SOCIAL EVENTS USING HOA MONEY

SOCIAL EVENTS USING HOA MONEY

QUESTION: Can the board use association funds for social events? Our CC&Rs are silent on the subject.

ANSWER: Unless governing documents specifically prohibit it, HOAs can budget for, assess and spend association monies on social events. 

Generic Language. More often than not, there is generic language in governing documents allowing associations to make decisions for the "general health, welfare, comfort and safety" of the membership. A variation is: "The Association may undertake any lawful activity, function or service for the benefit of Owners." Authorizing language is often found in the preamble of the CC&Rs, in addition to the general powers section, and in the assessments section describing the purpose of assessments. It can also be found in the bylaws and articles of incorporation.
Social Event Benefits. Do social events fall under "health, welfare and safety" categories? I believe they do. Part of being a community is knowing your neighbors, interacting with them and developing a positive community identity. Social events help make that happen. Knowing your neighbors also enhances general security for the association. Finally, developing a reputation for a positive community identity raises property values.

RECOMMENDATION: As in all things, moderation. Boards should not go overboard with extravagant parties. HOAs should also be careful about alcohol at their events and check into insurance. Then get everyone together and have steak and beer or cheese and wine, depending on your political persuasion.