Out of HOA Tennis players

Started by DennisG7 • 18 replies • 921 views

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DennisG7 (Georgia)
Posts: 155

Posted:

After many years of poking a stick at the HOA BOD I was elected to the BOD this week and was tagged as the new President yesterday. That being said we held an initial meeting yesterday to review where we are. We are looking at ways to increase some revenues without raising annual dues again (raised 2 years in a row) the subject of out tennis courts came up.

We have 4 well maintained courts which are usually not available very much of the time to our HOA members for play. The courts are reserved much of the time by our Tennis Club for matches, many with non HOA members. A few days ago I stopped by to watch the matches and a group of 9-10 ladies left the courts and walked towards the parking lot. We exchanged of few pleasantries and I asked them where they lived in the neighborhood. Much to my surprise everyone of them said they did not live here! One offered a comment that many non residents play here because our courts are in great shape...we just dropped $26K on resurfacing them in mid August. New nets too.

So my question is...Do HOA's charge any type of fee for use of the courts to non HOA members? If so, I'd love to hear how much and how it's collected. If we charged something do we have any tax issues?

Appreciate your comments as we want to look at options before we talk with our Tennis Committee. The fees issue had been raised earlier ( a couple years ago) with the Tennis Committee but it appears they have no interest in charging anything for use of the courts. In the meantime I already had a couple of HOA members say they can't get on the courts many times because of Team Tennis playing. I've spotted a LOT of cars not from our HOA in the parking lot. That ells me that we have many non HOA players using the courts.

Dennis G7

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Dennis,

I wouldn't push for fees on non-residents. They'll not pay it. Besides, your local tennis players will invite them as guests, negating your effort.

The HOA needs to better regulate usage. If those non-resident players are using it like a public park, that needs to be restricted as ALL tennis activities (for this private facility) should be overseen by a local resident (dues payer). Sure, 10 people can be a guest for a small tennis league, but then you and the board can establish league rules versus general recreational hours for others. I'd be pleased to see the new tennis courts get used by a small "league" of players under the watchful management of a dues-payer who supports the league.

If these players are showing up at your place in lieu of visiting their city tennis courts, then that's a problem (they'll not know that some of your residents cannot access the court due to overusage by the tennis team).

If members of your tennis committee (if they play tennis) don't know these users, can't vouch for them or explain that those players help flesh out a service (tennis games) for the community, then it's a problem.

If the tennis league, featuring these non-residents, isn't welcoming of players who pay dues and want to participate, that's a challenge.

My own HOA board will tolerate or embrace non-resident participation in events that are hosted and directly managed by a dues-payers in good standing AND if any resident of the community can participate (otherwise it's a private event and we want a rental fee).

I would flesh out the scenario and understand it before instituting a crackdown that basically leaves the community w/ a dead amenity into which you recent poured a large cash investment. Find out those details...you may be able to create something for the community's benefit.

MarkW18
Posts: 1,290

Posted:

Someone needs to put their big boy pants on.

You charge the people using the courts enough to pay for its upkeep and reduced the cost to the HOA. If the HOA is mandatory, time MUST be set aside for people who do live in the community the opportunity to use, whether they do or not.

JohnT38 (South Carolina)
Posts: 1,631

Posted:

I would first try and get a better handle on how many residents claim that they have a problem with scheduling the courts. We use a web based survey called Survey Monkey that is great for these types of situations. The results you get from a survey may help you define the problem before you talk with the Tennis Committee. If you do have a problem, could you select certain days and hours where only residents can play and no tournaments are allowed?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Keep in mind that there was no complaint of nonmembers using the courts.

This started because the Board is looking at ways to keep from raising assessments.

Realistically, if there are any common components at all or services provided (trash, etc.), then to keep pace with inflation, an Association will typically need to raise assessments every year.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You do NOT generate income other than from dues in a HOA. Everything else could be subjected to taxation. The HOA is typically a NOT For Profit but NOT a charitable one. Which means the funds it raises must match what it spends out on operations/maintenance. (A reserve account is for capital expenses).

So don't go in this for a "profit" or "generating income". Like a previous poster said, you can charge for the use/wear/tear for the court. You don't charge a fee for making money.

Time to look at how a HOA budget works and who/how funds it. You can get yourself and the board in trouble if you don't.

Former HOA President

CathyA3 (Ohio)
Posts: 6,299

Posted:

Things you need to consider if you open your facilities to paying outsiders:

* Liability insurance needs to be beefed up (added expense). Talk to your insurance agent to see how much it will set you back.

