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Subject: Property Owners Association

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DonaldD3
(Indiana)

Posts:1

12/22/2007 5:11 PM
Our organization is incorporated as a Not-For-Profit Incorporation. Some claim that is not the same as a Non-Profit Incorporation. Is there a real difference? Also is there a difference in a HOA and a POA? I can find nothing in Indiana Codes that address a POA. Any help?

SusanW1
(Michigan)

Posts:5202

12/22/2007 7:26 PM
Your corporation is filed with the State as a corporation and the IRS gave you the designation as a non-profit corporation, (some call it a not-for-profit corporation) You are NOT a charitable, 501c3 non-profit, like the Salvation Army, which takes in donations from the public. You should have Articles of Incorporation and an IRS Designation letter in your files, along with the bylaws, convenants, an official list of members and Board of Directores, and any other governing documents. This stays in the care of the secretary, in a binder.

RogerB
(Colorado)

Posts:4686

12/22/2007 8:19 PM
Donald, you are a not-for-profit corporation which means you are not eligible for a tax exemption. Non-Profit corporations such as churches are tax exempt. Some states differentiate between a POA property owners association and a HOA homeowners association. One example is a HOA which is voluntary. it has no manditory assessment against the property. Whereas, it is my understanding that in some states such as CO, a manditory assessment HOA would be similar to what might be referred to as a POA in GA.

DonN
(Michigan)

Posts:357

12/23/2007 9:25 AM
There is an excellent discussion of non-profit and not-for-profit corporations (merely different names) in Wikipedia at . It includes links to many related questions. A tax exempt classification is a separate issue and is governed by IRS rules. See the lead post by the IRS on Social Welfare Organizations at . It contains a link to IRS 501(c)(4) tax exempt organizations. Under some conditions, an owners association may qualify, as the IRS paper describes. The IRS 501(c)(4) paper contains a section on Homeowners’ and Tenants’ Associations.

Don Nordeen Governance of Property Owners Associations

DonN
(Michigan)

Posts:357

12/23/2007 9:26 AM
Posted again. The HOA Talk software didn't post the internet links. There is an excellent discussion of non-profit and not-for-profit corporations (merely different names) in Wikipedia at http://en.wikipedia.org/wiki/Non-profit_organization. It includes links to many related questions. A tax exempt classification is a separate issue and is governed by IRS rules. See the lead post by the IRS on Social Welfare Organizations at http://www.irs.gov/charities/nonprofits/article/0,,id=96178,00.html. It contains a link to IRS (c) (4) tax exempt organizations. Under some conditions, an owners association may qualify.

Don Nordeen Governance of Property Owners Associations

RaymondC
(Minnesota)

Posts:64

12/23/2007 4:13 PM
Non profit corporations are not permitted to make a profit or retain any but a small amount of contingincy funds. The rest must be invested in the operation or growth of the corporation or is subject to high tax rates. If they are tax exempt, the profit can end that status. Not for profit corporations are not intending to make a profit, but may find themselves in a situation where they actually do, and they are not subject to the same huge tax rates. They can retain significant sums (think reserve fund) for possible future expenses or other uses. They generally pay taxes on their profits. It's more complex than that, but in a nutshell that's a view of it. Both of these are in contrast to an ordinary corporation whose primary purpose is to make a profit, and then is subject to taxes on that profit.

GloriaM
(North Carolina)

Posts:829

12/24/2007 7:52 AM
Donald: Also make sure you file an 1120-H for the corporation, not an 1120. It makes a great deal of difference with the IRS.

NatashaW
(Tennessee)

Posts:1

12/28/2007 6:43 AM
Good Morning to all, I am currently new to this forum and would really appreicate anyone whom can help me get a firm hand on this Home Owners Association Laws and By Laws. I am currently in the middle of developing ground in Tennessee, and Would like to create a postive enforcement on this new community, but in the other hand, I do not want them to be to strict but they have to be enforced. I have read several different types and aspects on laws and by-laws and being a gated community, I want our community members to feel safe in their enviroments and live in a clean up todate subdivision. If any suggestions or pointers in the right directions would be greatful.....Thanks

hoatalk

Posts:538

12/28/2007 7:39 AM
Posted By NatashaW on 12/28/2007 6:43 AM Good Morning to all, I am currently new to this forum and would really appreicate anyone whom can help me get a firm hand on this Home Owners Association Laws and By Laws. I am currently in the middle of developing ground in Tennessee, and Would like to create a postive enforcement on this new community, but in the other hand, I do not want them to be to strict but they have to be enforced. I have read several different types and aspects on laws and by-laws and being a gated community, I want our community members to feel safe in their enviroments and live in a clean up todate subdivision. If any suggestions or pointers in the right directions would be greatful.....Thanks Please post a new topic for this and you will get better answers. When you post you will need to be more specific as well. Your question is very general and the answer would fill many books. Start by visiting caionline.org or buying the book of our sponsor, Dr. Gloria Martinez. You can see the book by clicking Service Directory on our menu and then clicking on Faith Management Services. Thank you.

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DonnaS
(Tennessee)

Posts:5671

12/28/2007 3:39 PM
Natasha, I own a property in Tennessee. After much research including calls to the Attorney General and the State Board of Real Estate monitoring, I found out that the State of Tennessee does not have any regulations on HOA's. There are some for condo and mobile homes, but none on HOA's. The Developers draft their own sets of documents and I must say that the set I have is rather good. But there are some chinks in the armor, basically that the Developers are in total control without any State interference so anyone coming up or over, better read them thar Docs first. I am very interested in getting some State involvement and protection so anyone interested in Tenn, please let me know. Being in Florida with volumnes of Statutes, I am shocked that there are states without laws and interest in getting some started might be fun??? Maybe not!

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