HOAleader.com - Tip of the Week - February 16, 2018
Published: Fri, 02/16/18
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Pay Your HOA Assessments Early and Save! (Or Not)
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All kinds of businesses offer their customers discounts. Why not your nonprofit community association?
In this week's tip, we answer an HOAleader.com reader's question, which is essentially: For 45 years, we've been offering our members a 5 percent discount for paying their total annual dues in full in January. Now a lawyer is calling foul. Are we doing something wrong?
Our experts agree with the reader's attorney. This reader's association should stop offering this discount, for many reasons.
"I don't think that's the right question—whether associations can do this," contends Robert E. Ducharme, founder of Ducharme Law in Stratham, N.H., who specializes in representing community associations. "I tell people: Never discount. You're a nonprofit. You set up a budget, you divide it by ownership interests, and then divide that by 12 months—and you're done. Otherwise, you're by definition creating a shortfall every year.
"Also, it's nice this board wants to offer a discount, but now there are tax implications," adds Ducharme. "That discount is imputed income to owners, and that has to be on the association's income tax return but also the owners' because they got a benefit other owners didn't get. If you have 1,000 units and 500 take advantage of that discount, that's a lot of money, and there are tax implications."
The discrimination concern is real, too. "I noted the reader's mention of a discrimination claim," states David C. Swedelson, the principal at Swedelson & Gottlieb, a law firm that represents associations in the Los Angeles area. "Yes, that's a potential risk. I could see someone saying, 'That's discriminatory toward me because you're not offering this to me in a way I could afford it'. I'm troubled by that."
Check out the real problem behind this practice, and how our reader's association may be able to achieve its goals in a better manner, in our new article:
https://www.hoaleader.com/members/3680.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Why You Shouldn't Offer Discounts on Condo or HOA Assessment Payments
An HOAleader.com reader asks, "Our 79-member HOA has been in existence since 1972. We have always offered a 5 percent discount for pre-paying the entire annual dues if paid before March 1 of each year. Approximately 46 percent of members take advantage of the offer and pre-pay the entire year upfront, rather than monthly.
Click here to read full article:
https://www.hoaleader.com/members/Why-You-Shouldnt-Offer-Discounts-on-Condo-or-HOA-Assessment-Payments.cfm
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Be Nice! It's Key to Keeping Your HOA's Volunteers Happy
We're helping you give credit where it's due in this week's tip. An important part of successful management of your condo or HOA is encouraging and thanking volunteers for their work, but also politely offering feedback if their work isn't what you need.
Click here to read full article:
https://www.hoaleader.com/public/Be-Nice-Its-Key-Keeping-Your-HOAs-Volunteers-Happy.cfm
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How You May be Pushing Away Your HOA's Volunteers
An important part of successful management of your condo or HOA is encouraging and thanking volunteers for their work, but also politely offering feedback if their work isn't what you need.
Click here to read full article:
https://www.hoaleader.com/members/How-You-May-be-Pushing-Away-Your-HOAs-Volunteers.cfm
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How Not to Throw New Condo/HOA Board Members to the Wolves
In this week's tip, we lead you to a deep reservoir of information on how to get your new board members up to speed quickly and effectively.
Click here to read full article:
https://www.hoaleader.com/public/How-Not-Throw-New-CondoHOA-Board-Members-Wolves.cfm
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How to Train Your Condo or HOA's Newest Board Members The good news is that new blood on your board nearly always means fresh ideas and stretched thinking.
Click here to read full article:
https://www.hoaleader.com/members/How-Train-Your-Condo-or-HOAs-Newest-Board-Members.cfm
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