Community Events - Charging a Vendor Fee

Started by AllumW • 21 replies • 1113 views

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AllumW (Florida)
Posts: 68

Posted:

We are thinking of having community events that allow vendors to set up table to sell their wares. I'm wondering if anyone has ever done this and charged a vendor fee.

I was thinking that the fee could go back to the event budget to fund other events.

SheliaH (Indiana)
Posts: 6,964

Posted:

You could probably do it, but I would discuss it with the association's insurance carrier first, just to see if there are any liability issues you need to be aware of. You should also consider crowd control issues - if it's a community event, I doubt the vendors would only be satisfied with residents attending (they'd likely expect the general public as well.)

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By AllumW on 12/27/2017 10:19 AM
We are thinking of having community events that allow vendors to set up table to sell their wares. I'm wondering if anyone has ever done this and charged a vendor fee.

I was thinking that the fee could go back to the event budget to fund other events.

Why would you charge a fee? HOA's are supposed to be non profit.

AllumW (Florida)
Posts: 68

Posted:

Thanks Shelia.

LetA - The fee would be no different than other fees charged by an HOA. It would be fee of use of space for businesses to sell their items. In this case, added back to the event budget for the HOA.

I found a few HOAs in FL that do charge a vendor fee for booth space. Just wondering if anyone else has any experience with this.

BenA2 (Texas)
Posts: 1,273

Posted:

Quote:

Posted By LetA on 12/27/2017 11:16 AM

Why would you charge a fee? HOA's are supposed to be non profit.

Why would they give away space for a business? Non-profit does not mean you cannot have income.

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By BenA2 on 12/27/2017 12:56 PM

Posted By LetA on 12/27/2017 11:16 AM

Why would you charge a fee? HOA's are supposed to be non profit.

Why would they give away space for a business? Non-profit does not mean you cannot have income.

I agree with Ben, profit and income are two different things. While most HOA income is typically derived from regular assessments, that doesn't preclude getting income from other sources.

Escaped former treasurer and director of a self managed association.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It just means that profit could be taxed.

Former HOA President

BarbaraT1 (Texas)
Posts: 821

Posted:

I think you would need to be able to provide a large crowd for a vendor to be willing to pay for a space. I have seen this type of thing work in communities of 3000+ homes, but they are events that have been held for years and attract most of the neighborhood.

GenoS (Florida)
Posts: 4,276

Posted:

I'd double check to make sure such a thing was authorized in the association's Articles of Incorporation. It may be, but you should verify that.

PaiN
Posts: 73

Posted:

If events are open to non members it MAY make the association a 'place of public accommodation' subject to ALL the requirements of the ADA.

AllumW (Florida)
Posts: 68

Posted:

Thanks everyone. All good information. We're a community of over 800 homes and we're trying to get started with having events. I was throwing the idea out there of way to invite vendors - in the neighborhood or outside - and get community involvement.

We're still developer run and don't plan on charging anyone for the spring event we're planning. I'm just gathering information now.

I did check our documents and there isn't anything in there that would prohibit us doing this.

TimB4 (Tennessee)
Posts: 21,062

Posted:

the biggest concern has been mentioned.

If you are inviting the public, then you need to be in compliance with ADA - basically handicap ramps/parking/entrances.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Your still developer run? That may be an issue. They kind of own the place. So you may want to check with them before proceeding. Especially if you had plans to charge money. That money would NOT have been going to the HOA. It goes to the developer's pocket who still own the HOA. It's a different animal once it becomes owners owned.

Former HOA President

AllumW (Florida)
Posts: 68

Posted:

Thanks Melissa - Like i said, we don't plan on charging anyone for the spring event. I'm just asking now to see if anyone had done something like this to plan for the future.

GreggT (Florida)
Posts: 77

Posted:

Quote:

Posted By MelissaP1 on 12/27/2017 5:21 PM
It just means that profit could be taxed.

It would not be considered profit if used to offset other expenses in the budget.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By GreggT on 01/03/2018 5:32 AM

Posted By MelissaP1 on 12/27/2017 5:21 PM
It just means that profit could be taxed.

It would not be considered profit if used to offset other expenses in the budget.

Doesn't matter. If it came from a source other then assessments, it's taxable income filing 1120-H

PaiN
Posts: 73

Posted:

..... excluding the first $100 (total for year) .....

CjC
Posts: 210

Posted:

We are a large community and have weekly summer concerts. We attract many hundred of our community members and we have vendors. They do rent space. Some are candle and jewelry and many are desserts and food trucks. The events are technically for members and guests only and the funds we receive offset the expense of the band. We also have a very large stage set up and seasonal sponsors. Its it a set up that has worked for at least 4-5 years that I can remember.

PaiN
Posts: 73

Posted:

..... The events are technically for members and guests only .....

PERFECT

AllumW (Florida)
Posts: 68

Posted:

Quote:

Posted By CjC on 01/03/2018 9:35 AM
We are a large community and have weekly summer concerts. We attract many hundred of our community members and we have vendors. They do rent space. Some are candle and jewelry and many are desserts and food trucks. The events are technically for members and guests only and the funds we receive offset the expense of the band. We also have a very large stage set up and seasonal sponsors. Its it a set up that has worked for at least 4-5 years that I can remember.

Thank you CjC - This is awesome info. I think our neighborhood would like to do something like this in the future.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Cj,

How are the funds handled (deposited into operating accounts, given to the band directly, etc.)?

CjC
Posts: 210

Posted:

As far as I know, the funds are deposited to our accounts. It's a line item in our budget as income.

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