Re: HOA acting as distributor
From: Sharon Villines (sharonsharonvillines.com)
Date: Sat, 18 Dec 2004 14:05:37 -0800 (PST)

On Dec 18, 2004, at 4:41 PM, <normangauss [at] charter.net> wrote:

Sharon:

    If the HOA contracts with an outside firm to have all the private
"Separate Interest" residential HVAC systems serviced, it is acting as a wholesale buyer who then distributes on a retail level. If no profit is
made on the deal, then it is a non-profit enterprise.

No profit is made and in addition it is in the associations interests to do the group buying because it lowers the cost of commonhouse maintenance and ensures that individual units are being maintained properly which could conceivable affect all homeowners units in some way. We have a geothermal ground-source system and attached units. If one were to "blow' water all over hades or somehow block circulation in a shared loop, it could affect others.

In our case, the contract was to deliver Cable-TV and Internet for 5-years to only people who were willing to pay for it. The financial obligations of
the entire HOA were burdened as well as its credit record because of a
buyers club venture. This is where I do not feel comfortable and so far
have been unable to get definitive answers.

I would vote the wine club out for sure. I would be surprised if the Cable-TV company would sign such a contract. Basically they are signing a contract with the HOA for a variable payment depending on how many households want the service at any particular time. They can't expect a stable subscription rate for 5 years. So the HOA is certainly taking responsibility and thus all members are assuming the responsibility. Unless there is direct benefit to all homeowners I can't see why the HOA would do this.

We have a community with a few people (distinct minority) who are anti TV and some who don't want cable in their homes. We did get an agreement to have satellite TV in the commonhouse in 3 locations but we haven't found a cable company that will sign a group contract. We want to pay for service to the whole complex (everyone was wired on construction) regardless of who uses it or doesn't. Those who want to do this are willing to cover for those who won't. But this would definitely be a HOA agreement, not just the 35 households that might want it. Everyone has to agree to be liable in the end.


I don't know of any legal advice sought out before the signing of this
contract.  The entire community consensed such an arrangement over a
week-end. So I remain a doubting Thomas.

If the community consensed, then they are responsible, and you as a homeowner are part of this agreement. I'm not a lawyer but that is in accordance with everything I've read on HOAs from the CAI and other sources.

Sharon
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Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org


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