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Loren, Lawyer
Category: Real Estate Law
Satisfied Customers: 34057
Experience:  30 years of real estate practice experience.
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I live in a Townhome Association consisting of 50 units in

Customer Question

I live in a Townhome Association consisting of 50 units in NW, Indiana. Our 3-member board has offered Association funds to those members wanting tree removal ----- based on Article X, Section 5 of Articles of Incorporation ------ i.e, in part states: "No Private Benefit" -----No money or property received or held by corp shall EVER inure, directly or indirectly to the private benefit of any member, director or officer of the corp or any person whomsoever except for reasonable compensation for services rendered." Can the Board legally go forward with paying for half of the tree removal fee with association funds?
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Loren replied 2 years ago.
Thank you for using JustAnswer. I am Loren, a licensed attorney, and I will do whatever I can to answer your question.
Are the trees on common areas or private property?
Thank you.
Customer: replied 2 years ago.

The trees are on private property.

Expert:  Loren replied 2 years ago.
Then the board would be prohibited from spending association funds on such a project unless there is some sort of benefit to the association, such as halting a beetle infestation.
Customer: replied 2 years ago.

The crabapple trees on private & common area property have been treated for apple scab for the last 7 years with noticeable improvement each year, members "don't like" the mess the trees produce after flowering. Can the board go ahead & spend Association funds for those members wanting to take the trees down under this circumstance?

Expert:  Loren replied 2 years ago.
The association would need to be able to show that the benefit to the association was the primary reason for the expenditure. If they can not then it is prohibited.
Expert:  Loren replied 2 years ago.
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