Exercise Class

Started by EricB13 • 9 replies • 265 views

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EricB13 (Illinois)
Posts: 29

Posted:

We have a resident who would like to host a exercise class at our clubhouse for $5 per class and in exchange they will pay the HOA back 10% of earnings.

Our bylaws state-
No Business for Profit: Nothing herinabove contained shall be construed to give the Board authority to conduct an active business for profit on behalf of all of the Owners or any of them.

So since the resident is not paying the normal room rental fee, could this still be allowed?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Could it be allowed?

Realistically, the board can do what they want until someone calls them on it.

Should it be allowed?

If the classes are open to the general public - then no. Gets into ADA compliance issues, etc.

If the classes are only open to the members - perhaps, but then why charge the $5 per class.

Personally, if I were on the board, I would vote against it.
Mainly due to potential liability and the possibility of needing to comply with ADA requirements if open to the general public.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By EricB13 on 08/21/2023 11:12 AM
We have a resident who would like to host a exercise class at our clubhouse for $5 per class and in exchange they will pay the HOA back 10% of earnings.

Our bylaws state-
No Business for Profit: Nothing herinabove contained shall be construed to give the Board authority to conduct an active business for profit on behalf of all of the Owners or any of them.

So since the resident is not paying the normal room rental fee, could this still be allowed?

This isn't really the board conducting an active business. The owner wants to conduct the business.

Here's where I have issues:

* The owner *is* paying a rental fee. Or it's a kickback. In any case, this is legally messy, will have tax implications, and looks like somebody's trying to get cute. (This kind of proposal out of a prospective partner would make me walk away without any further discussion.)

* What do your governing documents say about owners running a business on association property? There may be a restriction against this.

* You're almost certainly not insured to cover your risks. Talk to your insurer.

* Assuming you get past these hurdles, you should also consult with the HOA attorney to see what sorts of waivers and releases from liability you'd need to have signed to protect you when someone gets hurt. (I've taken my share of exercise classes. Most of the waivers I had to sign included the phrase "up to and including death" when it discussed risks.)

If I were on the board of an association that was thinking about this, this would be a hard "no" from me. The board is supposed to act in the best interests of the HOA, not in the best interests of the owner offering classes.

ElleN (Idaho)
Posts: 4,420

Posted:

I too would vote against allowing this. The main reason is because I do not support one owner monopolizing the use of a common area for a set time, particularly for a profit.

I agree with all the reasons TimB4 and CathyA3 gave as well.

EricB13 (Illinois)
Posts: 29

Posted:

We do have member only events where we charge a small additional fee on top of normal dues. For example: when we have an adults only dinner party.

So in this instance, I wouldn't feel weird about having residents pay a fee. But it seems like to do it the right way, the HOA should be paying for the instructor to come out and provide their insurance.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Consult the HOA attorney about adult-only events. (Hint: Fair Housing laws.)

MarkM19 (Texas)
Posts: 1,459

Posted:

Eric,
I am with the rest of the group. This would be a bad idea on many fronts. What are you going to say to the next owner with another Idea for them to make money using HOA property? Very easy for someone to get hurt doing any type of exercise they may not be used to IMO. Also having many sweaty people in a small area leaves smells that will need to be handled.

Much easier to avoind than try and kick them out once it is allowed.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Also: savvy exercise instructors carry their own liability insurance if they know what's good for them. They don't rely on someone else to provide it. They're also fussy about the venue they work in. For example, depending on the type of exercise, the room may require certain kinds of flooring to prevent injuries. I expect that most HOA clubhouses weren't constructed to host aerobics or dance classes since sprung flooring adds to building and maintenance costs.

(This just keeps getting worse.)

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By CathyA3 on 08/21/2023 12:50 PM
Consult the HOA attorney about adult-only events. (Hint: Fair Housing laws.)

[snicker]

But CathyA3 is correct.

KerryL1 (California)
Posts: 14,550

Posted:

Agree with all others. Terrible idea; too many risks that you, Eric, as a director, must help your HOA avoid.

Additionally, your own Bylaws, imo, say you may not permit this: "Our bylaws state- 'No Business for Profit: Nothing herinabove... [gives] the Board authority to conduct an active business for profit on behalf of all of the Owners or any of them.'"

Your Assn., by permitting access & getting a piece of the profit could be said to be "conducting" the business "on behalf" of this resident. This is VERY different than the Board or a board-authorized committee charging residents a fee to attend a social event to cover the cost of food/beverages. There is no profit involved.

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