KEEPING YOUR ASSOCIATION ACTIVE

Do you have access to the Internet? How about a telephone? Either way, you have access to some very useful information about your Association from the Florida Department of State, Division of Corporations. The web address is http://www.ccfcorp.dos.state.fl.us/ and the phone number is (850)-488-9000. Once you have the web site on your computer screen, simply type in the name of your Association. Then double click on your name and the computer will display all the information about your Association on file with the Florida Department of State. By calling the telephone number, you can ask questions about your Association to a Division of Corporations employee.

Clayton & McCulloh encourages all Associations to review their status with Florida Department of State periodically, at least once a year. In particular, we recommend you look at two things specifically: your registered agent and whether your Association is active or inactive.

Under Florida law, every corporation, including your Association, must have a registered agent. This person is designated by law as the recipient of service

see Active, pg 2

C&M ADDS 7^th and 8^th

ATTORNEYS TO FIRM

We are very pleased to announce that Doricia Miller Rivas and Patricia ("Trish") A. Ladan have joined Clayton & McCulloh as associates. Both Doricia and Trish will initially be working in Collections Department. They will also be handling covenant enforcement, document interpretation, opinion letters, and litigation.

Doricia has been practicing law since 1994. She has a background in business litigation and was an Assistant County Attorney for the County of Hillsborough. As an attorney with the County, she obtained valuable experience in drafting ordinances and resolutions.

She graduated from the Boston University with her Bachelor of Arts in English, obtained her Master of Arts from University of Massachusetts in English, and then obtained her Juris Doctor degree from Stetson University where she graduated Cum Laude. On the personal side, Doricia's husband, Alain is also an attorney practicing in the area of criminal defense. They have a twenty-three month old daughter, Amanda, who keeps them on their toes.

See Attorneys, pg 3

Volume XVII                                Page Two                     Clayton & McCulloh

REGISTERED AGENT SHOULD BE A BUSINESS!

Active (from pg 1)

of process on behalf of the corporation. If your Association is sued, the plaintiff can serve the complaint on the Association by serving the registered agent.

Therefore, knowing your registered agent's identity is very important. Be sure you can rely on this person to notify your Association timely in the event the registered agent is served with a complaint. The Association generally has twenty (20) days from the date of service on the registered agent to respond to the complaint. Considering the complaint must pass from the registered agent, to the Association, possibly to an insurance carrier, and ultimately to your lawyer, the twenty (20) days can transpire very quickly. The registered agent should waste no time in transmitting a complaint to the Association

Generally, a registered agent should have a business location to receive service during normal working hours. The registered agent should not be a homeowner using a residential address, as generally homeowners are not available during normal business hours at their homes to receive service of process.

Most community association managers will serve as an Association's registered agent. There are some companies that do nothing but act as registered agents for corporations. Associations have several options for selecting their registered agent. The important thing is to know who your registered agent is and to be sure you can rely on that registered agent to give you timely notice of complaints filed against the Association.

The second major issue which an Association should periodically review with the Florida Department of State is whether the official corporate status of your Association is active or inactive. If your Association is active, that's great! Keep it that way! To remain active, your Association must pay the $61.25 annual fee to the Florida Department of State every year and sign and submit the annual report. The annual report provides the Department of State with an annual update of the Association's current officers and directors. It also is a means by which the Association can change its registered agent. The registered agent can be changed at other times of the year as well by using a different form, however, there is a separate fee charged by the state which is $35.00. If your Association is inactive, then in all likelihood it has been administratively dissolved by the state of Florida for failure to file the annual report and pay the annual fee. This inactive status presents a problem for the Association and needs to be corrected promptly.

see Active, pg 3

Volume XVII                           Page Three                              Clayton & McCulloh

IF YOUR ASSOCIATION IS NOT ACTIVE,

YOU CAN'T SUE FOR DELINQUENT ASSESSMENTS

ACTIVE (from pg 2)

There are several consequences that result from the Association being administratively dissolved. First, the directors of the Association can be held personally liable for the acts of the Association as long as the corporation remains dissolved. That liability can disappear upon the Association being reinstated. The reinstatement of the Association is deemed to relate back to the time the Association was dissolved, thereby eliminating any personal liability of the directors. However, having any such exposure for your directors definitely is not desirable. It is sort of like taking all of your clothes off in public with the idea that you can put them back on later. Most people generally would prefer not to be naked even for a short time.

In addition, a dissolved corporation is unable to sue or defend itself in court until it is reinstated. This means that until the Association is reinstated, it cannot carry out its fiduciary obligations to its members to enforce its documents to sue for unpaid assessments or to enforce its covenants.

An even more vexatious problem that can result from an Association's dissolution is the matter of the corporate name. If the Association is administratively dissolved for over a year, another party can come along and take the Association's name as its own . This situation could result in the Association having to amend its documents to change its name throughout the documents in order to be able to enforce them. We are even aware of a homeowner who set up his own corporation in the name of an Association that had been dissolved for over a year, and then tried to preclude the Association from collecting assessments against him. These are problems which the Association does not need and which can easily be prevented by not allowing the Association to be dissolved in the first place.

If your Association is not currently active, it is important for it to be reinstated its active corporate status as soon as possible. Reinstatement is accomplished by filing the appropriate form with the Florida Department of State. The State will charge the Association a $175.00 reinstatement fee together with all of the delinquent back annual fees since the year of dissolution. For example, if your Association was dissolved in 1997, you would have to pay three annual fees of $61.25 each for 1997, 1998, 1999, plus the $175.00, reinstatement fee for a total sum of $358.75. Remember, however, the annual fee has not always been $61.25, so you need to call the Department to verify the reinstatement amount before submitting the form and fee.

Maintaining your Association in good standing is an important housekeeping chore for your Association. It is a simple and inexpensive matter to file the annual report and pay the annual fee on time every year. Failure to do so can result in significant problems for the Association which are best avoided. Now would be a good time to access the web site or call the State to ensure that your Association will not be "dissolved." Check it out! Have you been dissolved?

Volume XVII                            Page Four                       Clayton & McCulloh

ATTORNEYS(from pg 1)

Trish has experience with commercial and residential transactions, preparation of financing and conveyance documentation, land uses, eminent domain matters, and commercial litigation. She graduated from the University of Texas with a Bachelor of Arts in Government and received her Juris Doctor degree from the Quinnipiac College School of Law.

While traveling in London, Trish met her husband, Amir, who is an attorney with the State Attorney's office. Their "home away from home" is the tennis courts as they are ardent tennis players.

ATTENTION ALL MANAGERS!

Need some additional continuing credit hours for your license? Want to get the credit in a small casual classroom environment? We are proud to be first Central Florida law firm to offer continuing education credit programs at our main office in Maitland. This new service is available exclusively to our clients' managers and will be limited in size. Reservations will be required and the classes are limited in size. Managers will be notified via fax of the dates and times of the complimentary programs to be offered. If you are interested in this new service or have any questions, please call our Director of Client Services, Arlene Ring, at any of our offices.

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1065 Maitland Center Commons Blvd.

Maitland, FL 32751

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