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NpB (Arizona)
Posts: 605
Posted:
The CC&Rs of the HOA I am a member state

"Each Lot of which Declarant is not the Owner shall be subject to an assessment for, and each Owner other than the Declarant agrees to pay a proportionate share of the expenses of the administration and operation of Property, including by way of illustration, but not of limitation, real property taxes and assessments levied against the Common Areas, premiums for insurance for the Common Areas, the cost of maintenance and repair of the Common Areas, those portions of Lots maintained by the Association and the appurtenances thereto, reasonable reserves for contingencies, replacements or other proper purposes, all as determined by the Board."

I interpret this fancy long paragraph to state that assessments can only be used for items associated with the Common Areas and Lots maintained by the Association.

If the HOA held a pizza party in the common area and invited all owners, is this a proper use of HOA assessments? I contend it is not because it does not qualify as a common area expense.
PaulJ6
Posts: 990
Posted:
Anything that counts as "administration and operation of Property", "as determined by the Board" is OK.

The specific things that are listed re: the Common Areas and the Lots and the like are just illustrative, but aren't limits to proper uses.

I'd say that it's fine if the board approves. Operation of the Property could include a lot of things.
SheliaH (Indiana)
Posts: 6,964
Posted:
There are some HOW's who put money in the annual budget for community building activities like block parties or "best decorated holiday house" contest prizes, although I prefer the HOA provide the space, like a clubhouse, and the homeowners can pitch in everything else.

The section you cite does say "by way of illustration but not of limitation, which can be another way of saying "shall include but is not limited to.". That could mean the assessments can be used for other goods and services that will benefit entire community . In this case, it could be argued the pizza party is for community building, and giving people a chance to meet each other in a festive setting can be great for fostering more involvement in volunteering for timeline communities up days that help the community even more.

So...get your annual budget (the itemized one) and look for a line item. If there isn't one, go to your next not meeting and ask them for more information - didn't you do that already? If so, what was the response?

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
Although the people who run the HOA can buy whatever they want, the pizza should be bought with donation money for the pizza cause and not hoa members money. It prevents issues just like this. Homeowners are going to be upset.
BarbaraT1 (Texas)
Posts: 821
Posted:
The operative words here are: "including by way of illustration, but not of limitation,"

The funds are not limited to the examples.

Personally, I think HOA sponsored social events are an important investment in the health of the community but others disagree. In any case, if you want to argue that assessments shouldn't be spent on a pizza party the governing documents, as you have quoted them, don't support that argument.
SheliaH (Indiana)
Posts: 6,964
Posted:
Ick - I hadn't had my coffee yet when I wrote my response (dang tablet!) What I meant to say was - it could be argued the pizza party is for community building and giving people a chance to meet each other in a festive setting can be great for fostering more involvement in volunteering for activities that help the community even more, like a community cleanup day.

The rest of it still stands. I should also add that depending on the number of people involved, springing for 10 or two large pizzas may not break the budget. However, association funds should be spent on common area maintenance and improvements first - as long as that's not being set aside, I don't see anything wrong with this.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
JohnC46 (South Carolina)
Posts: 14,265
Posted:
An association pizza party is a great idea. Should the association pay for it? No.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Some developments are actually sold with the expectation that there will be association sponsored social events, so a blanket "associations should never pay for social activities" is really not true. In the OP's case I think it is within the board's ability to pay for the event, but unless there is an expectation that the association has a role in social events, I would avoid it.

If enough members are against it, they can fix the problem at the next election.

Escaped former treasurer and director of a self managed association.
BarbaraT1 (Texas)
Posts: 821
Posted:
Quote:
Posted By DouglasK1 on 10/11/2019 8:35 AM
Some developments are actually sold with the expectation that there will be association sponsored social events, so a blanket "associations should never pay for social activities" is really not true. In the OP's case I think it is within the board's ability to pay for the event, but unless there is an expectation that the association has a role in social events, I would avoid it.

If enough members are against it, they can fix the problem at the next election.

