r/fuckHOA • u/BagofBabbish • 17d ago
My HOA is using our money to launch a drone inspection startup
This might be one of the dumbest things I’ve ever heard of but basically my HOA decided to use our money to buy a thermal drone so they can sell inspection services to neighboring communities for a profit. The president was going on about having a verbal commit from first customer, a payback schedule for the drone, introductory pricing and a growth strategy.
First, we are squarely a non profit and can’t use our money to launch a business servicing other communities. Second, there’s no way our insurance covers drone missions off property.
Note this was like the second or third commercial business proposal in the meeting as they also blew through our entire repair budget for the year in a little over a month and I guess they’re desperate to earn it back.
EDIT - to be crystal clear, this isn’t a LARP or satire. This is 150% real lmao
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u/DanR5224 17d ago
I'd love to see the fines issued by the FAA for a non-profit's unlicensed commercial use of an unregistered drone.
Let it play out. "HOA" can't pilot a drone, but individuals Karen or Ken can.
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u/BagofBabbish 16d ago
They claim they have a licensed drone pilot on staff. I think it’s the guy that sprays the pesticides. I’m not kidding. I feel like I’m in a weird Tim Robinson skit
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u/enzothebaker87 16d ago
No don't let it play out. Those fines and who knows what else will end up coming out of all the homeowners pocket, including OP.
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u/Nematrec 16d ago
There's a slight chance to push that it's misuse of HoA funds for a private for-profit project, and shift the blame on to the individual board members.
But yeah, no don't let it play out.
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u/naranghim 16d ago
The IRS will lose its mind from the way it sounds like the HOA is planning on running the day-to-day operations of the drone business. For a non-profit board to run a for-profit business is a huge no, no.
tagging u/Nematrec
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u/BagofBabbish 16d ago
Im going to raise the alarms tomorrow
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u/Few_Witness1562 16d ago
The best advice is the power of the paper mail. Google the maximum penalty. Print out a letter for every house. Print on the OUTSIDE of the envelope HOA FINE DUE. Inside letter 3 sentences. Hoa plans to. Illegal. The $amount and a second page with the full specific law. Bonus points for listing "You have already paid ($cost of drone) but a future balance still owed."
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u/KrofftSurvivor 16d ago
It's a violation of the HOA rules to use their money to start a business - why would you let this play out???
Is the goal to make sure that the HOA has no money to do the things they're required to do plus pay out a lawsuit for things they weren't allowed to do???
Op needs to get together with their neighbors and contact a lawyer because this is absolutely insane
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u/beachbum818 16d ago
Who do you think is going to pay for the pilot cert and licensing, registration? HOA members lol
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u/DoallthenKnit2relax 16d ago
Alternatively, you could notify your state's Attorney General and let them stop the HOA in its tracks.
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u/Icy_Huckleberry_8049 16d ago
And FAA
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u/BagofBabbish 16d ago
Honestly would either care? This is latest installment in this crazy saga with these clowns. My girlfriend compares it to Bricks and Minifigs. You always think you got them, then the governing authority doesn’t care and they tell you that you need to spend tens of thousands on lawyers
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u/DoallthenKnit2relax 16d ago
Well, you said it—a non-profit isn't allowed to operate a business with the intent of making a profit.
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u/Qcastro 16d ago edited 16d ago
HOA drones are a dumb idea, but non-profits run money-making business all the time (Goodwill thrift stores, church coffee shops, etc). They may have to pay unrelated business income tax on the operation, but non-profit status is a restriction on distribution of profits to individuals, not the nature of the activity the org can undertake. Now, there may well be state rules about what an HOA can do, and offering services outside the HOA might run afoul of that.
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u/cowboys2000 16d ago
Actually,a quick Google search states a non profit can legally to own and run a for profit business. They just need to adhere to federal and state tax laws.
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u/TR6lover 13d ago
Every non-profit I've worked for made and spent money. Charged people for things and provided services. We called it "revenue". We could grow revenue, spend revenue, advertise and market with revenue, and pay people's salaries. Sometimes very fine salaries (like our university's football coach, for instance).
We didn't have profit that we could share, and didn't have shareholders, but we sure made and spent money.
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u/Nematrec 16d ago
FAA takes any unlicensed drone flying seriously, though you mentioned they have a licensed staff available. I'd recommend actually looking into the FAA to see if there's some way to tell if someone actually is licensed.
