EricB15 (Maine)
Posts: 2
Posts: 2
Posted:
I live in a community that is 501(c)(7) Social Club. Does anyone know the advantages or disadvantages vs an HOA?
A service of:
Community123.com
Professional websites for HOAs & condos, since 2004
Professional websites for HOAs & condos, since 2004
🎁 1st year FREE for HOATalk members! →
Social Club vs HOA
Started by EricB15 • 12 replies • 1463 views
💬 Join us to post & get advice from 50,000 HOA & Condo leaders.
Create Free Account →
⚡ Takes 30 seconds
Already a member? Log in
SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
HOW's are usually set up to manage a community's common areas, such as roofing for a townhouse community. As you may know, homeowners in that community pay assessments to look their resources to care for the common areas.
When I hear social club, I usually think of something voluntary, where the members participate in social activities, which may be as simp!e as having dinner parties every month. Large clubs may own buildings where they meet and hold such activities and membership fees help pay for the upkeep.
I'm sure I may be oversimplifying this, but only you can tell if your community organization is advantageous to You or not. In fact, you should have asked about this before you bought your home, but that's not unusual either. Lots of people on this website and elsewhere bought their homes but didn't understand what they were Getting into. By the time they figure it out,the ink on the closing documents has dried and it's too late.
So you'll need to sit down and read your community documents and decide for yourself. The bylaws usually dictate how the HOA is run, while the CCRs dictate how the common areas are to be used. You may also want to ask about additional rules established by the board and get a copy of ynose. If you're new to HOW !iving, all this stuff groundbreaking that like it paperwork you got at closing. If not ask your neighbors where to get them
When I hear social club, I usually think of something voluntary, where the members participate in social activities, which may be as simp!e as having dinner parties every month. Large clubs may own buildings where they meet and hold such activities and membership fees help pay for the upkeep.
I'm sure I may be oversimplifying this, but only you can tell if your community organization is advantageous to You or not. In fact, you should have asked about this before you bought your home, but that's not unusual either. Lots of people on this website and elsewhere bought their homes but didn't understand what they were Getting into. By the time they figure it out,the ink on the closing documents has dried and it's too late.
So you'll need to sit down and read your community documents and decide for yourself. The bylaws usually dictate how the HOA is run, while the CCRs dictate how the common areas are to be used. You may also want to ask about additional rules established by the board and get a copy of ynose. If you're new to HOW !iving, all this stuff groundbreaking that like it paperwork you got at closing. If not ask your neighbors where to get them
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
I would look at your community documents and see what homeowners' obligations are. If your county recorder has a web site, you may be able to download copies of various HOAs' governing documents and other legal agreements. Savvy home buyers will do this sort of legwork before signing purchase agreements, since it can help you weed out communities with undesirable features.
In HOAs (and condo associations), homeowners are basically financial and legal "partners" who share in the fortunes of the association, good and bad. The main obligation is paying assessments that allow the association's board of directors to pay the bills. Many homeowners, if they're lucky, won't be aware of the legal relationship. They may find out if something goes wrong. For instance, if the association is sued and legal costs result in assessments rising dramatically - or if the board neglects to carry adequate insurance, and homeowners discover that they are personally liable for making up the difference.
Another obligation is running the place, although the large majority of homeowners don't recognize this and assume that it's somebody else's problem. Unfortunately there is no HOA Fairy that does all the work. The work is done by volunteers who are elected to the board of directors, and the exact details of how the association is to be governed will be spelled out in the governing docs. The board members can't just make it up as they go along, although this comes as a surprise to more than a few of them.
Many HOAs and COAs sponsor social events, but this is not their primary function. In fact, if the governing docs say nothing about social events, you can make a good argument that it isn't their function at all. The only exception I've seen is a 55+ "active adult" community in my area that specifically advertises the activities provided by the HOA and that has a full-time social director on staff. But this is not the norm.
In HOAs (and condo associations), homeowners are basically financial and legal "partners" who share in the fortunes of the association, good and bad. The main obligation is paying assessments that allow the association's board of directors to pay the bills. Many homeowners, if they're lucky, won't be aware of the legal relationship. They may find out if something goes wrong. For instance, if the association is sued and legal costs result in assessments rising dramatically - or if the board neglects to carry adequate insurance, and homeowners discover that they are personally liable for making up the difference.
Another obligation is running the place, although the large majority of homeowners don't recognize this and assume that it's somebody else's problem. Unfortunately there is no HOA Fairy that does all the work. The work is done by volunteers who are elected to the board of directors, and the exact details of how the association is to be governed will be spelled out in the governing docs. The board members can't just make it up as they go along, although this comes as a surprise to more than a few of them.
