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Is it Proper to Use Condo Fees for Charitable Contributions?

Periodically, we have been asked to render advice regarding appropriate expenditures of condominium association funds. As part of an annual budget, a condominium council may seek to budget for a contribution to a local community charity. Because the funds of the condominium council come from assessments made to the unit owners, one or more unit owners may object to the council spending common funds for charitable purposes. For the reasons described below, we have generally advised association boards that they should not use funds collected from owners for charitable purposes.
Under the Maryland Condominium Act (Real Property Article, §11-101, et seq.) (the “Act”), the Council of Unit Owners is authorized to assess unit owners for common expenses of the condominium. The purpose of assessments is to provide funds for the payment of current common expenses and for the creation of reserves for the payment of future common expenses. See §11-110(b) of the Act. Common expenses are those costs for maintenance, repair, and improvement of common elements of the condominium, as well as costs of administration of the condominium. The Act provides a number of powers to the council of unit owners; however, the 22 specifically enumerated powers set forth in §11-109(d) of the Act do not include the authority to assess unit owners for purposes of making charitable contributions. Although by-laws of a condominium council frequently provide details for the process of adopting a budget for assessments, we have never seen a by-law provision that would purport to explicitly grant the council the right to collect assessments to fund charitable contributions.
Although no Maryland case directly deals with the issue of whether a condominium council has authority to enact a budget for charitable contributions, consultants in this field generally advise boards that they do not have authority to make expenditures for charitable contributions, and consultants suggest that any such charitable contributions be separately solicited from members. (See, e.g., R. White, Charitable Donations Are Laudable, But Condo Board Must Follow Statutes (January 22, 2011) (http://www.tcpalm.com/news/2011/jan/22/richard-white-charitable-donations-are-laudable/, [last visited September 26, 2013]).
Accordingly, we generally advise condominium councils not to budget for or make expenditures for charitable contributions from council funds. We suggest that any charitable contributions be solicited from members separately from mandatory assessments.
For questions about this, please contact Bill Shaughnessy at (410) 576-4092.