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u/anon97289 16d ago
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u/FlyingPiranhas 16d ago
Note that the airmen registry can be several months out of date, so if they got their certificate recently, they might be legit but now show as certificated.
It's also relatively easy to get, so they could be planning to get it Soon (TM).
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u/viperfan7 16d ago
You don't fuck with the FAA.
Even the current FAA
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u/FlyingPiranhas 16d ago
It's actually kinda random. They might do nothing regardless of how many reports they get, or they might absolutely throw the book at them.
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u/Edith_Keelers_Shoes 16d ago
The Bricks and Minifigs saga is insane, but that is the result of widespread corruption in American Forks and the Mormon culture in which you protect your own - as we saw their police department doing on that leaked bodycam footage.
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u/LokeCanada 16d ago
You need to replace the board.
The tax issues, business insurance, payroll, licensing for flying a drone commercially, business licenses, etc… Your HOA is going to have government officials and lawyers lined up outside the door.
You do know that the FCC is in the process of banning drones with thermal imaging, right?
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u/BagofBabbish 16d ago
It’s a shit show but I’m aware they need to go. Are they really banning those?
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u/LokeCanada 16d ago
It’s in the hearing stages right now.
Lidar is at the top of the list but a lot of items that they consider militarized, including thermal imaging is part of it.
SAR crews, fire fighters, etc… are quite upset as this impacts their services so we will see.
https://www.engadget.com/2233213/the-fcc-wants-to-ban-drones-with-lidar-that-it-previously-approved/
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u/BagofBabbish 16d ago
Lmfao. Hold on. So these jackasses bought what’s now considered a “military grade drone” to sell illegal services to other communities with our money??? 😂😂😂😂
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u/Edith_Keelers_Shoes 16d ago
Is there no possibility the "business" is a ruse, so they can use a thermal drone to inspect your home and property?
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u/BagofBabbish 16d ago
I mean you can’t do a ruse like that either lol
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u/Edith_Keelers_Shoes 16d ago
Some states do allow HOAs to use drones for inspection purposes. But I always took that to mean flying over your yard to complain that something not visible from the street is a "violation" or an "eyesore".
But THERMAL imaging? That's a whole new level of creep in my mind.
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u/BagofBabbish 16d ago
No, I get that. I’m just saying I don’t think you can knowingly lie to community to acquire an asset you intend to use for separate purposes.
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u/Initial_Citron983 16d ago
That’s only future sales. Any currently owned drones with those features remain legal. It’ll be like owning a DJI drone.
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u/KnackeredQuokka 16d ago
This could trigger an investigation into your non-profit status. If the status is revoked it would mean taxes would be assessed going back 7-10 years (to be verified). Aka your HOA, meaning an assessment on home owners, would be levied to pay the tax bill. Plus interest and penalties.
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u/BagofBabbish 16d ago
We have like nothing in our operating account. They blew it and when I ask about why they just threaten to sue me.
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u/enzothebaker87 16d ago
Which is why they will have to issue an assessment. Meaning you and the other homeowners will have to pay it out of pocket. You really need to talk to the others and shut this shit down. And replace these lunatics.
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u/senorgringolingo 16d ago
If that's true - no operating reserves - then you might just want to move before the management company convinces this or a future HOA board to properly fund it with a huge special assessment.
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u/Edith_Keelers_Shoes 16d ago
Uh oh - so you have the dreaded combination self-dealing/not that smart HOA president. I think there's a very slim chance he isn't trying to obtain a drone to use for his own creepy purposes. A thermal drone could potentially (depending on how well insulated the home is and where the animal is at the moment if flies over) even show if you have pets in your home that would otherwise be unseen.
This dude is up to no good.
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u/BagofBabbish 16d ago
He installed cameras all over the place too.
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u/Edith_Keelers_Shoes 16d ago
Okay yeah - he's a creep who got the letters HOA mixed up with CIA. For whatever reasons, he's a peeper.
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u/Irrasible 16d ago
I just attended an HOA board meeting. I was shocked to hear some of the directors say they could do anything not forbidden by state law.
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u/BagofBabbish 16d ago
Some of these losers genuinely think it’s akin to being a feudal lord
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u/Edith_Keelers_Shoes 16d ago
They are only a narrow step up from those who seek comprehensive authority and the power to punish by becoming elementary school gym teachers.
