2017 3:32 PM  
We are a small association, the checking account balance averages $5000 when everyone pays their dues. We do have a hot head that is continually threatening to sue and we have a pond in one of the commons areas. We have three commons areas that are actually owned by residents with a association easements on them. There are no buildings, just a association sign, flowerbeds, private road and pond maintenance. The reason we would incorporate is liability, for example if someone drowns in the pond or if the threats to sue ever materialize. We have residents questioning the necessity of incorporation.

Opinions?
RogerB
(Colorado)

Posts:5047


09/05/2017 4:39 PM  
Your association and Board members protection should include: Incorporation which provides protection; D&O liability insurance; and always acting in good faith.
TimB4
(Virginia)

Posts:14854


09/05/2017 5:57 PM  
Posted By JillH9 on 09/05/2017 3:32 PM

The reason we would incorporate is liability




Yes, you should incorporate.
That is the reason to do it.
Incorporation protects the membership.

see:

Differences Between Incorporated & Unincorporated HOAs

INCORPORATION of HOA, IS IT GOOD, BAD, OR SHOULD YOU BE INDIFFERENT?

What You Need to Know About Unincorporated Nonprofit Associations



Posted By JillH9 on 09/05/2017 3:32 PM

We are a small association, the checking account balance averages $5000 when everyone pays their dues.




Is that monthly or annual?


Posted By JillH9 on 09/05/2017 3:32 PM

We do have a hot head that is continually threatening to sue




not relevant


Posted By JillH9 on 09/05/2017 3:32 PM

we have a pond in one of the commons areas




I expect you mean a storm water retention pond.

These will need to be dredged at some point in time in the future.
It won't be an option, it will be mandated by the EPA or the State equivalent of the EPA.


Posted By JillH9 on 09/05/2017 3:32 PM

private road and pond maintenance.




Private roads are expensive.
Milling and Paving in our area is around $15 a square yard.
Our Reserve Study is based on $16 per square yard.
JillH9
(Michigan)

Posts:6


09/06/2017 9:55 AM  
$5000 is annually after dues are paid, The pond is spring fed.
DaveD3
(Michigan)

Posts:770


09/07/2017 3:53 AM  
There's no good reason to NOT incorporate.
PitA


Posts:0


09/07/2017 3:17 PM  
assume: a successful lawsuit against the HOA for 5,000,000 dollars

uninorporated: members may lose their homes as well as HOA 'common elements'

incorporated: only the corporate assets will be lost (members keep their homes) - with an 'easement of necessity' to use the roads directly to and from their homes (if roads are private)


the above 'represents' the principle of 'corporate shield'



if y'all don't understand the concept, please, DO NOT BREED
JillH9
(Michigan)

Posts:6


09/07/2017 4:56 PM  
Exactly my point pitA, we have a few trouble makers, naysayers, pains in the you know what, whatever you would like to call them in our association.
PitA


Posts:0


09/07/2017 7:19 PM  
..... pains in the you know what, .....


You do understand what my 'moniker' (PitA) represents ?!
TimB4
(Virginia)

Posts:14854


09/07/2017 10:58 PM  
Posted By PitA on 09/07/2017 7:19 PM
..... pains in the you know what, .....


You do understand what my 'moniker' (PitA) represents ?!





That you like flat hollow unleavened bread that can be split open to hold a filling.

Although, to be honest, you can really become a pain in the petute when you get going on the subject.
PitA


Posts:0


09/08/2017 5:28 AM  
.....the sound of silence.....

made by the carpenters

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