- Unincorporated Non-profit Associations Statement of Principles 2007
- B. Scope.
- D. Ownership of Property; Claims by and Against the UNA.
- E. Contract and Tort Liability.
- F. Internal Governance, Fiduciary Duties and Agency Authority.
- G. Dissolution, Merger or Conversion.
- SECTIONS FROM THE CALIFORNIA CORPORATION CODE:
- All Pages
D. Ownership of Property; Claims by and Against the UNA.
Principle #12. A UNA in its own name may acquire, hold, encumber and transfer property, may execute contracts in its own name, and may be a beneficiary of a trust, a legatee, or a devisee under a will.
1. This principle applies to all types of and interests in property, real, personal and intangible.
2. This principle is consistent with the separate legal entity status of a UNA, but in many jurisdictions it is currently not possible for an unincorporated organization to hold or dispose of property in its own name without specific statutory authority. In these jurisdictions, the general rule is that a conveyance to a UNA in the organization’s name is in effect a conveyance to all of the members or managers as tenants-in-common. To avoid this result title to property is usually taken or is deemed to be held in the name of one or more individuals as trustees for the present and future members of the organization. If the current title status of UNA property is a significant problem in the enacting jurisdiction, consideration should be given to adoption of a provision similar to Section 19 of the Uniform Unincorporated Nonprofit Association Act (UUNAA) that vests title that was previously attempted to be conveyed to the UNA in the name of the UNA as of the effective date of this Act.
3. Establishing the authority of an individual to sign deeds and other documents conveying interests in real property owned by a UNA in a manner satisfactory to title insurers and attorneys representing buyers or mortgagees has been problematic in many jurisdictions. An enacting jurisdiction where this has been a problem may want to include in the Act a provision similar to Section 5 of UUNAA in the Appendix.
4. Principle #12 lists only those powers where case law has raised questions because of the common law aggregate theory of UNAs. There may be other specific powers that an enacting jurisdiction might want to include in the Act (the enacting jurisdiction’s Nonprofit Corporation Act general powers provision might be used as a model) or the enacting jurisdiction
might want to have a broad general powers statement followed by the list of powers in Principle #12, e.g., “A UNA in its own name has the same powers as an individual to do all things necessary or convenient to carry out is affairs including, without limitation, power to acquire....”
Principle #13. A UNA, in its own name, may institute, defend, intervene, or participate in a judicial, administrative, or other governmental proceeding or in any arbitration, mediation or other form of alternative dispute resolution.
Principle #14. A claim for relief by or against a UNA does not abate merely because of a change in its members or managers.
Principle #15. The Act does not affect an action or proceeding commenced or right accrued before its effective date.
There are two concepts embedded in this Principle: (1) the Act will not adversely affect a cause of action that existed before its enactment; and (2) if the enacting jurisdiction’s civil procedure rules require a substitution in the names of parties to a proceeding pending at the time of the effective date of the Act because of the Act’s entity theory, the substitution does not have an adverse affect on the rights of the parties to the proceeding.
Principle #16. A judgment or order in an action or proceeding against a UNA is effective only against the UNA and not against any of its members or managers unless the members and managers have been properly named, and served, as parties to the action on proceeding and the judgment or order is issued against them individually based upon a finding of their individual liability as well as against the UNA.
Principle #17. Provisions for service of pleadings, venue in actions against a UNA and enforcement of judgments or orders against a UNA should be included in the Act, unless they exist in the enacting jurisdiction’s other statutes and regulations.
1. The Appendix contains examples of some of the types of provisions in Principle #17 that have been incorporated in UUNAA Sections 10-12.
2. Principles #13-17 set forth the basic framework for claims by and against a UNA. They supplement the enacting jurisdiction’s other civil action statutes and regulations. See Principle #9.