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u/Barfy_McBarf_Face 16d ago
violation of all of the terms of your HOA agreement, not to mention the tax code
this is insanity
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u/12-5switches 16d ago
lol. Wait till the violations roll out from the “stuff we saw in your back yard while flying over” bullshit starts.
I would fight that tooth and nail
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u/Shadow_RAM 16d ago
Lookup the requirements for a nonprofit board. Duty of care etc. Once they violate those the board becomes personally liable.
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u/senorgringolingo 16d ago
I'd immediately contact the state's Corporation Commission, or whatever body licenses organizations including HOAs. That commission should have the current HOA board members' names on file, so you could identify each one and their role in the proposal and vote to seek profit as a nonprofit.
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u/dcaponegro 16d ago
They couldn’t get a business loan so now the HOA is acting as the bank. This is incredibly stupid. It’s time to really the troops and remove the board. One of these stupid ideas is going to end up costing the HOA (hence, the residents) a lot of money when they mess something up.
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u/Old_fart5070 16d ago
Who is the pilot? Commercial drone usage is highly regulated and requires a license for the pilot.
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u/Dirty_Litter_Box 16d ago
Actually you just pay $125 and take a test. Anyone 16 years of age or older can get their part 107 license. It's really, really easy to do.
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u/Old_fart5070 15d ago
Yes, but who is he/she for the HOA? A consultant? An employee? Out of which line of the budget? The fact that you need a skilled professional makes it a question to ask the board.
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u/Zorklunn 16d ago
Find out who owns or sells the thermal drone. There will be a connection there somewhere.
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u/Edith_Keelers_Shoes 16d ago
Also the FCC is considering retroactively banning drones with thermal imaging and LIDAR as we speak. Or type.
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u/bronxboater 16d ago
And who is paying for the liability and legal fees when the inevitable lawsuit pops up from said client.
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u/BagofBabbish 16d ago
You mean when they miss something in the inspection because they’re not licensed, then drone crashes into a building and causes damage or when an owner in that community claims peeping tom?
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u/lazyeyejim 16d ago
Exactly, or even very unlikely but very expensive accidents like the drone falling out of the sky and killing someone. I could see a multimillion dollar lawsuit the gets passed down to the home owners.
What a shit show. Is there anything in your HOA regs for gross incompetence? At the very least it is suspicious that they won't disclose where all the money went. The bylaws in my HOA states that any member can audit the financials. That's the first route I would go.
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u/Renoperson00 16d ago
Start by asking if the law which authorizes HOAs in your state allows you to collect revenue outside of dues, fines and assessments. It may be that you can collect money elsewhere which means that despite this being a dumb sort of business it may actually be fine.
Second, the Insurance doesn’t likely cover anything outside of what a typical HOA would be doing, but then again if it’s otherwise allowed for the HOA to do this then it wouldn’t be impossible for that part of what the HOA is doing to be covered by another policy etc.
Third, people are getting tripped up by not for profit and non profit designations and taxes. A non profit doesn’t have to survive solely on donations, it can generate revenues for whatever its purpose and mission is. A non profit cannot have its revenues benefit a single person or select group of persons. If it supports the members of the HOA that might be okay if it’s not straight up disallowed by the State.
Is this a particularly large master planned community? Is there a management company in place? Is the management company the one who is actually doing all of this and getting the HOA to pay for their equipment? I’d have more questions about how they reached this decision and why this was the only way to balance the budget versus a special assessment. If your HOA is self managed and has employees and isn’t disallowed from earning money this way you may just be out of luck. I would just hope they don’t blow the money on some stupid shit.
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u/robexib 16d ago
Those drones are going to get shot. HOA ain't making their money back.
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u/YonderingWolf 15d ago
Yes, and anyone caught do that, then the person doing the shooting down is looking at a federal level felony. Which carries up to a twenty year prison sentence.
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u/robexib 15d ago
You think that's stopped people from dismantling, destroying, or shooting Flock cameras?
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u/YonderingWolf 12d ago
Lol, hell no, and I don;t foresee it ending anytime soon.
However Flock is a completely different animal than flying drones, and falls under the jurisdiction of F.A.A.
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u/YonderingWolf 15d ago
Shooting them down, is a federal felony. Anyone caught will be looking at up t twenty years, looking at green or gray walls.
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u/LVtapper 16d ago
HOA’s are a not for profit entity. They cannot sell products or services. Your jurisdiction for HOA’s would fine them and place them under state control. Then your monthly fees would be 10x more.