Yep. In my market they call it "Lifestyle" and there are master planned communities that have a separate Lifestyle Director to plan the events. At the property I currently manage, we spend about 1% of the annual budget on social events, which are popular and well attended. I am also able to defray costs a bit by having local businesses sponsor things here and there.

HOAs have a terrible reputation (frequently well earned). I firmly believe that social events, holiday decorations, yard of the month, clubs, etc make a huge difference in the tone and tenor of a community. You can fine and sue people into following the rules, or you can foster a sense of community such that people want to do the right thing out of respect for their neighbors and the neighborhood they belong to. That's my soapbox speech anyway.
SueW6 (Michigan)
Posts: 814
Posted:
I agree with Barbara.

Out mission statement includes “promoting of social interaction in the community”.

The cost of the pizza is minor for the amount of goodwill that event will bring.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
The HOA money is NOT your money... It is EVERY MEMBER's money. So how do you feel if the HOA was spending your dues on parties? Not that party's are wrong or not beneficial. They very much are a great way to gather the community. It's just the HOA funds are NOT set up to be spent on these type of expenses. Is this an operating expense? No.

Our HOA would never spend money on parties, provide coffee, or snacks at meetings. Now did we have these things? Yes. IF the people who WANTED to participate donated money or supplies. We may have the event at the clubhouse/common areas. The HOA funds were not used to pay for it. Pot-lucks are a good way to get people together but not spend HOA monies.

Former HOA President
KerryL1 (California)
Posts: 14,550
Posted:
I agree that the CC&Rs' wording leave room to spend HOA $$ on parties.

The board should add a line item to its operations budget and fund it for the next year if they'd like to offer regular events.

I also agree it's a fine way to get resident connected to the community. Such "connections" encourage residents to be good neighbors and ade by the rules, etc. It's also a way to find new people for board service or on committees.

In our downtown neighborhood full of high rise condo buildings, all HOAs have an annual social events budget and social committees.
BarbaraT1 (Texas)
Posts: 821
Posted:
Quote:
Posted By MelissaP1 on 10/11/2019 2:46 PM
The HOA money is NOT your money... It is EVERY MEMBER's money. So how do you feel if the HOA was spending your dues on parties? Not that party's are wrong or not beneficial. They very much are a great way to gather the community. It's just the HOA funds are NOT set up to be spent on these type of expenses. Is this an operating expense? No.

Our HOA would never spend money on parties, provide coffee, or snacks at meetings. Now did we have these things? Yes. IF the people who WANTED to participate donated money or supplies. We may have the event at the clubhouse/common areas. The HOA funds were not used to pay for it. Pot-lucks are a good way to get people together but not spend HOA monies.

I would be fine with it. It ends up being less than $3 per lot, per year.

Every HOA is different, every set of documents is different. The way it was in your HOA is NOT the way it is in all of them. If you disagree with a social budget fine, but no need to act like yours is the way it must be done everywhere.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I am not acting like my way is the right way for everyone. Simply stating what we did and my opinion don't think should be used. Having organized a many "social event" for my HOA I learned NOT everyone wants their dues money to go to a "social" project. Often met with "I don't go to those things so why should my money go?". What do I say? They are not wrong. I have to factor in when a majority of people state that and also do not attend. Am I being a good steward of the HOA money? No IMO. However, in OTHER HOA's the answer maybe "Yes, I'd love to go. Can I bring my kids?" I would then let the membership know that their dues money is involved and set aside a "social" budget. It would have to be agreed upon by enough majority to justify that expense.

It's not a wrong or right thing. It's a majority of benefit. Is it a benefit for multiple members, just board members, or the entire neighborhood (to include renters)? My HOA the answer was no. Other HOA's the answer is yes.

Former HOA President
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By MelissaP1 on 10/12/2019 7:34 AM
I am not acting like my way is the right way for everyone. Simply stating what we did and my opinion don't think should be used. Having organized a many "social event" for my HOA I learned NOT everyone wants their dues money to go to a "social" project. Often met with "I don't go to those things so why should my money go?". What do I say? They are not wrong. I have to factor in when a majority of people state that and also do not attend. Am I being a good steward of the HOA money? No IMO. However, in OTHER HOA's the answer maybe "Yes, I'd love to go. Can I bring my kids?" I would then let the membership know that their dues money is involved and set aside a "social" budget. It would have to be agreed upon by enough majority to justify that expense.

