Condo Self Management....?

3 Part Q.-Thanks!

A. If a Condo Association forms a management company to purchase homes within their condo community, from homeowners, to upgrade, resale and forward proceeds to Reserve Account, can a member of that Board or Board members be the company? And would these initial funds, if needed, solely have to be drawn from a Reserved Account, or an Association Loan, thus leaving the initial budget alone for standard expenses. And is any of this subject to Community vote?

B. Can those board members, if agreeing to be partners of above company, take profit, providing no Association funds are being used? Or will it still be considered a conflict of interest?

C. Providing that it isn't a conflict of interest and working independently, would it still be subject to vote or is it a board decision (or individual) if agreeing to joint partnership with provision of donating a percentage to Reserve Fund?

Jewel

http://jgaynor.qhealthzone.com

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O My God .... You are about 2 inches from stepping over a cliff.

Other than the following answer, be incredibly cautious about accepting any answer you see here. I don't care if you select mine as best answer; you're on the verge of doing something incredibly wrong.

I am a condominium and home owners association attorney. There is no way anyone can give you a correct answer on this site. First, it depends upon what the condominium statutes in your state specifically allow your association to do. Second, your Declaration of Condominium and the By-Laws will further limit your actions. No one here has that information, and unless you plan to post about 100 pages or more of documents on this site, no one can know what to specifically tell you.

Finally, your condo association is almost certainly a not-for-profit corporation. What you are proposing could easily be considered a for-profit enterprise under the tax code, thus stripping the association of it's tax-free status and making the unit owners' dues taxable.

There are SO MANY WAYS this could go terribly wrong. Before anything is done, the condo board should contact an attorney who practices association law in your state. I cannot recommend that action enough!

I totally agree with McMufin. Do not even attempt this. There are red flags everywhere. I know of an association who attempted to do the same thing you are asking and what a mess.

Please follow McMufins advice............He's an Attorney ................Listen very carefully to what he is telling you