HOA, LLC, Back taxes, My, Oh, My!

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L.S. from Hartford County writes:

Dear Mister Condo,

Hello, Mr. Condo, Our condo HOA has just received notice that the original developer never dissolved the LLC that was set up in order to sell the individual units approx 7 years ago. The document suggests that the HOA is responsible for the $250/year tax to have the LLC that the developer has not paid (perhaps he wasn’t aware of the need to dissolve the LLC?) Since he sold the last unit over 7 years ago (total amount over 7 years = $1750). Does this sound possible?  The president of the HOA was one of the first owners and members of the board and said that the HOA was never given anything but the condo docs.  How does the HOA dissolve the LLC? And is the HOA responsible for the tax on the LLC?

Mister Condo replies:

L.S., I am sure that was a disappointing notice to get in the mail. My gut instinct was that the HOA has no ability to dissolve the LLC and that is not responsible for this tax but I reached out to an attorney friend for some better guidance. Here’s what he had to say:

“Every LLC in Connecticut is obligated to pay the state an annual flat tax of $250.  Assuming that’s the bill you’re looking at, the condominium is not responsible for it.   A condo association is a separate legal entity from the developer’s LLC and does not inherit its debts.  Neither does the association have any obligation, or even the ability, to dissolve the LLC.  Instead, it’s simply joined the countless abandoned business entities which no longer exist except on paper.  Your board should explain the details to the association’s lawyer just to be certain, but based on what you’ve described here, the association can safely ignore the LLC’s problems.”

Sounds like you’re in the clear on this issue. All the best!

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