It's not a wrong or right thing. It's a majority of benefit. Is it a benefit for multiple members, just board members, or the entire neighborhood (to include renters)? My HOA the answer was no. Other HOA's the answer is yes.

It's no different than the pool, or the tennis court, or the tot lot, etc. Some people who don't use it don't want to spend money on it. And just because they're the ones who make the most noise doesn't mean that their voices are more important than those who don't want to be bothered with petty arguments.

Sikubali jukumu. Read all posts at your own risk.
KerryL1 (California)
Posts: 14,550
Posted:
Melissa wrote: "I would then let the membership know that their dues money is involved and set aside a "social" budget. It would have to be agreed upon by enough majority to justify that expense."

But this is the kind of decision boards make. IF not in conflict with the governing documents, the board can vote to have one. The membership wouldn't vote on this. The board, of course, could do a survey to see the level of interest and what kinds of events residents might enjoy, but it's a board decision.

And, of course, renters would be included since there owners pay dues. Renters, after all may use the pool, etc.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
That logic doesn't make sense about not using amenities. Amenities attract potential buyers despite if one uses them or not. Having a pool, tennis court, a golf course, or other amenity is used as a sales tool. A pizza party/potluck is an OPTIONAL enjoyment option.

Again, if your HOA membership supports having such activities by all means have them. This may even include the purchases of gift cards, prizes, cards, and various gifts. Some HOA's like to give these things to deserving volunteers for their service. I am not one that supports this practice but nothing against other HOA's.

My point is being that the HOA money is ALL member's money. The board is just the representatives chosen to manage that money. It should be disclosed and agreed upon.

Former HOA President
RobertaS2 (Michigan)
Posts: 81
Posted:
This question caught my eye. It made me think twice.

Many of us would love to have social interactions and actually make use of the clubhouse. Some would not. I personally think it would make this a happier community, more connected, improve desirability here.

I went back through the by-laws and articles and declaration though and found no mention of it being something we could use HOA funds for. The board has awarded themselves and certain hand-picked volunteers gift cards...

How would you add that in if enough of the community wanted a social budget, director, etc.?

Did the board violate that by giving out the gift cards?
LetA (Nevada)
Posts: 2,679
Posted:
Quote:
Posted By MelissaP1 on 10/11/2019 2:46 PM
The HOA money is NOT your money... It is EVERY MEMBER's money. So how do you feel if the HOA was spending your dues on parties? Not that party's are wrong or not beneficial. They very much are a great way to gather the community. It's just the HOA funds are NOT set up to be spent on these type of expenses. Is this an operating expense? No.

Our HOA would never spend money on parties, provide coffee, or snacks at meetings. Now did we have these things? Yes. IF the people who WANTED to participate donated money or supplies. We may have the event at the clubhouse/common areas. The HOA funds were not used to pay for it. Pot-lucks are a good way to get people together but not spend HOA monies.

Question here!!! For those of you that don't have clubhouses that can accommodate meeting space, where do you hold your meetings? Community rooms in libraries have a closing time and 9pm is lights out.
One member suggested Denny's because they have a banquet room, the only quid pro quo is at a minimum pay for beverage service to use the room.

A once a year pizza party I'm not going to get into a twist over, monthly food expenses YES. Our board has an annual spring clean up, we rent two dumpsters from the trash company and owners bring their crap to dump. Later that day we have a BBQ picnic in the park burgers and dogs, nothing fancy just simple. It brings the community together and a chance for the community to see the BOD's and property manager.
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By LetA on 10/12/2019 6:30 PM
Question here!!! For those of you that don't have clubhouses that can accommodate meeting space, where do you hold your meetings? Community rooms in libraries have a closing time and 9pm is lights out.

Annual block party. Rain or shine. HOA rents a tent. Owners supply food and drinks.

