ValerieS2 (Michigan)
Posts: 244
Posts: 244
Posted:
I heard that some HOA's board members are exempt from dues - is this possibly true?
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Are HOA Boards supposed to be "volunteer"?
Started by ValerieS2 • 8 replies • 2582 views
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SusanW1 (Michigan)
Posts: 5,202
Posts: 5,202
Posted:
The HOA would be set up as a non profit corporation All Members are assessed dues so that the HOA can care for common areas, among other things. Board members are Members who volunteer to carry out the mission of the corporation, stated in your CCRs. They are not paid or compensated in any way to sit on the board.
A management company, hired by the board, is paid to handle the day to day affairs of the HOA.
Michigan has a condo law. Google Michigan non profit condo law" and see what comes up.
But your ARE going to get that lawyer, aren't you . . . . ??
A management company, hired by the board, is paid to handle the day to day affairs of the HOA.
Michigan has a condo law. Google Michigan non profit condo law" and see what comes up.
But your ARE going to get that lawyer, aren't you . . . . ??
SusanW1 (Michigan)
Posts: 5,202
Posts: 5,202
Posted:
http://www.meisner-law.com/mi_condo_act_reference_chart.htm
BrianB (California)
Posts: 2,820
Posts: 2,820
Posted:
they should not be exempt from dues/assessments. Some boards can be paid a renumeration or salary, if the HOA regs allow it. Many (most?) don't allow such a renumeration. If one is allowed, the HOA should charge ALL members their assessments and collect them, and then they should pay their board as determined in a separate process. And, of course, remember to file properly with the IRS for paying said salary every year, as required.
If the HOA simply exempts the dues, the books get muddled, and the board looks unprofessional, and the HOA could be setting themselves up for trouble, internally or with the IRS.
If the HOA simply exempts the dues, the books get muddled, and the board looks unprofessional, and the HOA could be setting themselves up for trouble, internally or with the IRS.
SteveM9 (Massachusetts)
Posts: 3,699
Posts: 3,699
Posted:
Quote:
Posted By ValerieS2 on 01/21/2011 1:33 PM
I heard that some HOA's board members are exempt from dues - is this possibly true?
I heard that some HOA's board members are exempt from dues - is this possibly true?
Ahhh... this is the worst case scenario.
If the HOA exempted some people for paying dues, years down the road there will be a new president. They will notice these people were exempted, but your hoa docs require everyone to pay dues. So all these people that were exempt will now owe all back dues, plus what ever penalties there are for back dues. Chaa-ching $$$$ Yep, its happened before. The people who were provided the free dues were not happy. Legally they had no recourse.
If your HOA wants to do this type of thing the legal way, they people need to pay all dues, then the HOA can cut them a check back as a consultant.
SusanW1 (Michigan)
Posts: 5,202
Posts: 5,202
Posted:
If board members are requesting a waiver, tell them the HOA will submit a 1099 to them for the value.
That usually changes their mind.
That usually changes their mind.
ValerieS2 (Michigan)
Posts: 244
Posts: 244
Posted:
Thank you for the replies. Our HOA is not even in place yet, but the developer is supposedly turning it over to the homeowners in March. A coworkers condominium board is exempt from dues for their "trouble". It didn't sound right and I was hoping it was not common practice...
RobW (California)
Posts: 279
Posts: 279
Posted:
In California, Association members may not receive compensation, including a waiver of Association fees, for serving as directors. They may be reimbursed for reasonable expenses incurred in the performance of their duties, but that's it. An Association may hire non-members to serve in Board positions, unless prohibited in the Association's governing documents; however, paid directors are not protected by Civil Code that would otherwise protect volunteers.
I haven't read the Michigan statues on this, but I'm guessing this is pretty common across the U.S.
Rob
I haven't read the Michigan statues on this, but I'm guessing this is pretty common across the U.S.
Rob
Quote:
Posted By BrianB on 01/21/2011 3:22 PM
they should not be exempt from dues/assessments. Some boards can be paid a renumeration or salary, if the HOA regs allow it. Many (most?) don't allow such a renumeration. If one is allowed, the HOA should charge ALL members their assessments and collect them, and then they should pay their board as determined in a separate process. And, of course, remember to file properly with the IRS for paying said salary every year, as required.
If the HOA simply exempts the dues, the books get muddled, and the board looks unprofessional, and the HOA could be setting themselves up for trouble, internally or with the IRS.
they should not be exempt from dues/assessments. Some boards can be paid a renumeration or salary, if the HOA regs allow it. Many (most?) don't allow such a renumeration. If one is allowed, the HOA should charge ALL members their assessments and collect them, and then they should pay their board as determined in a separate process. And, of course, remember to file properly with the IRS for paying said salary every year, as required.
If the HOA simply exempts the dues, the books get muddled, and the board looks unprofessional, and the HOA could be setting themselves up for trouble, internally or with the IRS.
DeeS1 (Michigan)
Posts: 223
Posts: 223
Posted:
Most governing documents require that "Directors shall serve without compensation." Is your co-worker on the board? I've found that many homeowners in our small community, for some reason, also think that we (the BOD) do not pay dues. I think it's often just an assumption that people make, but not actual the case. Although I wish it were true :-)
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