All corporations, including homeowners associations, are required to file a registered agent name with their Secretary of State. Registered agents receive all legal notices sent to a corporation, so it is important to know who your HOA agent is and choose the right one for your homeowners association. But, how exactly do you choose your HOA registered agent? Find out here.
How to Choose Your HOA Registered Agent
While most people do not know about them, registered agents are an integral part of every homeowners association. They perform their work silently and behind the scenes, which is why they remain significantly unknown to the community at large. Because their role within the HOA is undeniably essential, it is important to know how to choose your HOA registered agent. But first, let us define what a registered agent is.
What Is a Registered Agent?
To put it simply, a registered agent is the homeowners association’s representative. So, what does a registered agent do?
By law, they receive all legal documents relating to the association. However, the responsibilities of a registered agent go beyond merely being a recipient of a letter or notice. An agent must be responsible and fully understand the significance of their role as a middleman.
Note that all legal notifications, lawsuits, and IRS notices are sent to the agent. Then, the agent should pass the documents along to the business owners, corporation leaders, or HOA management.
If the registered agent fails to give the files to the right people, it can cause serious legal issues for the corporation. For example, a notice of a lawsuit filed against a corporation may be sent to an out-of-date agent. If the agent ignores the notice, the legal proceedings will continue with the corporation not knowing anything about the lawsuit.
Do not be confused, though. You may come across the term “statutory agent” along the way. So, what is a statutory agent? It is just another term for “registered agent.”
How to Find Your HOA Registered Agent
Surprisingly, many corporations do not know who their registered agent is. If you are not sure who your agent is, you can usually find them online via your Secretary of State’s corporate search page.
For instance, you can look for your organization’s registered agent in NC here. Search for your corporate name, and you should see the name of your registered agent.
You may realize that you do not recognize the name of your agent. Others in your corporation also may not know the agent. This person might be:
- The attorney who set up the corporation
- A former association officer who is no longer involved or affiliated with the association
- The previous owner has moved or passed away
If you do not recognize your registered agent, this could mean that important legal papers have been sent to someone who will not deliver them to your corporation. In this situation, your corporation or HOA management should select a new agent as quickly as possible to prevent such cases from happening again.
How to Select an HOA Registered Agent
Now that you have a good idea of how important the role of a registered agent is, know that selecting the right person for the job is just as important. There are two primary factors to consider:
- They must have a permanent address where they intend to stay for a long time.
- They must be trustworthy and responsible and can quickly deliver all the documents they receive.
So, who can be the North Carolina registered agent for your HOA community? Here are some people to consider when you choose your HOA registered agent:
1. The Association’s Attorney
It feels like a no-brainer to choose your association’s attorney to receive legal documents and notices. After all, all legal concerns will be coursed through the lawyer, so you might as well send the documents directly to him.
Upon receipt of the notice, your lawyer can immediately read the documents and advise you on the best course of action.
On the other hand, you should also consider that these documents are handed to the secretary or receptionist of the law firm or office, not the lawyer directly. The recipient of those documents may overlook them and not give them to your lawyer immediately, which will then cause more delay.
This is one of the reasons why lawyers do not want to be registered agents, as it can create unnecessary conflict between them and their clientele. However, if your association’s lawyer is up for the task, there is no reason not to pick them as your registered agent. Keep in mind, though, that your lawyer may charge an extra fee for assuming the role of a registered agent.
2. The HOA Manager
Another easy option is to let your HOA manager be the agent. HOA managers are actively engaged in the association, so they might be willing to receive documents that will inform them of the association’s legal issues.
On the other hand, HOA managers can have a lot on their plate already, so they might not accept the role. If they do take the job, do not forget to change the registered agent on file in case you switch HOA managers down the road.
3. Third-Party Service
If you think that your lawyer or HOA manager does not pass the criteria of an agent, you may opt for a third-party service instead. Such companies charge a fixed amount per year to receive your legal papers and send them to you promptly.
This can be a bit risky, though, as people with whom you are not well-acquainted are receiving very important documents. But, there are a number of reputable and credible companies out there that offer quality registered agent services.
Can a Board Member Be the HOA Registered Agent?
In general, a board member can act as the HOA registered agent. Having a board member as a resident agent can seem like a good idea at first. They are easy to reach and usually capable of their job. But, there are pitfalls to this decision.
For one, board members change every so often. What happens when the board member goes back to being a regular resident?
Your HOA will need to change the registered agent to keep up, which can be troublesome and downright unnecessary. Additionally, if said board member becomes difficult or begins challenging the association in any way, it could complicate things even more.
There is also the risk of them moving away or becoming incompetent at their job. Considering all these reasons, it is generally not recommended to designate a board member as your HOA registered agent.
Choose Your Registered Agent Wisely
As just about anyone can see, the role of a registered agent is crucial in a homeowners association. Without them, HOAs can become buried in legal issues and have no way of knowing about it until it is too late. This is why you must choose your HOA registered agent carefully.
If you do not know who your registered agent is right now, do the check and see if this person is still connected to your association. If not, it is time to start selecting a new one to make sure you do not miss any important legal documents.
Most associations turn to HOA management companies for help with registered agents. If you wish to do the same, shoot us an email or give us a call anytime.
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