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Annual Meetings

Started by ShanelleB • 13 replies • 1452 views

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ShanelleB (Washington)
Posts: 3
Posted:
"Acting" President (really the VP) for a small 21 home community. We have our annual meeting every February and I was wondering if anyone uses a small amount of money to buy beverages and appetizers for their meeting with the "money on hand". We have a very limited set of by laws and it stats nothing in there about this. Just a question. Thanks
SusanW1 (Michigan)
Posts: 5,202
Posted:
I see nothing wrong with non-alcoholic beverages and snacks being served at annual meetings.

If this works for getting your Members there, let us know.
AnnaD2 (Florida)
Posts: 960
Posted:
Is "money on hand" part of your budget? Is that a line-item? Just curious. It may work for your association.....but if anyone challenges it you'd better be prepared for an explanation of using those funds for food.

As I said....it may work for you.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
SusanM,
If you are going to buy whatever, why would you exclude alcoholic drinks? Is it written somewhere that you can buy Coke but not Bourbon? Of course not. Old English Proverb; In for a penny, in for a pound
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By RobertR1 on 11/18/2008 4:10 PM
SusanM,
If you are going to buy whatever, why would you exclude alcoholic drinks? Is it written somewhere that you can buy Coke but not Bourbon? Of course not. Old English Proverb; In for a penny, in for a pound

You would exclude alcoholic beverages because you would probably need a liquor license. Also, there's too much liability. Are you aware that bartenders are usually insured for liability in case they are sued? I don't think HOA liability insurance would cover the association for any lawsuit that might arise out of serving alcohol.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Bruce,
Just playing Devil's advocate.

But, you don't need a license to give alcoholic beverages away, you do to sell them.

But you can not ignore any responsibility you may have serving them. But, your guest or your invitee, you may be responsible for in your home, I doubt in a community building, unless underage. But still in for a penny, in for a pound.

GeorgerwilliamsW (Indiana)
Posts: 975
Posted:

I did a quick search of the covenant documents on hand. This a typical provision:
    Section 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety and welfare of the Owners and residents of the Property, to construct, manage, improve, maintain, repair and administer the Common Area and the Landscaping Easement and for payment of any other costs and expenses incurred by the Association in connection with the performance of its duties."
It would be reasonable to assert that the board of directors may determine that using association funds to pay for food and drink at an annual meeting is an appropriate expense for the promotion of the welfare of the Owners and residents, particularly if it entices a larger turnout.I could find none that specifically restrict associations from paying for food and libations.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By RobertR1 on 11/19/2008 3:18 AM
Bruce,
Just playing Devil's advocate.

But, you don't need a license to give alcoholic beverages away, you do to sell them.

But you can not ignore any responsibility you may have serving them. But, your guest or your invitee, you may be responsible for in your home, I doubt in a community building, unless underage. But still in for a penny, in for a pound.


Robert,
Not too sure about that. You may be correct, but I've belonged to several fraternal and veteran's organizations, service clubs, etc., in more than one state at one time or another. Laws and local ordnances vary widely. What makes the difference is that we're not talking about an individual serving alcoholic beverages in his/her home. We're talking about an organization, and most likely a chartered corporation at that. Whether in a community building or not, the party serving the alcoholic beverages (or even the one sponsoring the event) can be held responsible. I've noticed over the years that there has been a decline in the social functions that have "open bars" because of the potential liability. Most nowadays have either a cash bar or use tickets in an effort to limit the number of free drinks.

BTW, I was pretty sure you weren't really serious.
RobertR1 (South Carolina)
Posts: 5,164
Posted:

Your reply, George,

It would be reasonable to assert that the board of directors may determine that using association funds to pay for food and drink at an annual meeting is an appropriate expense for the promotion of the welfare of the Owners and residents, particularly if it entices a larger turnout.I could find none that specifically restrict associations from paying for food and libations.

It would also be resonable to assert the following:

It would be reasonable to assert that the board of directors may determine that using association funds to pay for food and drink at an annual meeting is not an appropriate expense for the promotion of the welfare of the Owners and residents. The assumption or expectation of providing libations to the owners in return for a large turn-out it beyond the Board's capability to accurately predict and as such is a gamble, a gamble with needed funds provided by the owners to maintain the real property. I could find nothing that specifically
directs or suggests that paying for food and libations, from assessments, is proper.

But, I am not dense enough to suggest my editing makes anything different. Some associations do it, some don't. I would be much more comfortable if I lived in an association that couldn't find better uses for the money or an association that has operated over the years effeciently and has a "large reserve fund" and operates in the black historically. But my big hang up about this is the insistence by some that you can buy owner interest with "libations and entertainment."