One of the benefits of PA not being an open meeting state. Hold monthly meetings at a Board member's house. Owners attend by request/invitation only.

Open invitation business meetings. Township building (no charge because we pay taxes to township). If we use the main building, the doors are set to automatically 30 minutes before our scheduled time. We close up the place when we leave.

Sikubali jukumu. Read all posts at your own risk.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
NPS

A semantics issue. In SC we do not have to notify owners when and where the BOD is meeting yet our meetings are open to all if they know when and where thus we are no a closed meeting state. Is PA the same?

Our owners are free to Email the BOD and ask when and where the next BOD Meeting is ad we will tell them. At present we do not have one planned.
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By JohnC46 on 10/13/2019 10:52 AM
NPS

A semantics issue. In SC we do not have to notify owners when and where the BOD is meeting yet our meetings are open to all if they know when and where thus we are no a closed meeting state. Is PA the same?

Our owners are free to Email the BOD and ask when and where the next BOD Meeting is ad we will tell them. At present we do not have one planned.

PA law has strict requirements of advance notice and open invitation for the Annual Meeting, but no requirement for advance notice or open invitation for BOD meetings.

In my HOA, we have a standing invitation. Anyone who wants to attend a BOD meeting will be invited to the next meeting. But that's not required by PA law. It sounds like you do something similar.

The apparent difference between your situation and ours is that we don't have unexpected people show up at the meeting. This is important for us because the meetings are usually held in a BOD member's home. Some of our concerns are:

- If a meeting is scheduled at A's house for 7:00PM, we don't want random people ringing the doorbell and waltzing in at 7:15. Even if we turned them away, A would have to get up from the meeting and go to the door to have a conversation.

- A's house has seating room for only 7 people. B's house can handle 10. Township rooms can handle anywhere from 12 to 50. We need to know how many people to expect before we decide where the meeting should be held.

- Some BOD members don't want angry homeowners coming into their homes.

If we had our own meeting room, things would be different. But we don't. So logistics is always a primary consideration.


Sikubali jukumu. Read all posts at your own risk.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
NPS

Same here in that we meet at my house as I am the only single person on the BOD mine is generally the quietest.

We have never had more than one or two people ask to attend a BOD Meeting. Typically the Pres. has called the person and handled their request/questions so they never came to a BOD meeting. If someone wanted to attend, my suggestion is we deal with their issue first so they can leave and we will get on with the meeting.

Our Annual Meeting is at a library meeting room (no charge) about 3 miles away. We have to give a US Mail notification of such 30 days prior to the meeting. In the mailing notice we include an Agenda and a Proxy.
KerryL1 (California)
Posts: 14,550
Posted:
John & NpS this is a really interesting conversation, but many who could benefit from it won't see it because it strays so far from the OP's subject. Your topic is really with its own thread.
KerryL1 (California)
Posts: 14,550
Posted:
John & NpS this is a really interesting conversation, but many who could benefit from it won't see it because it strays so far from the OP's subject. Your topic is really worth its own thread.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By KerryL1 on 10/14/2019 10:37 AM
John & NpS this is a really interesting conversation, but many who could benefit from it won't see it because it strays so far from the OP's subject. Your topic is really worth its own thread.

I agree, we have strayed but the OP has not posted and the pizza party expense subject was beat to death.
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By JohnC46 on 10/14/2019 8:22 AM
We have to give a US Mail notification of such 30 days prior to the meeting. In the mailing notice we include an Agenda and a Proxy.

Our legal requirements are similar. 2 mailings required each year.

However, we refuse to spend any money on annual meeting postage. More than 90% of our owners agree to receive all materials via email. The other 10% get their documents hand delivered to the front door of the unit. No one has ever complained that we didn't use USPS as stated in our docs.

Sikubali jukumu. Read all posts at your own risk.
BarbaraT1 (Texas)
Posts: 821
Posted:
Quote:
Posted By LetA on 10/12/2019 6:30 PM
Posted By MelissaP1 on 10/11/2019 2:46 PM
The HOA money is NOT your money... It is EVERY MEMBER's money. So how do you feel if the HOA was spending your dues on parties? Not that party's are wrong or not beneficial. They very much are a great way to gather the community. It's just the HOA funds are NOT set up to be spent on these type of expenses. Is this an operating expense? No.

