NY_NJ_Resident
Junior Member
What is the name of your state? New Jersey
I live in a community (not really a homeowners association, but it's run as such) of fee-simple private detached homes with community property and community roads. We pay an annual fee for maintenance of roads, community property and infrastructure. We are a 501(c) corporation ... the feds look at us as non-profit and NJ considers us a for-profit corp. Every member of the community also holds one share of stock in the corp.
The current board is trying to establish a second corporation (in addition to our existing corporation) (a new non-profit) for the purposes of maintaining the roads and community property. Our current corp fees already pay for exactly what the board is now trying to establish. The board also has suggested creating a 3rd corporation as well ... a foundation ... for the purpose of selling common land within the community so we do not have to pay taxes when we sell the open lots. They have said they will remove 50% of the assets of the current corp and transfer those assets into the new non-profit corp and make members pay half of their annual dues to this new corp.
Is this legal? Can we be forced to become members of these new corporations when we are already members of the existing corp? Our bylaws state that anyone who lives in our community must belong to the existing corporation. A lawyer told the community that any change to our corp status MUST be approved by 100% of the membership because we hold shares in the corp. Our board is now saying they only need 51% approval of the community to make this happen.
Any guidance will be appreciated.
I live in a community (not really a homeowners association, but it's run as such) of fee-simple private detached homes with community property and community roads. We pay an annual fee for maintenance of roads, community property and infrastructure. We are a 501(c) corporation ... the feds look at us as non-profit and NJ considers us a for-profit corp. Every member of the community also holds one share of stock in the corp.
The current board is trying to establish a second corporation (in addition to our existing corporation) (a new non-profit) for the purposes of maintaining the roads and community property. Our current corp fees already pay for exactly what the board is now trying to establish. The board also has suggested creating a 3rd corporation as well ... a foundation ... for the purpose of selling common land within the community so we do not have to pay taxes when we sell the open lots. They have said they will remove 50% of the assets of the current corp and transfer those assets into the new non-profit corp and make members pay half of their annual dues to this new corp.
Is this legal? Can we be forced to become members of these new corporations when we are already members of the existing corp? Our bylaws state that anyone who lives in our community must belong to the existing corporation. A lawyer told the community that any change to our corp status MUST be approved by 100% of the membership because we hold shares in the corp. Our board is now saying they only need 51% approval of the community to make this happen.
Any guidance will be appreciated.