Our little group of full timers recently had the pleasure of a small group of "Gospel Singers" that happened to be visiting an owner who had invited them to come down for a week-end and enjoy the beach, etc. One of our group quickly got together a little presentation by this group and distributed notices through-out our complex, announcing an all welcome invitation. Well, not only did the group provide entertainment, they insisted on providing food, etc, as a way of thanking their host for inviting them. Now folks, I'm not suggesting "Gospel" as a way of life, but, it was a success and some pleasent memories were made.

GeorgerwilliamsW (Indiana)
Posts: 975
Posted:
I sense by your response that you think I advocate spending association funds on food and libations. I do not. Nor am I opposed to it should it be in the best interest of the association.

In my mind we elect board members to exercise their wisdom and judgment in making the very best decisions they can. If a board, using its wisdom and best judgment determines that a particular expenditure is in the best interest of the association, then so be it.

Decision making entails risk. Every decision carries with it some sort of risk. One can disagree with the decision and the assessment of the risk, but that does not invalidate it. Nor does it invalidate the risk assessment the board makes in arriving at its decision. Some people are risk averse, others are risk takers.

There are two approaches to governance. The first is that everything is prohibited except than that which is specifically allowed. The second is that everything is allowed, except that which is specifically prohibited.

I am an unswerving advocate of policy governance. That means, of course, that I do not advocate mind-numbed enforcement of covenant restrictions and rules. I do not believe that if there is a rule, it must be enforced to the letter without question. There may be instances in which enforcement is not in the best interest of the association, or the cost of enforcement in a particular instance exceeds the value, or enforcement is simply not fair, equitable, reasonable or just in the particular circumstances.

Now how we go about "buying owner interest" (your term) is another matter. We live and work in the real world, not in some Utopian society in which every association member's first priority is an active interest in the affairs of the community. I think it is well understood that when people break bread together business is more easily conducted.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
For what it's worth, our association typically serves refreshments at annual and special meetings of the unit owners. About 4 meetings a year - coffee, soft drinks or juice, cookies and small pastries. Left over coffee is tossed and any remaining refreshments are stored in the refrigerator in the clubhouse. Residents who use the clubhouse in the following days (excercise room, club meetings, etc.) are free to consume what is left. The cost to do this works out to be less than 0.05% of our annual budget, or less than $0.12 per unit per month, because many of the cookies and pastries are donated.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Nope Gerorge, you read me wrong. I have remarked that this sort of thing happens at my association. I said I didn't approve, but I wasn't willing to go to war about it, but, if I thought it was abused, I would take exception. Which makes me on your side of the fence doesn't it. Just a matter of degrees.

I like the purity of the folks, for instance, this year, dug out all the xmas lights, thousands, and over the summer got everything back in shape again. Hell of a job, hours and hours of work. Then a few of us put all the lights up in courtyard, and intend to have a lighting event around Dec 1st. Just Hot Chocollate and cake and if you want BYOB, no problem with that. Two of our owners (president and wife) are going to buy a tree and it will be lighted as well. All invited and didn't cost the regime a cent this year. Incidentally, that little fact was the motivator for doing the job.

As far as the election of Board members conveying any super talents to the BOD, my impression is this don't seem to happen. Wittness all the posts here that deal with unhappy members complaining about the Board. Again, don't read me wrong and think I damn all Board members. It's a tough tough job at times, it is also a job that actually doesn't DEMAND that you do it well. Who's to judge? More important, whose to know.

You have to admit; job oversight is much more stringent at Micky D's, than elected Board members of associations.
GeorgerwilliamsW (Indiana)
Posts: 975
Posted:

    You have to admit; job oversight is much more stringent at Micky D's, than elected Board members of associations.


And that is the crux of the problem. The issue with the governance and management of homeowners associations is the lack of checks and balances and separation of powers in what are essentially private governments. In a Utopian society, such checks and balances would not be necessary. But, sadly, we don't live in Utopia nor Lake Woebegon where "all the women are strong, all the men are good looking, and all the children are above average."
RobertR1 (South Carolina)
Posts: 5,164
Posted:
eorge,
I readily agree, it's a mess. However, I just had a little eye surgery this am and right now I can't tell the strong women from the good looking men. In a couple of hours I intend to go out and make sure things are back to normal. I don't recall seeing any good looking men, ever, but I seem to get by just viewing the distaff side. Please, no one answer this.

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