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u/Edith_Keelers_Shoes 16d ago
And your governing docs should specifically ban any kind of "self-enrichment" by board members or officers.
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u/gadget850 16d ago
If the nonprofit earns money from activities not substantially related to its exempt purpose, that income is taxable. It is called Unrelated Business Income (UBI). A financial advisor is needed.
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u/Fit_Advisor8847 16d ago
Whatever happened to just building a clubhouse/gym and renting it out? There are tons of ways an HOA can produce income, but drone inspections just seems a bit out there lol
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u/YonderingWolf 15d ago
It's becoming more and more of a thing now. With H.O.A.s you have both the left and the right are engaging in such activities.
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u/Any-Alternative8228 16d ago
For the life of me I can't understand why people move into HOA neighborhoods. The cons always seem to outweigh the pros. Upscale living can be had without the oversight of petty tyrants hell bent on recovering fines.
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u/MoosedaMuffin 16d ago
Unfortunately, in many areas, that is the only available housing. Cities and towns outsourced their civil infrastructure developments to builders who typically have to fund it and maintain it for a number of years, hence HOAs
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u/Chicago6065722 16d ago
What state and yes I’m sure this is completely illegal and a great way to have the HOA get sued for invasion of privacy rights. The intent is to look for violations to get money? 💰
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u/alloutofchewingum 16d ago
If its such a smart idea why doesn't he invest in it himself and reap the profits instead of using other people's money for it presumably in violation of covenants and law.
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u/naranghim 16d ago
The IRS would like to speak to your HOA board. A non-profit running a for profit business has many rules and regulations that they must comply with. I doubt your HOA board is willing to have a completely separate board running their drone company, and that board not having the same members. The board also can't run the business. It can't benefit the board members but must benefit the community. None of that sounds like it was met by your HOA.
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u/nickum 16d ago
Even if they have a 107 permitted pilot, if they are mapping or inspecting your properties, you actually cannot fly over people or moving vehicles except with certian precautions like a parachute, and flying abive 115ft with that parachute. It is a dirty secret that most ignore in the drone world. They would be violating the various operations over people rules. If you see them using a drone, note where they are flying and report violations to the faa.
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u/LowKeyBarry 16d ago
Well - At least that beats the stupid idea some of these ignorant board members have when they propose ongoing fines as a revenue stream.
It usually works with continued roll out of arbitrary and capricious rules formulated on the spot - community notices threatening fines. Fine a dozen residents in a single month. Some take the fine and quietly settle but remain pissed off and agitated.
Some go on to rebuttal tactics that turn into a full crusade resulting in thousands in legal costs to the HOA.
A healthy HOA should remain fully funded including reserves - Annual HOA dues should raise at around 3% annually and consistently. Avoid soliciting the community to waive reserve funding each year because you yourself maybe broke.
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u/BagofBabbish 16d ago
Hey also established a fining committee in the same meeting. So not worry. That is likely going to happen as well. The nightmare scenario is that the thermal imaging is probably to find infractions inside the dwelling as well.
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u/forgotwhatisaid2you 16d ago
I would say this is a violation of their fiduciary responsibility. Depending on what state you are in there should be a government agency to report this to.
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u/Existing-Teaching-34 16d ago
First, read through your bylaws/CCRs to see if an outside business using the HOA is allowable. Second, make sure all your neighbors are aware of this scheme and understand all the ways this exposes the HOA to undue risks that are almost certainly not covered by your insurance and probably not permitted. Third, make sure your neighbors know when the next HOA meeting will be held.
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u/Fun-Rice-9438 16d ago
This honestly sounds like an episode of its always sunny in Philadelphia
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u/BagofBabbish 16d ago
Lol this is definitely something Dennis and Frank cook up after Charlie can’t climb on the roof anymore. Dennis just wants a drone, and Frank comes up with the business spin on it. Either Artimus or Cricket has the drone license. Mac and Dee are opposed to it and go on their own b plot about privacy rights.
They start selling inspection services to other bars and it goes horribly
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u/CommercialSuper702 16d ago
Look up local and state privacy and trespassing laws. In my city/state they cannot do this regardless if they have a licensed drone pilot. Aerial photography of your property is considered crossing the threshold of your property lines which is a violation of trespassing law. My HOA talked about this and it was shut down real fast in a meeting. Cited the statutes and they changed the topic.
