Hosting Commerical Events

Our community is having heated discussions on the issue of hosted by residents events like jewelry parties, essential oils, Cpi classes, yoga lessons. The concern is if we host these events at the community club house we will jeopardize our non-Profit status.

I'd like to hear your opinions and how you've handled these issues.

Donna-Jean the HOA is not hosting, the homeowners that rent the clubhouse are, so it doesn't affect your non-profit status. It only becomes dicey if the HOA started renting the clubhouse out to non-members. We had a H/O that worked a a local Kroger store who rented out the clubhouse for a store meeting, all perfectly kosher. The next year, she had moved and when the store manager asked to rent the CH out for the same thing, we had to tell him no. Now presumably the store reimbursed her for the rental fee but that didn't affect us where a direct rental from Kroger would have.

I agree with others that renting it out does not affect your non profit status.

I also agree it does not affect your taxes as the fees the HOA charges are used to offset any cleaning. A refundable deposit is used to offset the cost of any damage. The HOA makes no profit from the fees.

But all of the above applies only is it's residents who rent the clubhouse. If you advertise it for rent to "outsiders," and earn income from their rentals, everything changes.

The biggest problem I see with these activities is that they can create a conflict. Owner A want to reserve the clubhouse for a profit making venture. Owner B wants to reserve the clubhouse during the same period for a private party. Even if it is a first-come, first served situation, owner B might feel that they have a bigger right to reserve the clubhouse at that time as all owners' assessments pay for the clubhouse and the clubhouse exists for the enjoyment of the owners. The primary function of any clubhouse is not so that others can use it for their own personal financial gain.

I also tend to veer toward the opinion that any clubhouse or amenity should not be rented to non-owners. Again, to do so creates a potential conflict. If owner A wanted to rent the clubhouse for a private party but the Association had already rented out the clubhouse to a non-owner, then what are the rights of the owners to use the amenities that they pay for and have responsibility for? To that end, there are other venues that non-owners can rent such as hotel conference rooms, community center rooms, and recreational areas that are maintained by private businesses, cities, and counties. Amenities that are owned and operated by a HOA are meant to be used by owners and not the general public.