Legal Question in Real Estate Law in California

Our HOA had its' Incorporation Status suspended by the Sec of State because the property manager didn't file the annual forms. We do carry a $3M liability policy for the HOA.

Q: Are the individual homeowners liable as individuals if there were an accident and lost a lawsuit for $5M against the HOA?


Asked on 10/18/11, 2:44 pm

2 Answers from Attorneys

Anthony Roach Law Office of Anthony A. Roach

The suspension means the HOA cannot maintain a suit or defend itself. In any lawsuit, its appearance would be subject to a plea in abatement, which would be restorted by complying with the paperwork requirements and any fees from the Secretary of State. It does not, however, create liability on the part of the individual homeowners, although the homeowners would be assessed any loss the HOA suffered.

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Answered on 10/18/11, 5:37 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

The suspension of the HOA probably doesn't affect the insurance coverage - one would have to review the policy, or ask the insurer or the agent to be sure - but that seems unlikely.

Nevertheless, the HOA managers should take immediate action to cure the suspension by applying for a certificate of revivor or whatever else is necessary. Also, the homeowners should take a more pro-active role in electing HOA directors and supervising them. This can be avoided if the board or its executive opens the doggone mail and reads it.

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Answered on 10/18/11, 8:59 pm


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