With cooler weather hopefully on the way and vacations wrapping up, many communities may be planning end of summer social events and outdoor gatherings. While these sort of events can be a fun way to build fellowship in a community, it is important for association boards to know and understand their rights and obligations when planning social functions. In particular, boards must be careful to ensure that they are using association funds appropriately.

The particular uses that may be made of common funds raised through owner assessments are spelled out in governing documents and the Ohio Revised Code. For condominiums, O.R.C. 5311.081(B)(11)(c) provides that association boards may only impose and collect fees for social activities “[t]o the extent provided in the declaration or bylaws”. The HOA statute does not include this provision, but O.R.C. 5312.02(B)(9) requires the declaration or bylaws of a planned community to specify “[t]he common expenses for which assessments may be made…” It is important; therefore, that any community association ensure that they are authorized by their governing documents to use common assessment funds for social functions before they do so.

If the governing documents of your community do not include this authorization, that does not necessarily mean that you have to miss out on the fun. If the members of your community support the use of common funds for social functions, you can work with our office to formally amend your governing documents to provide the necessary authority. The restrictions on the use of common funds are also generally limited to funds that are raised through assessments the owners are required to pay. If your association raises funds from other sources, such as through clubhouse rental fees, it may be possible to use those funds for social functions. Boards should always check with the association’s counsel before using any association funds for purposes not expressly authorized by the declaration and bylaws though to ensure that the use is appropriate and will not subject the association to liability.

If your association has questions or concerns about the use of association funds to sponsor social functions for residents, please contact Williams & Strohm, LLC at 614-228-0207 and speak with one of our attorneys.