Our HOA would never spend money on parties, provide coffee, or snacks at meetings. Now did we have these things? Yes. IF the people who WANTED to participate donated money or supplies. We may have the event at the clubhouse/common areas. The HOA funds were not used to pay for it. Pot-lucks are a good way to get people together but not spend HOA monies.


Question here!!! For those of you that don't have clubhouses that can accommodate meeting space, where do you hold your meetings? Community rooms in libraries have a closing time and 9pm is lights out.
One member suggested Denny's because they have a banquet room, the only quid pro quo is at a minimum pay for beverage service to use the room.

A once a year pizza party I'm not going to get into a twist over, monthly food expenses YES. Our board has an annual spring clean up, we rent two dumpsters from the trash company and owners bring their crap to dump. Later that day we have a BBQ picnic in the park burgers and dogs, nothing fancy just simple. It brings the community together and a chance for the community to see the BOD's and property manager.

Closing time is a feature, not a bug. Most board meetings go on far too long. Having to be out of the building by a certain time is a good motivator to stay on topic. I am in an open meetings state. If the property had no space for a meeting, they were held at nearby places you describe: library, rec center, restaurant with a meeting room. In my less dramatic communities they could be held at a members home.
SamE2 (New Jersey)
Posts: 310
Posted:
We have our meetings on the front lawn. So far never had a problem with rain. When we have important/expensive items to discuss we rent a rec center or Elks hall.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By RobertaS2 on 10/12/2019 4:51 PM
This question caught my eye. It made me think twice.

Many of us would love to have social interactions and actually make use of the clubhouse. Some would not. I personally think it would make this a happier community, more connected, improve desirability here.

I went back through the by-laws and articles and declaration though and found no mention of it being something we could use HOA funds for. The board has awarded themselves and certain hand-picked volunteers gift cards...

How would you add that in if enough of the community wanted a social budget, director, etc.?

Did the board violate that by giving out the gift cards?

I think this question got lost - at least I didn't see an answer.

My answer is yes, the board was out of line. They're essentially awarding themselves compensation out of HOA funds, and board members may not use their positions for personal gain. If they wanted to pool their own money and buy gift cards for *other* volunteers as a thank you for their help, that's OK, but it needs to be clear that this is a personal transaction that has nothing to do with HOA funds.

In general, the only time a board member or volunteer should be compensated is as a reimbursement for personal funds spent on HOA business. For example, someone spends their own money to print the community newsletter. They should be reimbursed, but must provide the receipt as supporting documentation. If anyone is being paid out of HOA funds for work performed, that person is an employee, and that will open up a whole can o' worms.
GenoS (Florida)
Posts: 4,276
Posted:
Quote:
Posted By BarbaraT1 on 10/15/2019 5:46 AM
In less dramatic communities ...

LOL.

A friend of mine lives nearby and his 20-member HOA has their meetings around the community's pool. They don't have a clubhouse but there is a covered patio outside their little changing/rest rooms there. They cram in there if it rains but usually will change the meeting date if rain is in the forecast (48 hour notice required).
GenoS (Florida)
Posts: 4,276
Posted:
Edit: They will cram into the covered patio area, not the restrooms.
NpB (Arizona)
Posts: 605
Posted:
Where I live, HOA Pizza Party's do not receive good attendance and of the people that attend, they congregate into the same old cliques, which makes it a complete waste of money, since it also does not increase attendance at Board meetings. We get at the most 2 homeowners on average to attend a Board meeting out of 50 people. It's basically a free party for certain cliques.
GenoS (Florida)
Posts: 4,276
Posted:
One man's clique is another's group of like-minded homeowners.

Putting the terminology aside, the same group of people shouldn't enjoy free pizza every month on everyone else's dime.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I agree. Putting social clique on a group just excludes you from the crowd.....

Former HOA President

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