Condo Developer Transition Complete; Or Is It?

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R.D. from outside of Connecticut writes:

Dear Mister Condo,

Hi! I purchased a building and developed 3 condo apartments and sold them between 2006 and 2008. I was the original member of the condo association as we were selling them. Then the 3 owners took over the association and never filed the 1120H from 2009 -2014 as I had originally done in 2008. Now I haven’t participated in the association because the owners wanted to take over the association on their own. Two questions. 1) Am I still responsible for these unfiled tax returns 2) how can I get my name off everything to do with the association. Thanks!

Mister Condo replies:

Hi, R.D.! Developer transition issues such as this are best handled by a qualified attorney. There are many attorneys that specialize in condominium development and transition. The unit owners don’t govern the association because they wanted to do so “on their own”, They manage the association as a matter of law once the conditions for doing so were met by you and by them. At the time those conditions were met the association became a self-governing entity and you were no longer the controller of the association. Regardless of who controlled the association, the tax forms should have been filed. What you will likely need is a legal opinion on who actually governed the association from 2009 – 2014 to make a determination of responsibility. My guess is that the newly formed association, governed by the unit owners, simply didn’t file the forms and must now face the consequences for not having done so. It is certainly possible that the developer transition never happened or wasn’t recorded properly, in which case you may be on the hook. Finally, if the developer transition has not yet been completed properly, kindly speak with a qualified attorney to get it done. Being on the hook for the tax filings may be the least of your problems if that paperwork wasn’t handled correctly. All the best!

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