Should businesses be in newsletter?

Started by RobertG • 21 replies • 3030 views

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RobertG (Arizona)
Posts: 505

Posted:

I am looking for arguments for or against the idea of putting local businesses in the HOA newsletter. The HOA has a policy of no paid advertisements. However, there is an idea that highlighting local owned businesses would be good. For example, in the body of the newsletter this would be inserted -

"In our Community…
Need a Handyman? xxxx is a reliable, family owned business. Contact Pat at 800.555.1212 for basic home to dos, landscaping concerns, painting, and more. Mention our HOA and get a free one-time estimate on your projects.
Its that time of year again when insects, scorpions and other pests starts appearing. For help with all kinds of critters from pigeons and gophers, etc. to scorpions, crickets, ants, spiders and more call your neighborhood critter guy at xxxx-800.555.1212."

Some think this promotes local business. Others say it singles out only the people who the newsletter editor choose to highlight. Others say that putting it in the middle of the newsletter creates a level of liability to the HOA since the HOA is endorsing these businesses over others.

What do you think?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Robert,

I don't believe this is a good idea. IMO, this would definitely qualify as "promoting" only those businesses that are mentioned. Who makes the determination as to what businesses are mentioned? If my HOA were to run an ad for all the local businesses our newsletter would be the size of a telephone book, albeit a small one! I see nothing wrong with paid ads. Why does your HOA have a policy against this? It sure does cut down on the cost of producing the newsletter.

JohnO6 (Georgia)
Posts: 424

Posted:

I tend to agree with Mary on this one. The HOA Newsletter should reflect the "official" opinion +/- communications of the association and as such, highlighting business(es) seems to reflect an HOA "endorsement".

Why not allow paid advertising?

As for opinions from the HOA members on local area businesses, we have a Board in our website's discussion forum for this purpose.

RobertG (Arizona)
Posts: 505

Posted:

There was a long discussion about paid ads. There were pros and cons. I don't remember the debate but I know some of it had to do with the ratio of ad space to newsletter space. Also, someone would have to go beat the bushes to get the ads (no one was willing). The primary reason was that since our local government will pay for a small newsletter 4 times per year, why not go the free route and have 100% of the space with less headache.

RobertG (Arizona)
Posts: 505

Posted:

Quote:

Posted By MaryA1 on 07/07/2009 7:22 AM
Robert,

I don't believe this is a good idea. IMO, this would definitely qualify as "promoting" only those businesses that are mentioned. Who makes the determination as to what businesses are mentioned? If my HOA were to run an ad for all the local businesses our newsletter would be the size of a telephone book, albeit a small one! I see nothing wrong with paid ads. Why does your HOA have a policy against this? It sure does cut down on the cost of producing the newsletter.

Those in favor made the comment that anyone could ask to have their business put in. However, no one was ever told of that nor was there any effort to make that known.

RobertG (Arizona)
Posts: 505

Posted:

Quote:

Posted By JohnO6 on 07/07/2009 7:28 AM
I tend to agree with Mary on this one. The HOA Newsletter should reflect the "official" opinion +/- communications of the association and as such, highlighting business(es) seems to reflect an HOA "endorsement".

Why not allow paid advertising?

As for opinions from the HOA members on local area businesses, we have a Board in our website's discussion forum for this purpose.

I forgot to mention that the newsletter editor (who changes frequently) was the one that picked the business. Even though there was no collusion, one of the ads happens to be for a company that is a family business of a board member.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Robert,

As I said, I don't think it's a good idea. And my opinion is reinforced by your statement that the policy was never mentioned to the members at large; only a select few knew of it.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Perhaps split the difference - accept plugs from Members who have used the vendor and can positively recommend them based on personal experience?

KirkW1 (Texas)
Posts: 1,665

Posted:

I personally don't have an issue with ads. If done right they will help pay for the newsletter. The trick is that you should expand the newsletter if you get more ads. (Or you limit the number of ads sold.) But I wouldn't go beating the bushes for the ads. Instead mention it in one newsletter giving members a chance to purchase an ad.

RobertG (Arizona)
Posts: 505

Posted:

Quote:

Posted By KirkW1 on 07/07/2009 5:48 PM
I personally don't have an issue with ads. If done right they will help pay for the newsletter. The trick is that you should expand the newsletter if you get more ads. (Or you limit the number of ads sold.) But I wouldn't go beating the bushes for the ads. Instead mention it in one newsletter giving members a chance to purchase an ad.

The point is that these are not paid ads. They are just comments by the HOA newsletter on where to get a service. The newsletter does not cost anything to put out except someone time.

hoatalk (California)
Posts: 603

Posted:

As soon as you take money for an ad, you are in the advertising business and your HOA is most likely a corporation, so a couple of observations:

(1) Corporations can't defend themselves in court (since they are not real people) so if sued, you must hire an attorney, even for a small claims action that costs the plaintiff next to nothing to file. (Consider the cost)

(2) Ask your insurance agent if your insurance covers the HOA for liability in an advertising business. Unless you bought special business insurance already, I guess it won't. Also, will your D&O be voided by engaging in business activity outside your charter?

(3) How much money will you really make in this and is it worth the extra hassle, risk and costs?

I'm not saying to do it or not and of course this is not legal or professional advice. Just things to consider...

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JamesC (Maryland)
Posts: 282

Posted:

Like others have stated on this talk forum, we do not advertise a business in our newsletter. (Associations should stay away from endorsements)
However! on our web site we have a section set aside where we make it clear, we do not recommend, and the Association in no way endorses a particular business, however homeowners may tell other homeowners, if they had a good or bad experience with any of the businesses they have dealt with.
Something like a referral, or warning to stay away from:
There are some businesses that will take advantage of a homeowner, but at the same time, there are some who are deserving of a recommedation.

