http://condolawguru.com/2010/01/157/ Condo Law & HOA Law for Boards & Owners Thu, 03 May 2012 06:34:02 +0000 hourly 1 http://wordpress.org/?v=3.2 http://condolawguru.com/2010/01/157/comment-page-1/#comment-443 Beth Grimm Sat, 06 Feb 2010 06:10:08 +0000 http://condolawguru.com/?p=157#comment-443 The Davis Stirling Act does not have any stated limits on investments. Limits on income may be pertinent through the tax codes. A California homeowners association that is incorporated normally qualifies as a nonprofit corporation (in California most are nonprofit mutual benefit corporations) and the nonprofit status rests on the fact that the bulk of the assessments collected are for maintenance purposes. If the association has too much income over and above that needed for maintenance and administration, the nonprofit status of the HOA or Condo Association can be jeopardized. In other words, if the association becomes a "profitable" venture, it may lose its nonprofit status and the tax benefits that go along with that. I can't see that interest on investments would normally rise to the level of being a threat to the nonprofit status, but since I do not know any more details, I have to stick to generalities. And since I'm not a tax lawyer, I am not going to quote percentages or requirements in the Tax Code. The Davis Stirling Act does not have any stated limits on investments. Limits on income may be pertinent through the tax codes. A California homeowners association that is incorporated normally qualifies as a nonprofit corporation (in California most are nonprofit mutual benefit corporations) and the nonprofit status rests on the fact that the bulk of the assessments collected are for maintenance purposes. If the association has too much income over and above that needed for maintenance and administration, the nonprofit status of the HOA or Condo Association can be jeopardized. In other words, if the association becomes a “profitable” venture, it may lose its nonprofit status and the tax benefits that go along with that. I can’t see that interest on investments would normally rise to the level of being a threat to the nonprofit status, but since I do not know any more details, I have to stick to generalities. And since I’m not a tax lawyer, I am not going to quote percentages or requirements in the Tax Code.

]]> http://condolawguru.com/2010/01/157/comment-page-1/#comment-442 Judy Tanka Thu, 04 Feb 2010 05:45:07 +0000 http://condolawguru.com/?p=157#comment-442 Does California law limit how much investment income an HOA can generate? Does California law limit how much investment income an HOA can generate?

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