* Your courts may now be considered public facilities, which means you'll need to worry about ADA compliance. Talk to your HOA's attorney about steps you'll need to take (added expense).

* Your HOA is probably a non-profit, which means you need to consider the tax implications of adding an income stream. Talk to your accountant about (probably added expense).

In addition, you'll have to consider the impact on your community from increased traffic, loss of availability of amenities, strangers in the community, etc.

Long story short, probably not a good idea.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Oh, and welcome to the wonderful world of being on an HOA board. This is when you discover that it's not as easy as it looks while you're outside poking sticks. :-)

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By DennisG7 on 12/22/2019 7:29 AM
In the meantime I already had a couple of HOA members say they can't get on the courts many times because of Team Tennis playing.

I recommend that the Board immediately direct the HOA manager to post a sign stating something like the following: "HOA members and their guests have priority on these courts. To exercise this priority, HOA members must have identification showing they are a HOA member. If you are not a HOA member, and you are playing with other non-HOA members, please politely leave the court when asked to do so by a HOA member who wishes to use the court."

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Dennis

Let me get this straight. You have a Tennis Club operating out of your tennis courts and the members of this Tennis Club are not homeowners. Do I have this right? If so, I want revenue from them.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Augustin’s post is good start.

Is the OP certain the HOA’s current liability insurance covers a circumstance where the HOA supports non HOA members’ use of the common elements? Has this been specifically brought to the attention of the insuring agency?

I would be very bothered if my HOA was maintaining capital equipment/common areas for non HOA members. I would be livid if I could not utilize the capital and equipment for which I am paying dues. Livid.

Lots of HOAs “make money,” btw .., they just pay taxes on that income.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Next to last paragraph ... wrt non HOA members using said equipment.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By GeorgeS21 on 12/22/2019 9:28 AM
I would be very bothered if my HOA was maintaining capital equipment/common areas for non HOA members. I would be livid if I could not utilize the capital and equipment for which I am paying dues. Livid.

Likewise I would want directors' heads on platters. I would likely run for the board (with a like-minded majority) because of this issue alone. And for any wise-guy or wise-gal HOA member who appears with Team Tennis yada at the courts and, while four non-members are using the courts, insists they are his or her guests and so are allowed to play with priority over members: No, dude. The Board should make it clear that any member wanting to exercise the privilege needs to be on the court, playing. A sign should limit play to two sets or one hour, whichever comes first, or some other appropriate limit.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Posted By MelissaP1 on 12/22/2019 8:39 AM

You do NOT generate income other than from dues in a HOA. Everything else could be subjected to taxation. div>

However, that is not enough of a reason to not consider it.

All associations likely "generate" income through savings.
Yes, the interest is taxable income.
So what. It's better then keeping the funds buried in the common area.

Many Associations (condo's are the more likely associations) actually invest their reserves in order to maximize their return. It's taxable income.

Larger Associations might choose to file form 1120 (vs. 1120-H), making all of their income, including assessments, taxable. However, this might be the better choice for them.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I am not saying that because something is subjected to taxes it shouldn't be done. Just understand there is a consequence for doing so. Like don't do a "bake sale" in your HOA and then wonder why you had to pay the state sales taxes...

Welcome back Tim... Happy Holidays!

Former HOA President

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

1st thing I would do is put a code lock on the tennis court gate. Nothing complicated, just a 4 digit code. Very simple and cheap to do. Change the code often and only provide it to residents. And ask them never to give it out. This will drastically cut down on the number of people from the public using the tennis courts. Also post a sign the court is for homeowners members, others will be prosecuted for trespassing, blah, blah. Your average honest person doesn't want a trespassing record for playing tennis. This will make people from the public think twice and know its not a public tennis court.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

At minimum, a sign needs to be put up at each court door.

SueW6 (Michigan)
Posts: 814

Posted:

Dennis
All your concerns and questions should have been discussed and resolved before August. Did you attend meetings when this was discussed?

Apparently the board thought the courts were a worthwhile asset, and voted to spend $$ on them.

You need to find our why.

LetA (Nevada)
Posts: 2,679

Posted:

Dennis, you don't say if you are a gated or non-gated community or condo assn: You mention a tennis club, perhaps this tennis club pays for the use of the court through membership fees, like country club memberships or HOA communities that have a golf course. Those golf courses sell non HOA owners memberships. I have a feeling this is the case for you.

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