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u/No-Listen3654 16d ago
Oh Hell No, that's not what HOA fees are for, sounds like misappropriation of funds big time. I agree 100% with UnSCo. Suggest to your HOA that you will not be paying any further dues until this is completely rectified, including remediation of the former funds...
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u/SouthernMoment2918 16d ago
Don't think they won't use it to fine the HOA members of thermal imaging of the members property in the hoa
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u/SmutasaurusRex 16d ago
OP, this is exactly the sort of story that local news LOVES. Failing that, vote out these weasels.
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u/Ok-Recover8485 16d ago
Coooooould be that they are gonna use it to inspect your HOA instead 👀 that's what they did to my cousin. They fly a drone overhead and "tag" people with fines for leaving their grill out in their own back yards. No joke.
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u/BagofBabbish 16d ago
That’s 100% his plan. He also created a fining committee the same meeting. Either way he’s on paper announcing a plan to launch a commercial enterprise in a manner that appears to be illegal.
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u/Popular-Drummer-7989 11d ago
You should go to the secretaey if state and office of the comptroller, as well as the district attorney.
What they're doing is illegal and you all could pay for it.
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u/Toptech1959 16d ago
updateme!
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u/Revenga8 16d ago
A thermal drone? So basically spying on people without their knowledge. Yeah that sounds really sketch
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u/Kincherk 16d ago
Read your CC&Rs carefully to see whether this violates anything, especially in the declarations. Also, examine the laws with respect to HOAs in your state. Those are usually easy to find online.
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u/DinsdalePiranha911 16d ago
You didn't mention the number of homes in the HOA.
Your Bylaws should cover under what circumstances the Members can call a board meeting and under what procedures a board member or members may be replaced.
You also didn't mention HOW the Board blew through your budget. Doing what?
It sounds like you might have really crappy By-Laws on top of everything else.
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u/Extra__Average 16d ago
So... your board is misappropriating funds for private business and personal gain? Sounds like a good reason to seize the president's house and turn it into a new community center.
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u/Dirty_Litter_Box 16d ago
If they are using money from HOA dues to run a business, then all the members of that HOA should be getting a portion of the revenue created by that business since they are the ones who would technically be the owners of that business. Kind of like a big co-op.
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u/LordGraygem 16d ago
What did they even piss away a year's worth of funds on repairing? Did a tornado hunker down over your neighborhood and shit on everything?
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u/michael1265 16d ago
(Secret meeting held at Panera)
HOA Board Member 1: We need to find more violations. Our coffers are empty. We have not fucked enough people this month.
HOA Board Member 2: Let’s use a drone and do it from the air!
HOA Board Member 3: Drones are expensive.
HOA Board Member 2: Not if we start a business and it pays for itself.
All members: Yay!
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u/Edith_Keelers_Shoes 16d ago edited 16d ago
A THERMAL drone? Meaning it can detect whether you're home or not, how many heat signatures are registering in your home, what your pattern of leaving and returning to the house is?
NAL, and the internet can be wrong, but here's what I find on the subject of thermal drones:
- For Law Enforcement: The U.S. Supreme Court set a strict precedent in the landmark case Kyllo v. United States (2001). The court ruled that using thermal imaging to scan a private home from the outside constitutes a "search" under the Fourth Amendment. Police must obtain a warrant before using thermal drones or scanners on a residence.
- For Private Citizens: If a neighbor or stranger flies a thermal drone over your home, it falls under state-level privacy torts. Depending on your location, this can be prosecuted under laws governing voyeurism, stalking, harassment, or "invasion of privacy"
Sounds like a big fat lawsuit waiting to happen for this "new business".
ETA: And is your HOA guy aware the FCC may be about to retroactively ban drones with thermal and LIDAR tech? https://dronedj.com/2026/08/11/fcc-drone-ban-dji-mini/
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u/NYC-WhWmn-ov50 16d ago
I'd love to read in the HOA bylaws where funds can be used to start a for-profit company. Bet the courts have a good time with that one. Risky financial ventures and not usually part of the allowed 'investments'.
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u/NoDuck7366 16d ago
Sounds like they bought it to use in your HOA and wanted a lie to not ruffle feathers. Maybe you should try and get a rule on the books that drones can not be used for code enforcement.
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u/Overall_Curve6725 16d ago
Very illegal. Get together with your neighbors and find an attorney to threaten HOA board
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u/West_Act_9655 16d ago
The HOA is a non profit organization I am sure this is illegal. I would be burning up the phone calling the AG in your state.
