How should our HOA board handle a church, club or nonprofit that asks to use the clubhouse?

By OurHOA · General information · Revised October 20, 2026

How an HOA board answers a church, club or nonprofit that wants the clubhouse: owner-sponsor rules, fair housing, insurance, taxes and ADA exposure.

Part of the HOA board handbook: residents and communication.

The short answer

Write the rule before the next request arrives, and apply it to every group the same way. For most small associations the cleanest policy is that the clubhouse belongs to owners, residents and their guests, and an outside group may use it only when a resident in good standing books the room, signs the agreement and stays for the whole event. Some boards go further and allow no outside groups at all. Either rule works. What fails is deciding each request by whether the board likes the group, because that is how an association ends up explaining to a fair housing investigator why the book club got a yes and the prayer group got a no. Opening the room to the public on a standing basis also changes the association's tax return and can bring the room under the Americans with Disabilities Act, so treat a weekly outside booking as a policy decision, not a favor. Rules vary by state and by your governing documents. This guide is general education, not legal advice.

Sort the request before you answer it

The requests sound alike and are not. A church plant wants Sunday mornings for a year. A yoga instructor wants to teach a paid class. Three residents want a Bible study on Wednesday nights. Put each one in one of two buckets. The first is residents using the room for their own gathering, which is the use the clubhouse exists for, and where fair housing law requires equal treatment. The second is an outside organization using the room as its venue, which is a rental to someone who is not a member. A paid class run by an outsider belongs in the second bucket even when residents attend, and most declarations treat it as business use. If you have no rental policy yet, our guide on how to write an HOA clubhouse rental policy covers fees, deposits, hours and alcohol. This guide covers the outside-group questions that policy leaves open.

Residents' own gatherings: treat religion like any other subject

The federal Fair Housing Act makes it unlawful to discriminate in the provision of services or facilities connected with a dwelling because of religion (42 U.S.C. 3604(b)). HUD's rule lists limiting the use of privileges, services or facilities associated with a dwelling because of religion as a prohibited practice (24 CFR 100.65(b)(4)). The Justice Department's pamphlet on religious freedom gives the example of a meeting room open to residents for card games and social events, where a resident is told she cannot hold a Bible study with friends, and says that may violate the Act. So if residents can book the room for a book club, they can book it for a prayer group on the same terms. Write rules about size, hours, noise, cleanup and fees, never about the subject of the meeting. HUD also makes a housing provider liable for failing to take prompt action against discrimination by a third party when it knew and had the power to stop it (24 CFR 100.7(a)(1)(iii)). If other residents heckle that prayer group or tear down its sign-up sheet, the board has to act. State law adds to this in places. Florida requires that common areas and recreational facilities be available to owners and their invited guests for their intended use, allows reasonable rules, and bars unreasonably restricting an owner's right to peaceably assemble or to invite public officers and candidates to speak there (720.304(1)). Texas Property Code 202.018 and Colorado 38-33.3-106.5(1)(c.5) protect religious displays at an owner's own home, not use of the clubhouse, so in those states the declaration, your rules and federal law decide it.

Outside organizations: the owner-sponsor rule

Most boards that allow outside groups at all use a sponsor rule. The booking must come from an owner in good standing, or a tenant with the owner's written permission. The sponsor signs the rental agreement, is present from setup to lockup, and answers for damage and for the group's conduct. Then cap the calendar so one group cannot quietly take over the room. A common set of limits: no more than two dates a month for any one sponsor, bookings no more than 90 days ahead, and recurring outside bookings yield to an owner's event with 30 days' notice. Charge outside-group bookings the same fee and deposit as any owner event, or a higher published rate for all outside groups, but never a special price for the group the board president attends. Bar admission charges and sales by every group, not by some. If the board would say yes to a Scout troop under these rules, it has to say yes to a church, a mosque, a Democratic club and a Republican club under the same ones. If that prospect makes the board uneasy, the honest answer is to close the room to outside groups entirely and say so in the policy.

Insurance, keys and the room

Require any organization, as opposed to a resident hosting friends, to give the association a certificate of liability insurance naming the association as an additional insured before the first date. Ask your insurance agent what limit to require, and tell the carrier in writing if outside groups use the room on a regular schedule, because some policies assume the room serves residents only. Have both the sponsor and an officer of the organization sign the agreement. Never hand an outside group a permanent key. Use a fob or door code that works only during the booked hours, and change it if a group leaves. Do not let a group store chairs, sound equipment or supplies in the clubhouse between dates, which turns a booking into something that looks like a lease. Post the occupant load from the fire marshal and put the number in the agreement. A group that draws 80 people to a room rated for 49 is the association's problem the moment someone calls the fire department.

Taxes and the ADA

Two rules give a board good reasons to keep the room for members. First, taxes. An association that files Form 1120-H can exclude exempt function income, which the IRS instructions say must come from members as owners, not as customers. The same instructions list payments from nonmembers, and payments from members for special use of facilities apart from the use available to all members, as income that does not qualify. Rent from an outside group is taxable income to the association. The treasurer should record it in its own income account and tell whoever prepares the return. Second, the Americans with Disabilities Act. The Justice Department's Title III manual says Title III does not cover strictly residential facilities, but areas that qualify as places of public accommodation are covered if their use is not limited exclusively to owners, residents and their guests (III-1.2000). Its example of a room outside Title III is a condominium party room limited to owners, residents and guests that the association will not rent to local businesses and community groups. The manual does not draw the line for an association that rents to outside groups some of the time, so ask the association's attorney before approving standing outside rentals, especially if the clubhouse has steps at the entrance or restrooms that a wheelchair cannot use.

Wording you can copy

Policy clause: 'The clubhouse is reserved for owners, residents and their guests. An outside organization may use the clubhouse only when an owner in good standing, or a resident with the owner's written authorization, signs the rental agreement and attends the entire event. No sponsor may reserve more than two dates per calendar month or more than 90 days in advance. Organizations must provide a certificate of liability insurance naming the association as additional insured. Admission charges and sales are not permitted. The board applies these rules without regard to the purpose or viewpoint of any group.' Reply to a request with no sponsor: 'Thank you for asking. Under the association's clubhouse policy, the room is available to outside organizations only when a resident sponsors and attends the event. If a resident would like to sponsor your group, they can book through the usual reservation process, and we are happy to send them the rental agreement.' Motion: 'Moved to adopt the Clubhouse Outside Group Policy dated [date], effective [date], and to apply it to all reservations made after that date.' Check your declaration and bylaws for the adoption and notice steps they require; our guide on how to adopt a new HOA rule and notify owners walks through them.

Mistakes boards make

Saying yes to the church a director attends and no to the next one that asks. Waiving the fee for a favored nonprofit without a vote in an open meeting. Writing in the minutes that a request was denied because of what the group believes, which turns a routine scheduling call into evidence. Handing a weekly group its own key and finding, two years later, that it treats the clubhouse as its building. Depositing outside rent in the operating account with no note to the treasurer, then filing a return that leaves it out. Letting the sponsor rule slide for groups that seem harmless and enforcing it for groups that draw complaints. Review the booking log once a year, and if one sponsor fills most of the calendar, fix the cap. Our guide on whether an HOA can stop a Bible study or club meeting in your home covers the owner-side questions about gatherings at home.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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