HOA renting out amenities?

Add parking and traffic concerns to the above list.

Pres sounds like a yes we are far in debt but let us have a bake sale type simple thinker.

I agree. I would wager he/she is the type that does not know a HOA rule from a HOA covenant and is going around saying, "I do not know why other Boards did not think creatively of other ways to boost revenue besides raising the assessment... "

Should have noted - we have fully funded reserves and don’t need the additional funds.

Is everyone skipping over the reason for doing this is to generate HOA revenue??? A HOA is funded by it's members only via dues. It is to collect as much as it spends. So it is NOT into collection money outside of that. That is considered a profit and subjected to taxation. Plus your ruining your assets by allowing outside non-members using it.

How will the Board vote on this idea, George?

I just don't think the new President understands how a HOA works. Have seen this before. They heare "corporation/business" and mind goes to "Make money". They don't get that not for profit means. It's NOT a charitable corporation. It isn't to make a "profit".

You get money ONLY from it's membership. That is by Dues and Special assessments. Fines/late fees are NOT for making money. Those are punitive measures. Having a "bake sale" or renting out amenities is NOT on the approved way of generating money. A committee may be able to do a "bake sale" for it's needs if it isn't being funded by the HOA budget. Otherwise you ONLY collect by Dues/Special Assessments.

Plus when you rent out amenities you end up needing more maintenance or replacement expenses. There is more wear and tear increasing the long term maintenance expenses. Not a good idea.

Don't forget the income tax implications here!

Aside for HOAs/Condos in general: I believe the Fair Housing Act's/HUD's requirements for accommodation of disabilities result in a distinction without a difference.

I think I'm in the minority here . . . but if done properly (considering necessary tax, liability, legal issues, and other pros/cons/issues already mentioned); if done in the best interests of the membership; and if not prevented by your HOA documents and state HOA law, I think it's entirely possible to rent out your gazebo and generate some income.

Certain folks keep harping that an HOA is ONLY FUNDED BY ITS MEMBERS. I don't think that is accurate or needs to be the case. A quick example negating that statement is the interest gained on bank accts or other investments (CDs). This is income not from the members.

I think folks are confusing income with profit. Among other things, being a non-profit generally means that for the year, income is equal to expenses. If income exceeds expenses, then there is profit which is generally not permissible. If the income were to be generated through assessments only (paid by all members), then that is one way to do it. However, if there were other sources of income that then lessened the assessments owed by the members; then this is another way to do it.

A quick Google search brings up many ideas for how HOAs can generate income from things that are not only member-paid assessment. And nowadays, depending on each HOA's and each member's own situation, it may be entirely necessary to find other sources of income.

Again, there are certainly pros and cons to renting out your own HOA amenities and finding other sources of income, but I think it's allowable and if done properly can be a great way to reduce the financial burden on an HOA's membership.

Thanks to All!

Yes - I think the Board understands the issue - and, I have provided a lot of pro/con feedback to the board from reading on the topic, and from the advice provided herein, as well.

The community will first hear of this in a few weeks - and, to be clear, the amount of money generated by renting this amenity out would probably not total $1,000 on an annual basis - small peanuts. The community is broadly happy and not involved - we provide LOTS of information, status major projects often, have a boring board interested in maintaining property values, activist on inspections and standards - but otherwise not doing anything weird. Have 2-3 people attend the online Board meetings, 4-5 at in person meetings (pre-C19), 10 at annual meetings with lots of proxies for quorum.

Once the board meets and this is discussed - assuming the president even wants to put it on the agenda - I suspect it will die slowly, as many unnecessary things like this do :-)

Thank you All, again!