Understanding the Ramifications of a Homeowners Association’s “Loss of Corporate Status”

Most homeowners associations are corporations that are organized under the laws of the state in which the association is located.  A corporation is a distinct legal entity that the state laws allow for which includes shareholders (or members in the case of a homeowners association) who are the owners of the entity, a board of directors that manages the entity, and officers that are elected annually by the directors. Other types of legal entities that are not suitable for the operation of a homeowners association include limited liability companies, partnerships, limited partnerships and joint ventures.