Can the HOA president get paid?

I have a second question today.

Our president is also accountant and property manager. She charges (through the business she has) the association over $700.00 a month for her service. Is that allowed?

Thanks ;)

My apologies .

The law was changed and my link was old.

The law now says:

The Florida HOA statute provides:

COMPENSATION PROHIBITED.—A director, officer, or committee member of the association may not directly receive any salary or compensation from the association for the performance of duties as a director, officer, or committee member and may not in any other way benefit financially from service to the association. This subsection does not preclude:

(a)Participation by such person in a financial benefit accruing to all or a significant number of members as a result of actions lawfully taken by the board or a committee of which he or she is a member, including, but not limited to, routine maintenance, repair, or replacement of community assets.

(b)Reimbursement for out-of-pocket expenses incurred by such person on behalf of the association, subject to approval in accordance with procedures established by the association’s governing documents or, in the absence of such procedures, in accordance with an approval process established by the board.

(c)Any recovery of insurance proceeds derived from a policy of insurance maintained by the association for the benefit of its members.

(d)Any fee or compensation authorized in the governing documents.

(e)Any fee or compensation authorized in advance by a vote of a majority of the voting interests voting in person or by proxy at a meeting of the members.

(f)A developer or its representative from serving as a director, officer, or committee member of the association and benefiting financially from service to the association.

However the other services you mentioned are typically not those of a BOD director and would be allowed compensation.

Never mind I found it, thank you Peter.

Karla, is your prez. an owner in your association? I reason I ask is because it may be an example of a huge "conflict of interest". Example of "conflict of interest":

"Conflict of interest arises whenever the personal or professional interests of a board member are potentially at odds with the best interests of the nonprofit. Such conflicts are common: A board member performs professional services for an organization, or proposes that a relative or friend be considered for a staff position. Such transactions are perfectly acceptable if they benefit the organization and if the board made the decisions in an objective and informed manner. Even if they do not meet these standards, such transactions are usually not illegal – except for private foundations. They are, however, vulnerable to legal challenges and public misunderstanding."

So, in a nutshell---if they're an owner; a board member; AND getting paid for "doing stuff" for the association they leave themselves open for much scrutiny. I certainly wouldn't do it....or as a board member allow it. Our documents specifically prohibit ANY board member to receive ANY compensation for ANYTHING they do while they're on the Board. Period. That person should do ONE thing or the OTHER....but not both. I'm sorry....but it makes them look "suspect"...and as a homeowner and a board member they should realize that and resign ONE of their duties. IMHO.

I see as the President owns a company that does accounting work. It is NOT the President that is getting paid but their company that they own. The company deserves to get paid for the work it does. I don't think the President is getting paid for the position they hold in the HOA. It's just the company they hired to do the books happens to be owned by them.

My suggestion: Maybe taking up some alternate bids for another contractor to do the bookkeeping. No reason why there shouldn't be some competition for the accounting company. Our Treasurer was our accountant. She lived and owned a house in the HOA. So she was a member of the HOA but also owned the accounting firm we used. Later she sold her home but remained our accounting firm. It worked good for us as she never got paid or skipped paying any HOA dues for her position. We just chose to use her company to do our work.

This is in my view an unacceptable conflict of interest. We do not even let fully qualified residents bid on jobs, nor do we as officers get paid or seek reimbursement for our time. There need to be firewalls, and if your Board and management are one and the same, you are really exposed as a community. This should be addressed immediately, but be sure to build your support and coalition in the community before acting. And as you have begun to do here, make sure you know the rules thoroughly. Good luck!

Meliss,

but reading 720.303(12) it clearly states that no officer or director should have any financial benefit through any compensation for their duties or through paying a vendor who rendered services to the association. Thanks to Peter for finding that in the FL Statutes.

So is she having a financial benefit when her company is getting paid? I would say yes.

Karl,

Why not save the money and just make a complaint to the license bureau?

Karl,

The board and officers of the association are responsible for hiring various vendors, including a CAM and a bookkeeper. There is an inherent conflict of interest whenever someone with fiduciary duties to others puts himself in the position of being both boss and employee or buyer and seller or consumer and vendor or payer and payee.

This situation has some sinister overtones because the president is in a position where she can approve payments to herself and cook the books to cover up any unauthorized payments. I am not making an accusation that there is any wrong-doing, only that there is a blatant opportunity for it to occur.

The resolution to this is to offer her a choice between serving as an unpaid president or as a paid CAM and bookkeeper. If she objects to having to make a choice, you can choose to make her neither president nor vendor.

Where is the rest of the board? Why are they allowing this to occur? Do they realize that they may be breaching their own fiduciary duties to the members in allowing the President to receive association funds as a vendor?