What better occasion than the impending holidays to enjoy a community wide party. After all, is it not one of the essences of sound HOA governance to encourage interaction and involvement, instilling a sense of belonging and community spirit? Holiday festivities organized by community associations may be as simple as an informal pot-luck dinner or an elaborate parade and home decorating contest.
But, should the HOA pay for the event, perhaps from excess funds? As long as all owners are invited and the event itself is not somehow exclusive, such as one based on a particular religious holiday, there should be no problem provided the appropriate funds are available.
It is quite feasible that a significant number of the owners would not attend, either by choice or by being out of town, and therefore might take issue over surplus funds being used for a party. Also, does the expense of a party qualify as legitimate HOA business? An argument could be made that community welfare benefits by greater participation and socialization.
Should the HOA wish to consider a holiday festivity, the following tips might help in its success:
- Review your governing documents to be sure an association sponsored social event is permitted.
- Plan well in advance and create a budget line item that would include such festivities. Call it a miscellaneous, contingency or social category, but create a list of uses for which the money may be allocated.
- Keep the costs down to avoid challenges of wasting HOA funds. Perhaps solicit donations from attendees, either in money, food, gifts, or prizes.
- Appoint a social committee to organize the festivity. The committee should have a clear mission and charter.
- Spark competition amongst the owners with contests and prizes, for attendees (costume contest) and absentees (home decorating contest).
- Verify that the HOA’s insurance will cover any potential liability as a result of the HOA hosted party, especially if alcohol is involved, regardless of who provides it.
- Consider planning the event at a more convenient time for greater owner participation. After an annual meeting may be a better time for socializing and when more of the absentee owners are in town.
It is the season of festivity and frivolity, but with a cautionary sense of HOA frugality.
Posted: December 14, 2010