Many HOAs and COAs sponsor social events, but this is not their primary function. In fact, if the governing docs say nothing about social events, you can make a good argument that it isn't their function at all. The only exception I've seen is a 55+ "active adult" community in my area that specifically advertises the activities provided by the HOA and that has a full-time social director on staff. But this is not the norm.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Eric
Maybe the answer is here:
https://cullinanelaw.com/501c7-social-and-recreational-organizations-how-to-stay-tax-exempt/
Maybe the answer is here:
https://cullinanelaw.com/501c7-social-and-recreational-organizations-how-to-stay-tax-exempt/
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Does your HOA have common areas? This sounds more like what an "HOA" would be if they don't have common property. The money isn't going towards maintenance items, insurance, or operation costs normally associated with HOA. It's more of a group of neighbors whom have formed a "Club" of which contribute money to for more social events. Let's say you all pay in money so that can give awards for "Prettiest yard" or maybe do Christmas lights.
You can't make charitable contributions to it in hopes of a tax break.
You can't make charitable contributions to it in hopes of a tax break.
Former HOA President
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Here is the major difference between the two:
"Unlike other Section 501(c) corporations, the purpose of social clubs must include mingling of the members; the members cannot merely share some interest." (from https://wagenmakerlaw.com/blog/social-club-q-section-501c7-tax-exempt-organizations)
Members of an HOA are not required to mingle, and in fact may not even know each other. As I'd mentioned earlier, I've seen only one HOA that includes social events as part of their purpose - none of the other governing documents I've read mention such things. The main purpose of the HOA is to maintain commonly-owned property, which can include green space, streets and other community infrastructure. A social club may have to maintain some property, such as a meeting space - but this is in support of its main reason for being (to allow mingling of members) rather than its main purpose.
"Unlike other Section 501(c) corporations, the purpose of social clubs must include mingling of the members; the members cannot merely share some interest." (from https://wagenmakerlaw.com/blog/social-club-q-section-501c7-tax-exempt-organizations)
Members of an HOA are not required to mingle, and in fact may not even know each other. As I'd mentioned earlier, I've seen only one HOA that includes social events as part of their purpose - none of the other governing documents I've read mention such things. The main purpose of the HOA is to maintain commonly-owned property, which can include green space, streets and other community infrastructure. A social club may have to maintain some property, such as a meeting space - but this is in support of its main reason for being (to allow mingling of members) rather than its main purpose.
GenoS (Florida)
Posts: 4,276
Posts: 4,276
Posted:
I actually think the OP's question is outside the scope of this forum. This isn't a tax advice forum. I mean, I wouldn't go to an aviation-related website and ask what the difference is between an airplance and a motorcycle.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Quote:
Posted By GenoS on 12/10/2020 1:53 PM
I actually think the OP's question is outside the scope of this forum. This isn't a tax advice forum. I mean, I wouldn't go to an aviation-related website and ask what the difference is between an airplance and a motorcycle.
I actually think the OP's question is outside the scope of this forum. This isn't a tax advice forum. I mean, I wouldn't go to an aviation-related website and ask what the difference is between an airplance and a motorcycle.
I agree and I think the major differences are taxing/deduction issues.
AugustinD
Posts: 5,144
Posts: 5,144
Posted:
Quote:
Posted By EricB15 on 12/09/2020 9:09 AM
I live in a community that is 501(c)(7) Social Club. Does anyone know the advantages or disadvantages vs an HOA?
I live in a community that is 501(c)(7) Social Club. Does anyone know the advantages or disadvantages vs an HOA?
I suggest the OP explain why he wants a HOA.
Else I agree with Geno.
EricB15 (Maine)
Posts: 2
Posts: 2
Posted:
Thank you all for your input. I am very well versed in Social Clube as well as HOA's. I was just looking for additional information. Again, many thanks! Stay healthy, wear a mask!!
JohnC77 (California)
Posts: 562
Posts: 562
Posted:
Quote:
Posted By GenoS on 12/10/2020 1:53 PM
I actually think the OP's question is outside the scope of this forum. This isn't a tax advice forum. I mean, I wouldn't go to an aviation-related website and ask what the difference is between an airplance and a motorcycle.
I actually think the OP's question is outside the scope of this forum. This isn't a tax advice forum. I mean, I wouldn't go to an aviation-related website and ask what the difference is between an airplance and a motorcycle.
I think all of us would like to know the difference between a airplance and a motorcycle.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
If it drives, flies, floats or F's, rent it, do not buy it.
🎯 You've read this entire discussion
Join the conversation with 50,000 HOA & Condo Leaders:
- ✓ Ask follow-up questions
- ✓ Share your experience
- ✓ Get expert advice
- ✓ Access 350,000 discussions
Create Free Account →
⚡ Takes 30 seconds
Already a member? Log in here