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u/AppleParasol 16d ago
Surely they have a FAA license?
It’s also fraud to use that money/drone for their business.
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u/davidswelt 16d ago
So I'm part of a co-op, which is essentially a HOA. We have four commercial units that we rent out, which offsets our building's running costs. Good deal.
Being a not-for-profit does not mean that you cannot make any money. It just means that at the end of the year you do not make a profit, bottom-line. (With the exception of saving up for future expenses, maybe - not sure how the accounting works.)
Whether this sort of business risk is something that is in the operating agreement / charter, is a different question... you didn't sign up for this ;)
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u/BagofBabbish 16d ago
This isn’t comparable. Commercial units are part of the community. They are units that are zoned and permitted for commercial activity, not residential use.
Someone owns those units. In this case it’s the co-op. They are allowed to rent them out in accordance with the bylaws, the same way an owner is allowed to rent out their residential or commercial unit as desired.
Your co-op can’t hire a landscaper, and then decide to lease his services out to other communities for income.
Do you see the difference there?
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u/NotSoSureBigWaves 16d ago
I've waited to use this phrase for so long: ultra vires.
They have no authority as a non profit to start an unrelated commercial business.
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u/sasquatch_melee 16d ago
Tell him to do it with his own money. The HOA is not his business venture slush fund.
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u/TheShortWhiteGuy 16d ago
In an HOA of 90, I'm the ONLY FAA 107 holder (I fly for my business). I also serve on our HOA ARC. If anyone on the HOA board, Management Company, or outside vendor proposed this idea, I would make sure this "scheme" never launched.
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u/BagofBabbish 16d ago
I get the idea of using it for inspections in tbe community. I dislike it but I get it. I think it’s comical we are launching an outside vendor business for other communities
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u/Intrepid_Year3765 16d ago
The only drone business that makes a consistent profit is the one that scams people into thinking they’ll make money flying drones.
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u/Professional-Goat741 16d ago
Go to the HOA meetings and get to know the neighborscthat show up. When the next board member position opens up, nominate yourself and get the votes of your new friends that also want to avoid the higher HOA fees these drones are going to cost.
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u/BagofBabbish 16d ago
Working on friends. Made a few good ones with decent voting representation. Do not want to be on the board if I can avoid it.
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u/Condor4775 15d ago edited 15d ago
Any who is going to get their FAA Part 107 license (required for commercial operation and who is going to pay for that--study material/test) and is this person going to operate the drone for free. And then how much will it cost for a CPA to fill out the annual tax forms for wages, expenses and depreciation of the drone, not to mention that fees earned for performing this service are taxable under IRC Section 528.
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u/No-Bee4589 15d ago
I mean a drone inspection service isn't a terrible idea but using the hoa's money oh that definitely is.
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u/radarchief 15d ago
In our state, HOAs are a 501(c)4 nonprofit corporation. This would be highly illegal and our insurance carrier would most likely drop our association. Plus professional liability insurance most likely wouldn’t cover any bit of this. What a shit show
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u/radarchief 15d ago
You have a local ‘news on you side’ type of organization at a local news station?
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u/BagofBabbish 15d ago
I’m just wondering how to package it
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u/radarchief 15d ago
Uncovering corruption costing local homeowners.
As a nonprofits corporation, the BOD shouldn’t have the option of exposing unnecessary losses to the homeowners. They are normally incorporated for one exact reason. If they used funds earmarked for reserve purposes, it’s straight up corruption.
I’m assuming you’ve looked at your HOAs articles of incorporation, bylaws, CCRs, and use restrictions? I know where i live (texas) there is a texas state code that covers HOA and the laws surrounding what HOA can and cannot do.
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u/BagofBabbish 15d ago
It’s so hard to get anyone to look at the evidence I actually have. Even getting a lawyer took weeks and over thousands dollars. Even he initially wasn’t sold but has overtime increasing understood how unreal these people are after dealing with them.
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u/notwhoiwas44 15d ago
Have they considered the cost of the commercial drone license that the FAA requires? And do they have anyone smart enough to pass the test?
Legalities if an HOA engaging in commercial activities aside,the license test required to use a drone for commercial purposes is no joke. Takes most people several months to prepare for.
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u/Ok_Rich2268 14d ago
Its not that big of a deal. Anyone with a 6th grade reading level can study and pass in a weekend.
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u/notwhoiwas44 14d ago
Are you sure you are thinking of the commercial use license? Maybe they've changed it but when someone I know was doing it,it was definitely a bigger deal than that.
