HOA & Social Committee issues-HELP

Started by BenM3 • 3 replies • 417 views

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BenM3 (California)
Posts: 1

Posted:

I've been on various boards and never seemed to have an issue with the Social Committee till now. Unfortunately the community I now reside is in great peril and the social committee seems to be just as out of the control as the community. I reside in Florida and know my statutes, but need help trying to re-organize this group. This committee has been left alone for years, but it seems they have an abundance of money, make their own rules and will not adhere to board requests for updates from meetings and minutes.

I've always followed a procedure that they can not make a profit, but the pushback is beginning to flare up. How can I get around this issue? Any insights or suggestions would be helpful. I reside in Florida and our statute 720 doesn't cover this section. I know that based on governing rules and regulations that are set fourth in our documents should cover this, but I have found nothing to substantiate this committee.

Thanks for your time.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By BenM3 on 08/29/2021 8:38 AM
I've been on various boards and never seemed to have an issue with the Social Committee till now. [snip] This committee has been left alone for years, but it seems they have an abundance of money, make their own rules and will not adhere to board requests for updates from meetings and minutes.

I've always followed a procedure that they can not make a profit, but the pushback is beginning to flare up. How can I get around this issue? Any insights or suggestions would be helpful. I reside in Florida and our statute 720 doesn't cover this section. I know that based on governing rules and regulations that are set fourth in our documents should cover this, but I have found nothing to substantiate this committee.

-- First, those who serve on HOA committees serve at the pleasure of the HOA board. For one, see the Florida Nonprofit Corporation Act, section 617.0825, at http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0617/0617.html Note in particular this statement from the Act: "Each committee must have two or more members who serve at the pleasure of the board of directors."
If you cannot find similar language in your HOA's governing docs, then please post and attach your HOA's Declaration or Bylaws with identifying information (like the name of your HOA) redacted.

-- Second, what exactly do you mean when you say this committee has "an abundance of money"? From where is the committee getting this money? Does the committee have its own bank account? What do you mean when you say the committee is making a profit?

-- Third, are individual committee members pocketing money intended for activities the committee runs for all owners in the HOA? If so, see FS 720 at http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0720/0720.html, and do a keyword search for "compensation prohibited".

-- Fourth, one authority that says the board runs the HOA is the Florida nonprofit corporation statute. See section 617.0801 states:"All corporate powers must be exercised by or under the authority of, and the affairs of the corporation managed under the direction of, its board of directors, subject to any limitation set forth in the articles of incorporation."
Your HOA's Bylaws or CC&Rs likely say the same. Granted you may not recognize the wording and need some help on this from those experienced with this sort of thing.

-- Fifth, are you a director (and so a member of the board)? Do a majority of directors feel as you do?

KerryL1 (California)
Posts: 14,550

Posted:

Same question as Augustin, especially where does their money come from??

In CA, committees that spend HOA funds, like our Social committee, must turn in meeting minutes that show how they spent funds each month.

If the Committee doesn't adhere to the Board's request for information about its activities, the Board can disband it. Why do you, Ben, think the board hasn't disbanded this committee.

TimB4 (Tennessee)
Posts: 21,059

Posted:

I have a different question:

Are the funds of the committee kept separately or commingled with the operating budget?

If they are kept separately, they should be their own entity and pay appropriate taxes.

If they are commingled, any funds that come from things other then assessments, those funds are taxable (using form 1120-H) or, worst case, if the funds are too much - then the Association may be required to file form 1120.

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