Pool Membership for sale

I am a member of an HOA in NC. Our Board of Director’s decided to invite and collect a fee for Pool access from people who live in neighboring communities. I do not use the pool. A neighbor told me about touch and concern covenants would this change from a real covenant to a personal covenant so I do not have to pay for the pool I don’t use?

Would this also change the non-profit corporation status now that the HOA is receiving income from outside it’s membership?

Would the HOA have any issues with insurance now that they are offering non-members a membership to use the pool?

Would any of this change the tax rate on the land the HOA owns?

I agree with Michele except for one thing. The fees collected from nonmembers for use of the pool would be considered non exempt function income and be subject to tax. Good news is that the assn may qualify as a tax-exempt org under the IRS 501(c) designation becaue they are extending their amenities to the community at large.

Susan,

In this instance the nonprofit is an HOA which means, for tax purposes, they either file on a tax form 1120 (corporations) in which case they are taxed on their net income so whether it's a wash or not is a moot point. Or if they file an 1120H (HOA specific), meaning they fall under Chapter 528 of the IRS Code, pool rental fees to non members would be nonexempt function income and subject to tax. Net income is not the basis for tax; nonexempt function income is. This income may result in a "wash" on the f/s, but according to IRS code, it is taxable income.

It should have said that the DNO insurance may not cover any claim on this issue.

I understand your concern with the tone of my posts.

As a member of this HOA, if any one of these non-members has an accident or files a claim of any kind the Members will have to pay the price of the Boards choice to make a few bucks on the side. I would rather be a whistle blower and have to pay an extra $10 to cover the additional costs now than $1000 because the Board was not covered and cant pay out of their own pocket at the end of the day.

I dont see my desire for our HOA to follow the rules and pay. I don't think following the rules that have been laid down by the state and county would be to much to ask a Corporation, it should be expected.

To turn a blind eye to this maybe more costly in the end.

If amenities are for Members only, and the insurance is based on Members using HOA owned properties, then allowing the public access to those amenities should be of concern.

No one knows the motive of the OP, but the liability insurance policy should have been examined and explained to the Members.

Please share with me the portion of your governing documents that states that the board cannot open the pool to paying non-members without first going through the membership.

Our governing documents cover a lot of ground, but if our board decided to rent out the common area to non-HOA members, the documents would not prevent them from doing so.

If I am not mistake permission from the Association would required a vote of the members.

Or it could just mean permission by the elected representatives of the association, i.e., the board.

True, Kevin, but it's more likely that the BOARD is the entity that has the right to adopt rules.

In which case they have done so. Within the authority of their documents.

They may not have that right or authority, but without knowing his docs, we can only guess.

I'm just saying, it's very likely that an amendment or a vote of the entire membership isn't necessary.

It may be, but I'd like to see the area in the documents that makes it so.

once again thank you all for your input.

I will have to agree to disagree with some of you at this time.

I'm sort of getting that drift, too.

Once again thank you for your opinions, if you would like some more back ground on the situation. This community has problems.

The original developer buys 200 acres but only mentions 96 of those acres in the CCR's 1999.
2003 Second developer buys the balance with engineering plans and city approval etc from developer 1. Takes over declarant status. Life goes on and after 280 homes built and sold outside the 96 acres.

2006 a couple of guys in the hood dont like developer 2 and find the loop hole and break up the community.

In 2006 Developer 1 announces that they made a mistake by only mentioning 96 not the whole 200 acres. Day late dollar short

Same guys find 97 proxies and vote themselves in. New Board feels we all must read and interpret and follow to the letter of the law as a campaign promise. Now they have taken a whole different attitude. Quoted in board meetings by saying they did not have the time to deal with violations for months. Altered election results in the minutes. The list goes on and the link is below.

To end the story with the HOAless. Developer 2 starts new HOA with the remaining land and offers voluntary membership to the new HOA.

