Using Title 10 Non Profit to disenfranchise home owners
Is there any legislation related to planned communities in the works to close the title 10 non-profit loophole/scheme. My HOA (one of the biggest) has separate title 10 non-profit called Community Council that has a board that is not elected by homeowners, but by its existing board. It derives its primary operational funding from mandatory transfer fees tied to our property. It operates independently without accountability due to this design.
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Huck,
I would love to drive such an effort, but I’m afraid it would be futile. Your recorded declaration creates the non-profit corporation to govern the association. The issue really is that these communities are incorporated for organizational convenience and tax advantages only, and bear no true relationship to any other non-profit corporation. These are communities first and need to be governed by laws that recognize these communities as mini-governments. I had legislation introduced this past session in SB-1659 to address some of these issues, but it died unceremoniously, mostly because it was introduced by a Democrat.
Please send me your CC&Rs for both organizations along with your bylaws, and I’ll see if there is any way I can help you. Use the AZHOAtruth@gmail.com account.
Dennis
You asked an interesting question. Based on your description, your community appears to have a separate Title 10 nonprofit corporation that operates alongside the HOA. Wickenburg Ranch also has multiple legal entities with different governance structures. If you’re comfortable sharing the name of your community or its governing documents, I’d be interested in comparing the structures. Understanding whether these arrangements are becoming more common could be helpful for both homeowners and legislators.