COMMUNITY MANAGEMENT EDITION
Is your condominium or homeowners association a Maryland corporation? If so, you receive certain protections from individual liability provided you remain in “Good Standing.”
A Domestic Corporation files its Articles of Organization with the Secretary of the State of Maryland. This creates the corporate entity. From there, the objective is to remain in “Good Standing” in order to continue to receive the protection of “the corporate veil.”
For legal purposes, a corporation is treated as a person. If you were to sue a person, you would serve papers on the person. For a corporation, there must be a real person identified who can accept service on behalf of the corporation. That person is designated as the Registered Agent and must live or work within Maryland and be available during normal business hours to receive papers. These documents include but are not limited to anything sent by the State of Maryland or any lawsuit information that is filed against that corporation. A corporation should think seriously about who they assign as their resident agent. They must fully trust this person to notify you immediately upon receipt of any such documents. Often, communities change lawyers or managers and never recognize that the lawyer or manager served as registered agent and represented the official mailing address. Talk about trust… do you trust your former manager or former attorney?
Annually, each corporation must file a Personal Property Return. Businesses that are “for profit” must list assets on which they will pay Personal Property Tax and pay a filing fee. Not for Profit entities file the form, but do not list assets and pay no fee. The form is due on April 15 of each year and must list the names and addresses of the directors and officers.
In order to see if your Corporation is in Good Standing with the State of Maryland, go to www.dat.state.md.us. Here you will find the official address of your corporation, the name and address of your registered agent and the last year for which your personal property tax returns were filed. Try it—you’d be surprised how many corporations fail to keep-up on these requirements and show “Forfeit” on the status of their corporations. For a community association, this may mean that anyone injured on the property can individually sue each and every homeowner!
Most reputable management companies check this information periodically and arrange to file the personal property return or change the registered agent or mailing address. If your status is forfeit, you must file Articles of Revival to restore the corporation to good standing. All of the necessary forms can be found on the DAT website.
Kim Hirsig, PCAM