The current board set the standard of applying the CCR's to the letter. I have no grudge. Just needed an opinion for a different view point.

http://www.projecttmf.com/HOAinfo.html

Great place to live if you love drama.

Thanks again for your opinions.

Mary:

With all due respect the insurance carrier does not have a relationship with MS8 or any other property owner. Their relationship is with the Board. Any contact should be between the Board and the carrier.

Perhaps, the Board has already done what you suggested. If not then a concerned property owner should address this with the Board or management.

Not take it upon themselves to act on their own.

We recently had a unit owner who thought they had the right to call and discuss a legal matter with the property's attorney. Not so!

The attorney has been hired and retained by the Board NOT the individual unit owners.

And to MS8 good luck with the many issues you have listed. But none would seem to come as a result of the fault of your current Board.

THE END...................

Still doesn't give you the right to do what you did over the pool thing.

You should read your docs and, as someone else mentioned, UNDERSTAND them.

You are using this as a strawman to do some real damage in other areas.

The taxes won't be affected, and it appears they do have the right to set rules and regulations, which covers rules and regulations regarding the pool.

You've already shown what a vindictive person you can be.

Don't try to wrap yourself in "I'm just looking out for the HOA" now.

It's too late. You already revealed your true agenda, and this ain't it.

Work on the stuff that's really wrong. Don't try to manufacture problems where none exist.

Oh and by the way, if we had a member who kept hammering at us for things we know are not an issue, we'd pretty much ignore him after a point, as well.

Jon,

I agree with you! I was thinking she is a board member. My mistake.

We have several members with whom I will not speak. I have also directed the MC to hang up on them if and when their behavior becomes problematic.

Every property has a few.

As President I have been assaulted, sued, threatened and harassed. But still here after 22 years.

As my GrandMother used to say "you teach people how to treat you" when you appraoch them with respect most times you will get the same in return. When you make an effort to cause them problems, take actions designed to damage them no wonder they shut you out.

As to MS8 I have no idea whether they are male or female I missed that disclousure ( my guess male) but certainly they have acted in manner that causes problems not solves them. And as suggested the 30 or so supporters MS8 claims shows what? That you have 30 people that see the world the same as you?

Just how with all this support did this Board get elected? Guess not everyone is in agreement, there is another side.

From the information presented and my inability to believe everything posted due to its source, I have no idea where the truth lies in this matter. What I do know is that MS8 has shown a side of themselves that I would have trouble dealing with. Their last post indicated some level of resentment to those who see things differently and diasagree with their actions.

As Grandma used to say "You might have to consider the possibility that you are part of the problem."

MS8, you did not come here asking for advice, that is pretty evident now.

At least not advice regarding the actual initial post on this thread.

You seem to have a plethora of issues, and, while those appear they may well be more of an issue, you have chosen, instead, to concentrate on the bogus issue of the board opening the pool to paid entrance for residents in a nearby development.

And then you get all sarcastic and snarky when you are called out on your own improper actions regarding that issue.

I agree with Jon in many aspects on this thread. And we usually aren't in agreement on much.

For one thing, not one person here told you it was "vindictive" to ask for meeting minutes.

To go beyond your authority and contact the insurance company, and other such entities, with the little (and apparently incorrect) information you have is the vindictive part.

You showed them, didn't you?

The response from here is never to shut up and sit down. And I can't think of a single regular poster who would advise that.

However, you clearly don't like the answer you do get when you get them, so instead, your response is to belittle, undermine, harass and apparently manufacture or change facts to suit the situation.

Fine. Seriously. What DID you expect from this forum?

Because we did tell you that your pool, if it's insured for any use it's insured for paid users. We did tell you that your board very likely, based on the information you provided us from your docs that you were willing to share, is able to open the user base up to paid users, and we did inform you that doing so would not impact your tax status.

Fibbing to us to get the answer you want doesn't help anyone.

Best of luck to you and your alleged "30" like-minded individuals.