Adams Stirling PLC


QUESTION: Our board is considering renting our common area for film shoots. We have done this twice in the past with disastrous results of massive intrusion and abuse of our lovely pools and clubhouse, and cars and trucks and food preparation and consumption. We own 1/240th of the common areas. We are nonprofit also! Does the board have the right to rent it out without a majority vote?

ANSWER: Just because an association is nonprofit does not mean it is prohibited from receiving income from sources other than assessments. The most common non-assessment income for HOAs is from interest on reserves, clubhouse rentals, laundry machines, etc. That means an association can derive income from filming in the common areas.

Board Decision. Although you own a portion of the common areas, the membership's authority over the common area is quite limited. Your duly elected representatives (your board of directors) oversee the common areas. As such they have authority to rent them out if they believe doing so benefits the association. The challenge is balancing the net after-tax income against the inconvenience of a film shoot.

Film Agreement. I've learned from past film projects involving movies, TV shows and commercials that they take longer than the company claims and the film crews (and their hoards of support staff) trample everything in sight. As a result, I prepare "Film Agreements" to protect my clients from the negligence that seems to surround some (but not all) production companies.

RECOMMENDATION: Associations that allow filming should have legal counsel prepare an agreement to address filming dates and times, protection of the association's name and image, potential damage and injuries, hold harmless and indemnity provisions, and insurance. If done properly, filming can produce significant income for the association with only moderate inconvenience. If done improperly, filming can be a major headache.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC