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KarenE (Florida)
Posts: 5
Posted:
I live in Florida, and one of the members of our board is being paid a monthly fee for services. I understand that this is illegal?
This has been going on for years, does the money have to be paid back? What can I do about this?
LindaL (Colorado)
Posts: 58
Posted:
I live in California and it's illegal. See an Attorney.
Linda
hoatalk (California)
Posts: 603
Posted:
Board compensation has been a big topic of discussion here. Have a look at the following two topics for a start:

Use the search box at the top right of the main forum page and search to find these topics:

"Dues for Board Members?"
"Amendment of Articles of Incorporation"

These two topics get into board compensation.

Best Regards,
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EdR (Texas)
Posts: 170
Posted:
I live in Texas and it's illegal. In fact, if a board member is being compensated for anything to do with board work, the insurance for the board or the association will not cover them in case of a claim, either, because they are then an employee or contractor and not a volunteer. Check with your insurance company about this too. It's simple though--if they want to be paid for their work, they can get off the board.
EdR
RogerB (Colorado)
Posts: 5,067
Posted:
KarenE, it may or may not be illegal for a board member to be paid a monthly fee. It is illegal to be paid for service as a board member. However, if they are hired as an independent contractor by the board to preform a service, such as accounting, it can be legal. However, there should be competative sealed bids to reduce the appearance of conflict of interest. Also, there should be a contract and insurance required if deemed necessary for the job being performed.

RogerB
LuciusD
Posts: 139
Posted:
Roger,
FWIW: I recently inquired of a competent attorney whether there is anything in Colorado other than our particular Bylaws to prohibit board member compensation. In other words, can we amend Bylaws to permit board member compensation.
The answer I got was it's rare, but not illegal.
DonnaS (Tennessee)
Posts: 5,671
Posted:

Linda,
I too live in Floria. What is the Board member getting paid for?. It is illegal for a Board member to be compensated from community funds.
AudreyB (Florida)
Posts: 104
Posted:
Karen,

Ask a Real Estate Attorney who is familar with real estate law, to explain to you Florida Statue 617.0505 that says no in short, compensation for board members.

In the first place, I would expect that since a portion of your dues paid this person, and since it was illegal to pay a Board member. In the second place, the legal and proper thing to do is to get the money that belongs to your Association back where it belongs in the second place, or take that person along with the entire Board of Director's to mandatory mediation to get the money back, in the third place. In the third place, if they refuse to do so after the mediation, then you can take the Board of Director's to civil court to get this person to return the money that belongs to your Association. In Florida, the end result is law is the law, and the Judge has no choice but
to follow the the law.

Our entire Board felt they could change our bylaws to compensate themselves, and boy where they wrong. The are now rushing to rescind their amendment to our articles of incorporation. Now, since our Association Attorney has spoken that compensating themselves does not comply with the Florida Statues, the Board feels they have an option to my opinion to return the money. I have let them know, since our legal attorney has informed them that their amendment does not comply with Florida statues, it is no longer an opinion, it is now a legal fact, and since what they did was illegal, therefore, it makes sense (excuse the pun) that the Board has no choice but to return the money that was paid out. Make sense?

Go after this problem with your Treasurer, and make him/her return the every penny that they received back to your Association. If you are a member of the Board, you might be able to speak with your Association attorney. If not, I would write the Association attorney anyway, and ask, "Since there is this state statue of law, FS617.0505(be sure to quote it word for word)how is it legally possible for the treasurer who is a Board member be allowed to be compensated each month in the amount of $250? Also, do we hire this person to also do our taxes? Is this person a Certifed Public accountant, license and insured? That's how I got the legal ball rolling with my Board.

Good Luck,
Audrey

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