Jim

RobertG (Arizona)
Posts: 505

Posted:

Quote:

Posted By hoatalk on 07/07/2009 6:08 PM
As soon as you take money for an ad, you are in the advertising business and your HOA is most likely a corporation, so a couple of observations:

(1) Corporations can't defend themselves in court (since they are not real people) so if sued, you must hire an attorney, even for a small claims action that costs the plaintiff next to nothing to file. (Consider the cost)

(2) Ask your insurance agent if your insurance covers the HOA for liability in an advertising business. Unless you bought special business insurance already, I guess it won't. Also, will your D&O be voided by engaging in business activity outside your charter?

(3) How much money will you really make in this and is it worth the extra hassle, risk and costs?

I'm not saying to do it or not and of course this is not legal or professional advice. Just things to consider...

Actually in Arizona a lawyer cannot be used in small claims court even for a corporation (if I read the statutes correctly).

MicheleD (Kentucky)
Posts: 4,491

Posted:

::Should businesses be in the newsletter?::

No.

Neither paid nor unpaid.

Now, if homeowners have businesses they want to promote, you could have a "free promotion" section for the HOMEOWNERS to list their companies or such.

But when the editorial board of the newsletter decides who (non-HOA connected) goes in, it can lead to all sorts of potential issues.

Not the least of which being, "What kind of kick-back are you getting for posting XYZ Business here and not ZYX?"

Even if you say "none" the credibility is already gone.

And if nothing else, the newsletter needs to at least make an appearance of credibility.

GrahamM (Florida)
Posts: 3

Posted:

Quote:

All very good points to be considered. I live in a fairly new community and I am the editor of our small newsletter. Currently, we do offer paid advertising to local businesses in order to offset the cost of production. Advertising is very limited... at most 5 ads per issue. Each ad is business card size. As we are such a small and new community, saving any money helps. Right now the newsletter is completely self supporting and no one seems to have an issue with it. However, as we are about to elect our new BODs, I will be certain to bring up these points of concern to their attention.

Thanks!

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Just an observation.

If an association has a Newsletter or Website and it costs the association x amount of $. I would think any money collected to cover the cost of this endeavor/s would not be a problem, just don't make the cost high enough to be profit.
Surely a legal disclaimer could be inserted that the listing of any business in the Newsletter does not indicate approval/diapproval.

What constitutes News in a Newsletter. Certainly just management publishing whatever is not news necessarily. Would you put in an add for a car and expect the association to warrant the car any more than you would the local newspaper. How about making the sellers prove their grandmothers rocker was once used by Robert E Lee.

My opinion..........much to do about nothing. Just don't shot yourselve in the foot.

MikeS1
Posts: 521

Posted:

Bad idea. Most any HOA attorney would agree. Ours did.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Mike,
Please define Newsletter that most any HOA lawyer will advise against posting advertizing as part of the content?

If it is Correspondence put out by the BOD as official notification of Board business , maybe so. If it is a community Newspaper type Newsletter, would the same apply. How about putting ads in an association phone book, assembled by volunteers working in the HOA office.

The last two items mentioned seemed to have slipped by our legal council for the past twenty years.

Of course we could be wrong, have any legal justification?

MikeS1
Posts: 521

Posted:

Robert -- I'm not going to argue with you on this. You have your opinion and that's fine. When you place a blurb in the newsletter as referenced by the OP, the HOA is basically endorsing the vendor. Later when the work isn't done properly, this can come back to haunt the HOA.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Mike,

I agree, the example Robert gave could very easily be construed as a recommendation of the assn to use that particular service provider. I would certainly not promote doing this. However, I would see nothing wrong with placing paid business card ads in the newsletter. The board could also print a disclaimer stating they are not endorsing any business being advertised.

SandyS3 (Colorado)
Posts: 4

Posted:

I don't believe there is anything wrong with attaching copies of business cards/ads to the news letters, although I think research would need to be done to avoid any liability, as well as safeguards put in place to ensure no favoritism. Placing the publication(s) as a seperate attachment at the end of the news letter and possibly using a title such as "The BOD would like to thank the following vendors. Their monetary contributions help pay for our news letters which in turn help keep assocation costs to a minimum." Then at the bottom of the publication, a disclaimer could be included stating "These are paid advertisements and do not constite an endorsement of services by the Board of Directors" Advertising is all around us. Businesses and non profits do this all the time. It is a good way to keep expenses down.

RickW (Illinois)
Posts: 169

Posted:

Quote:

Posted By SandyS3 on 08/22/2009 10:06 AM
I don't believe there is anything wrong with attaching copies of business cards/ads to the news letters, although I think research would need to be done to avoid any liability, as well as safeguards put in place to ensure no favoritism. Placing the publication(s) as a seperate attachment at the end of the news letter and possibly using a title such as "The BOD would like to thank the following vendors. Their monetary contributions help pay for our news letters which in turn help keep assocation costs to a minimum." Then at the bottom of the publication, a disclaimer could be included stating "These are paid advertisements and do not constite an endorsement of services by the Board of Directors" Advertising is all around us. Businesses and non profits do this all the time. It is a good way to keep expenses down.

I've been following this thread. We are about to launch our own website and I have been giving thought to advertisements as a way to cover the yearly hosting and site maintenace costs. Sandy, I like your solution. I plan on having our legal look at this and getting their opinion.

Rick

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