This By-Laws document contains the following information: the name and location of the corporation, the shareholders, and the duties of the officers.
Property Owners Association Bylaws For Nonprofit Organizations In Texas
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It is rare for the IRS to recognize an HOA as a 501(c)(3) organization. While HOAs and condo associations establish themselves as nonprofits, they are not tax-exempt organizations under 501(c)(3). The requirements for 501(c)(3) are very strict. To qualify, an organization must serve a broad public interest.
Texas does require bylaws for all nonprofit corporations that must be adopted at the first organizational meeting of the organization's board of directors. However, the Texas Secretary of State doesn't require nonprofits to file their bylaws with the state.
There must be at least three people on the Board of Directors. If an association's governing documents do not state how many people must serve on the Board of Directors, Texas law says that the number will be equal to the initial number of directors listed in the Articles of Incorporation.
HOAs are non-profits because they are set up to govern and maintain, not make profit. It's important that all HOAs also file to become corporations to protect the Board and Owners from liability. They file their tax returns under IRS Form 1120-H.
The IRS grants this tax exemption to specific groups. The status usually goes to charities, but it can also be obtained by certain religious organizations, nonprofit hospitals, and education groups. A 501(c)(3) can be a nonprofit corporation, but unincorporated associations and trusts can also gain this tax exemption.
A neighborhood association is eligible for nonprofit status if: It is incorporated by the state as a non-profit corporation. It is organized solely for charitable purposes. To apply for non-profit status, you must file IRS Form 1023 seeking tax-exempt status and charitable organization status.
HOA board members in Texas can be sued personally if they engage in negligent, willful misconduct, bad faith, fraud, criminal activity or actions beyond their board authority.
Eligibility. In general, Texas law does not contain any specific requirements for someone to be eligible to serve on the Board of Directors. A director doesn't even have to be a member of the organization. However, many property owners' associations create their own eligibility requirements in the governing documents.
Disclosure Requirements Disclosure is mandated by law, often through public records and real property records. Before purchasing a home, buyers must receive a set of documents detailing the HOA's health, such as its covenants, conditions, restrictions, bylaws, rules, and financial statements.