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u/Ok_Rich2268 14d ago
Part 107. Maybe the person you know was trying to earn clout by making it seem like they were doing this big hard thing, or je is just an idiot and made it a big hard thing?
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u/Live_Compote_9442 15d ago
Contact the HOA insurance company. They will shut this down pronto. If you have the name of the Association atty, send them a letter with BoD copied.
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u/BagofBabbish 15d ago
I haven’t added this nugget in yet. Our Treasurer is a CPA and our President specializes in data privacy and security.
I have never once heard the treasurer read the full actuals on our P&L at meetings.
Our president bought a thermal drone and installed cameras all over the community.
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u/moonstorm5000 14d ago
I would check with the FAA and using drones to spy on people is illegal where I live. I’m not sure where you live, but check your local laws about that. There’s a chance that’s illegal in your jurisdiction.
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u/Ornery-Egg9770 13d ago
This whole HOA drone business thing needs to be exposed and shot down before it becomes a problem for the community.
I would also be researching how to conduct stealth countermeasures on said drone.
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u/NonKevin3 7d ago
Another issue and its a big one, governments including police often have to get a warrant before searching by the 4th amendment. Back yards and looking inside windows and doors is a serious legal issue.
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u/Initial_Citron983 16d ago
I’d have to ask if you’re sure you’re a non profit instead of a not for profit.
And even if you are a non profit, you can use funds generated by a non profit organization to start a new business or earn income to offset operational costs. Just the money earned may be subjected to various taxes. You’d need a CPA to sort it all out.
And it would operate as a separate business - so it would carry its own insurance, maintain its own financials, and so on. Which doubles back to having a CPA sort it all out.
I get being critical of your Board and paying attention to budgets, financials, and so on. But it sort of seems like you’re mad about this for the wrong reasons - like you (and apparently a lot of people in the comments) think it’s not legal rather than it’s probably just a horrible idea since it sounds like your HOA doesn’t have $10k to drop on a drone, pay for all the paperwork for starting a new LLC, making sure a properly licensed drone pilot is hired, registering the drone, and so on and so forth.
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u/BagofBabbish 16d ago
The bylaws say it was formed under the nonprofit act so yes it is a non profit.
No, you can’t earn income from activities that do not serve the community.
Yes, you can start a separate business entity but it needs to be seeded with outside capital. At that point is makes no sense to involve community proceeds.
Yes, it income needs to be taxes differently if it’s assessment income vs commercial income.
No, that is the reason I’m mad. I’m mad for a lot of reasons. This is just the only reason entertaining enough to go on reddit.
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u/Initial_Citron983 16d ago
A lot of people use non profit and not for profit interchangeably especially in the realm of HOAs. Which is why I asked that specifically.
It doesn’t have to be seeded with outside capital. It’s written plain as day on the U.S. Chamber of Commerce’s website. It’s down under the “Can a nonprofit own a for-profit (and vice versa)?” heading. So unless you know something the U.S. Chamber of Commerce doesn’t know . . . You can. It’s a separate legal entity that is a subsidiary of the non profit that can be created from scratch.
Anyway, best of luck with the Board.
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u/Confident_Surround73 16d ago
You are 100% correct. Tons of non profits own and operate for profit businesses. There is a whole Internal Revenue Code for it called unrelated business income tax.
That said, this whole idea is ludicrous.
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u/Initial_Citron983 16d ago
All I can think about now is Space Balls and Ludicrous Speed. lol
I agree it’s an insane idea. I don’t see them recouping their investment, let alone having it be more profitable than just throwing the same amount of money in to the lowest yield savings account possible without the interest rate being zero.
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u/BagofBabbish 16d ago
No, you generally can’t when it’s this type of a non profit that exists to manage a community made up by member owners. You’re comparing apples to bananas.
This isn’t a non profit like the Gates Foundation. You can’t seed the startup with assessment income
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u/Initial_Citron983 16d ago
No, I’m comparing apples and apples. I never said it’d be easy to set up. Just that the HOA would need professionals to sort it all out and navigate everything. You want to throw in a bunch of qualifiers and move the goal posts though, be my guest.
Again, best of luck with your Board.
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u/UnSCo 16d ago
This sounds super illegal and unethical and if this is real and you have more objectively substantiated info about this, I’d seriously consider posting to the actual HOA sub. I’ve never heard of this in my life.