Social Committee/Budget?

We don't do social events at the Association level. The closest we get is coordinating with the local fire department for Santa to come through the development.

Part of this is the lack of space to hold an event. We do encourage members to hold their own events. I've hosted block parties with minimal expense (pot luck basically).

Any assessments must benefit the entire community. After an initial stake (loan) by the Association - since paid back - the clubhouse committee has accumulated and managed it's own funds. They can basically do what they want for functions, charge for attending functions and raise funds in any way they wish (such as tag sales). The committee accounts are banked by the committee and not comingled with the Association accounts in any way.

The cost of operating and maintaining the building is supported by the Association.

Jim

I am against HOA's using money for social events. I would not even bring refreshments to a meeting unless I paid for it out of my own pocket. It is NOT that I am against having social events. Matter of fact, I held many event throughout the year including a huge Halloween party. However, we never used HOA funds to finance any of it. The extent of the HOA's involvement was to open the clubhouse to use for the events. Normally there is a $25 rental fee and in good standing requirement to use the clubhouse. However, if it was HOA event, that would not be charged as the clubhouse is HOA common property.

A HOA is ONLY funded by it's members, for it's members. It is to be run as the members see fit. The money collected is to go towards the operational costs of the HOA and not exceed that. (Hence non profit status). Social events are money drains and not necessary for operations. However, if the membership is okay with their money being spent on "coffee/parties" then go for it. It's just my opinion I'd rather have new flower planted in the front entrance than a get together in the clubhouse using my money.

One needs to be careful as well raising money for social events. Too many times I have seen HOA's have yard/bake sales to raise money. This is NOT acceptable in a non-profit. That money is subjected to being taxed. Money is to be raised ONLY by dues or special assessments. Understand the effect of doing such fund raisers and how to fund/budget your HOA properly.

My solution was always to have "block parties" and the neighbors/members bring a potluck. It keeps the HOA money out of being involved but keeps things social.

For the record, our social event budget is $0. That doesn't stop anyone from planning and having social events. It just doesn't come out of HOA dues.

If your electric company or cable company added a line to your bill for $5 month to fund a cookout that you could come to if you wanted to, you would be pretty upset. It's the same thing.

It's likely outlined in your CC&Rs what your assessments may be used for. Typically, they are very specific and do not include social activates (but some do). Our board in the past has, in my opinion incorrectly, interpreted one phrase to allow them to spend money on parties. That phrase is emphasized below. However, I interpret that phrase as maintaining the playgrounds. We have not asked for a legal opinion but also have not had an association party for years.

Our CC&Rs specify:

Purpose of Assessments: The assessments levied by the Association shall be used exclusively for the purpose of promoting the recreation, health, safety and welfare of the residents in the properties (including administrative and overhead expense) and in particular for the improvement and maintenance of the Common Areas, services and facilities devoted to this purpose and related to the use and enjoyment of the said Common Area and of the homes situated upon the properties and more particular the Association shall be responsible to carry out the following named functions in and about said Subdivision

(a) To provide for the orderly collection and disposal of trash and garbage in and about said Subdivision.

(b) To maintain, care for and preserve the Common areas in the subdivision including areas located between or adjoining the fences and alleys in said Subdivision and all sidewalks in said Subdivision including but not limited to maintenance of the lawns, pruning of trees and shrubs, hedges or other bushes, raking and disposal of leaves or dead vegetation and any and all acts necessary to maintain an attractive appearance in and about the said townhouse subdivision.

(c) To provide for the care, maintenance and preservation of all streets and common walks in said Subdivision.

(d) To maintain throughout said Subdivision at various places chosen by the Association lighting if selected by it, which lights shall be operated, if practicable, on one meter the cost of said lighting to be borne by the Association.

(e) To maintain and preserve the identification signs and to pay all costs and expenses in connection therewith, or, if the Association deems it advisable, to construct such other identification signs as it desires and pay all costs and expenses in connection therewith.

(f) To pay the real estate taxes and the premiums for liability insurance, if necessary or desirable.

Who says? Is that your opinion, or, is it fact?

It may not be "illegal" in the sense that there is likely no law expressly forbidding funding such activities with association funds, but there other caveats that may make funding such activities unwise.

Thanks for all the perspectives. There's passion on this topic in the community and on the board, I think on both sides of the issue. We'll see where it goes...

Great! How did the $8K compare to your total expenditures?
Don't count on your homeowners being savvy about taxes, insurance, liability, etc.

I think if your documents allow for it, it doesn't go against state statutes, it doesn't have any negative consequences like taxes/IRS, 100% of your homeowners support it, AND nothing else is being neglected or suffering (ie we had a party but the roof on our clubhouse needs new shingles and we can't afford to do it), THEN maybe it is acceptable.

My observation is that 1) unless you have a highly committed group who is willing to consistently "volunteer", these things tend to fizzle out and 2) people tend to have different desires and visions so it is important that everyone is on the same page and 3) it is absolutely crucial that there are guidelines to follow so nothing is being arranged that may end up causing liability. I think the OP could end up with a great committee if they take care in how they establish it.