CAI finally admits to being a business 501(c)6 trade organization

CAI finally admits to being a business trade tax-exempt organization.

Community Associations Institute (CAI) is a national nonprofit 501(c)(6) organization founded in 1973 to foster competent, responsive community associations through research, training and education. […] We work to identify and meet the evolving needs of the professionals and volunteers who serve associations, by being a trusted forum for the collaborative exchange of knowledge and information, and by helping our members learn, achieve and excel.[1]

In my 17 years as a HOA reform activist this is a landmark first!  This is a personal achievement.  There was very little support from other reform advocates and homeowners regarding misrepresentation by CAI.[2]  As a result of my repeated criticisms and exposes, CAI had to apparently fess up.

Over its 44 years in existence CAI has mislead its viewers, members, the public and legislators as to its legal tax-exempt status. It news releases, websites, Common Ground magazine, communications with state and federal elected officials, and court filings that refer to representing homeowners and HOAs.[3] CAI is not allowed to have HOAs as members![4]  Example, CAI’s current web page reads,

CAI provides information, education and resources to the homeowner volunteers who govern communities and the professionals who support them. CAI members include association board members and other homeowner leaders, community managers, association management firms and other professionals who provide products and services to associations.

CAI serves community associations and homeowners . . ..[5]

CAI cutely sidesteps this criticism using legal “word games,” parsing sentences and the meaning of words.  In my view, CAI will use the First Amendment right protecting the freedom to associate and so HOA directors are free to join the vendor trade organization.  However, by using their CAI vendors, lawyers and managers, to educate them as to what is good and right for their community and HOAs in general, directors are placing themselves in a conflict of interest violations.

CAI even to urges HOAs to support legislation harmful to the membership.  Please understand that CAI is legally protected by leaving the decision to become a CAI member up to the HOA board and individual director.

It is the director who holds the bag as to conflict of interest and loyalty violations of state laws and the governing documents.[6]  In whose best interest is he functioning? CAI’s view of authoritarian, un-American de facto governments, or the HOA members?  It is unconscionable and laughable that HOA boards would become CAI members!

The reason for doing so, in my experience, is a direct fault of the HOA legal scheme: Boards of directors are incompetent, grossly negligent, and do not wish to run the HOA or educate themselves, aside from being indoctrinated by CAI seminars. Some are competent and are not CAI members.   Others by far are rogue boards who freely get away with violating the laws and governing documents, because there are no civil monetary penalties to deter such illegal activities.

In short, CAI as a business trade organization is legally bound to promote the interests of its members, the lawyers and managers.   What is the business interest of a nonprofit HOA or its individual directors? The purpose of CAI as a business trade organization is not to support the consumers of its products and services, the HOA consumers.

References

[1] About Community Associations Institute (CAI).

[2] Misrepresentation: CAI comes with unclean hands.  Contains multiple quotes by CAI HQ and state chapters evidencing this misrepresentation.

[3] See Complaint filed with NJ Supreme Court for CAI lack of “candor to the tribunal” as an example of a CAI court filing.

[4] HOAS no longer accepted for CAI membership.

[5] About CAI (Jan. 14, 2017).

[6] Traitors and turncoats: HOA directors as CAI members

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Published in: on January 15, 2017 at 6:01 pm  Comments (5)  

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5 CommentsLeave a comment

  1. Well, well, well! The Jan. 13 news release by marketwired.com, from which the 501(c)6 quote was taken, has now become a Jan. 17th release by Petproductnews.com without the 501(c)6 wording. I see this as a response to this post of the13th and an intentional cover up designed to mislead the public once again.

  2. […] my Commentary of Jan. 15th, CAI finally admits to being a business 501(c)6 trade organization, the demands/requirements of state Senator D. Farnsworth for sponsoring HOA reform legislation came […]

  3. How much money does CAI make? How much money do the people or lobbyists that work for CAI make? Do homeowners understand that when they hire a CAI management company they are in bed with the CAI attorneys and CAI vendors whose goals are to profit from the homeowners. CAI stands for Community Association Institute but it seems not to be working in the interest of homeowners but in the interest of their members who charge the communities for every service and whose key goal is to profit. Example, a CAI management company recommends a CAI attorney who if you look at HOA cases against homeowners are supported by large insurance companies. One of the biggest one is Carpenter Hazelwood — a CAI member — then look into how many times does this company sponsor the CAI management companies in such treats as golf events … then look into the CAI vendors and look into their sponsoring treats for the CAI management companies — so they are all in bed together and who ends up ultimately paying for their bills — the homeowner. I suggest that if homeowners want to save money, do NOT hire a management company, an HOA attorney or vendor that is affiliated with the CAI. Furthermore, the IRS should audit every CAI member and look at their expenses.

  4. Although it was apparent 18+ years ago (1998 individual homeowner of CAI…inside the tent) that CAI was a tax-exempt trade organization that largely benefitted its non-homeowner stakeholders (management companies/law firms/financial institutions/insurance companies), to the near exclusion of the individual homeowner stakeholder, CAI/Frank Rathbun worked assiduously to mask CAI’s true identity.

    4506-A:

    Community Associations Institute
    Central Arizona Chapter
    2221 W. Baseline Road, Suite 101
    Tempe, Arizona 85283-1039

    Tax ID No./Employer Notification Number: 86-0386343

    Copy of an exemption application:

    Internal Revenue Service
    TE/GE Correspondence Unit
    P.O.Box 2508, Room 4024
    Cincinnati, OH 45201
    Fax: (513) 263-3434

    Copy of a return, report or notice:

    Internal Revenue Service
    RAIVS Unit MS: 6716
    Ogden, UT 84201
    Fax: (801) 620-7896

  5. Thank you for posting this but it’s unfortunate that it likely will not reach the people it’s intended for. It’s insulting to me that AZDRE has CAI as a helpful link to Members of HOA’s. My experience has taught me that when/if you write to them for help, they will NOT respond to the HO but they will forward your e’s to the MC or attorneys. Even the National head of CAI will not stop this deplorable act. AZDRE needs to remove the CAI link (and AACM) as being helpful to consumers. CONSUMERS be aware. There are many helpful sites (this being one), I suggest you look elsewhere rather than AACM and CAI.


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