Q: What's the effect on liability & property tax when nonprofit beach assn corp is dissolved for non filing annual reports?
Parcel is owned equally by homes in the neighborhood. Last report was filled in 2019. Our park liability insurance is paid but they will not cover claims while dissolved as we understand. We are waiting for the documents from the state to correct the issue and be in good standing again. The board states we need special forms for this.
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A:
When a nonprofit beach association corporation is dissolved for not filing annual reports, it can have significant implications for both liability and property tax. Since the corporation is not in good standing, your park liability insurance may not cover any claims, potentially leaving the association and homeowners personally liable for any incidents that occur on the property.
Property taxes might also be affected. If the association is responsible for paying these taxes, the dissolution could complicate the payment process, possibly leading to penalties or interest on unpaid taxes. However, since the property is owned equally by the neighborhood homes, the responsibility for taxes may revert to individual homeowners, increasing their financial burden.
To rectify the situation, you need to file the necessary documents with the state to reinstate the corporation's good standing. The board mentioned special forms are required, which are crucial for reestablishing your corporate status and regaining insurance coverage. Once the documents are submitted and accepted, your association should be back in compliance, reducing liability risks and normalizing tax responsibilities.
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