GOOD REASONS WHY AN INDIANA COMMUNITY ASSOCIATION’S ATTORNEY SHOULD SERVE AS REGISTERED AGENT
By Tom Murray
We recommend that an attorney should serve as the Registered Agent for an Indiana homeowners association or condominium association. The Registered Agent is listed on the records of the Indiana Secretary of State as the person who is to be served with legal process when an association is sued. For example, if someone sues the association for a personal injury such as a slip and fall on the community’s common areas, the association’s attorney will be the first to know about the suit when he or she receives the summons and complaint. The attorney can then notify the Board and its management company (if any) and begin discussions on how to defend or attempt to settle the suit.
Indiana homeowners associations and condominium associations are frequently named as defendants in mortgage foreclosure suits. A mortgage company that is foreclosing on a homeowner often names the HOA as a defendant because of its lien rights against the homeowner’s property. The association might be sued by a homeowner or a third party for a variety of other reasons, whether in small claims court or superior court.
When a summons and complaint are served on the Registered Agent, that “starts the clock” by which the association must file an answer or response with the court. Failure to do so will normally result in a default judgment being issued by the court against the association. We have seen many occasions where the Registered Agent was someone other than the association’s attorney and a default judgment was issued because no answer was filed with the court.
Another benefit of the association’s attorney acting as a Registered Agent is that he or she will be notified by email when the association must file a Business Entity Report with the Indiana Secretary of State. That report must be filed every two years. Failure to do so can result in the Secretary of State “administratively dissolving” the homeowners association or condominium association as a nonprofit corporation. If that happens, the association becomes an unincorporated association, losing important protections to its Board of Directors and its homeowner members by virtue of corporate protections. Once administratively dissolved, the process to get reinstated can be challenging, time-consuming, and expensive.
When the attorney receives notice that the Business Entity Report will soon need to be filed, he or she can contact one or more members of the Board of Directors to make sure that either they e-file the report with the Secretary of State or they can ask us to help them do so. There have been several times when we have notified the Board of the need to file the Business Entity Report and they had no idea of the importance of its filing. Also, it is a good time to update the records with the Secretary of State to show the current officers of the association and other business information.
