HOA BOD does not pay annual dues

Is it legal for the Board of Directors to not pay annual dues. Our By-laws state:
Section 113: Compensation. By resolution of the BOD, the Directors will not be paid for attendance
at each meeting of the BOD. This provision shall preclude any Director form serving the Association
in any other capacity and receiving compensation therefor.

1). If illegal how do you get them to pay back their dues
2). Also, the President of the HOA had turned in almost $800 in milege logs
for the years of 2011 and 2012 in September 2014 because he did not think he would win the
election in Dec 2014. These logs were hand written on a piece of paper which I seen when
reviewing the Associations receipts at the Management Company

Example.
ABOUT 2x a month trip to the Mgnt Company 12 miles x2 =24 24 x12 = 288 miles

Office Max 25 miles
Police station once a week to read any/all reports from neighborhood 8 x 52= 416 miles

ETC. ETC

Is this legitamate for a receipt

Might I add we are a SMALL HOA of only 94 homes, this is a voluntary position yet he is compensated
$$$$

He also is reimbursed for approx. $200 a year in postage with NO RECEIPTS since he uses his own stamp collection.

Thank you

Board members having dues waived would be considered compensation and does not appear to be allowed by your documents. This is true of most associations, board positions are not paid. The documents constitute a contract, so while the board is breaking the contract, that is not necessarily "illegal", that would depend on your state laws.

If you feel the association is being poorly or improperly run, your best course of action might be to run for the board, find like minded homeowners to do the same, and canvas for enough votes to get elected.

From the outside, it is a bit tougher. Most states don't have much enforcement of HOA laws, much less assisting with contractual issues. Shy of voting the bums out, suing is probably be your primary alternative. This would not be cheap, you would most likely want to find others to go in with you to finance this. Since the board will probably use the HOA's dime to defend themselves, you and the other homeowners dues could be paying for both sides legal costs.

As far as expenses, same goes, you could sue, but it will cost a lot more than you would expect to recover. Again, your best bet would be to vote a better board into place and forget about the questionable expenses.

How do you know, Kim that one or more directors aren't paying their dues? If your can prove it, send a registered letter to the board c/o your mgmt. company, return receipt requested, an aka the board to follow the procedures that they follow for everyone else. btw, how do you know the director(s) are not being charged late fees or something stronger?? such records are usually confidential. Are you on the board, Kim?

It is very common for directors to be reimbursed for the types of expenses you list. BUT proper receipts must be submitted. Compensation in this context means pay. That's different from reimbursement.

What can you do? See my reply to your other post. Or take Douglas' advice: "If you feel the association is being poorly or improperly run, your best course of action might be to run for the board, find like minded homeowners to do the same, and canvas for enough votes to get elected."

Thank you for everyone who responded:

Let me try to answer several of the questions asked:
Reply to EmmaH1

Yes, it was never voted on and never in the meeting minutes, making this approval
for non dues void. They have been doing this for 9 years!

I know this for a fact because I used to be on the board and paid dues firstly, secondly,
my mother in law is on the board now, and the President announced this is his newsletter saying
if you are elected you don't have to pay dues. For this to be valid it must have a vote
of the board of directors and be written in the meeting minutes which it is not.

Thanks

reply to MelissaP1

I agree 110%, not to mention they do no 1099 them like they should because
this is income.

Reply to DouglasK1

I agree 110% and tried to do that by running for President.
All of my supporters showed up. We had 71 homes out of 94 representing
with proxies. For the past 18 years we could never even make a quorum.

The thief won by soliciting proxies and bullying people by saying they have to
give him a proxy if they don't attend the meeting.

So sad

Reply to KerryL1

I know they are not paying their dues because my Mother in Law
is on the board and the President puts in our newsletters that if you
are a board you do not pay dues. I was on the board for many many years before
this and we always paid. He said they voted on it, lie, if it is voted on
it must be recorded in the minutes and it is not.

He turned in close to $800 in mileage in September 2014 for the years of 2011 and 2012.
No receipts, no official log. The Management company knows as I have written letters.
They say they have no control because they WORK FOR THE BOARD. Please see my other replies about the proxy voting and how he won.

Thanks!

Reply to DouglasK1

I agree 110% and tried to do that by running for President.
All of my supporters showed up. We had 71 homes out of 94 representing
with proxies. For the past 18 years we could never even make a quorum.

The thief won by soliciting proxies and bullying people by saying they have to
give him a proxy if they don't attend the meeting.

So sad

I agree 110%, not to mention they do not 1099 them like they should because
this is income.

Let me try to answer several of the questions asked:
Reply to EmmaH1

Yes, it was never voted on and never in the meeting minutes, making this approval
for non dues void. They have been doing this for 9 years!

I know this for a fact because I used to be on the board and paid dues firstly, secondly,
my mother in law is on the board now, and the President announced this is his newsletter saying
if you are elected you don't have to pay dues. For this to be valid it must have a vote
of the board of directors and be written in the meeting minutes which it is not.

Thanks

I agree, they should not be a member of good standing because they a have not paid their dues in the past 9 years. The problem is, the PMC
said " well they have been doing this for the past 9 years and they voted on it", well that can not be true because where is the proof they
voted on it? It is not in the meeting minutes and it has to be if they voted on this.

No I am not a new board member, I have been on the board in the past prior to this NON PAYMENT of Annual Dues so called rule

I know this to be a fact because the President uses this " you dont have to pay your dues" to get people to run for a position,
and he puts in in our newsletters. Also my mother in law lives in our sub and is on the board.

Thanks

5 officers
President, VP, Secretary, Treasurer and Director
94 homes, dues are $150

The bylaw prohibits compensation for BOD, but we have officers ( President, VP, Treasurer, Secretary and Director) and it says
nothing about compensation for them in the officer section of the Bylaws

Our officers ( president, vp, secretary, treasurer and director) are called Board of Directors. These are appointed positions that are elected by the homeowners once a year at our
annual meeting.

Our President is the President of the Board of Directors
etc. for Vp, Treasurer, and Secretary

You have 5 Directors and 4 Officers.
One Director is not an Officer. The other four Directors sit in a dual role of Officer and Director.
Combined, all five make up your Board of Directors.

See prior post in this thread:


You have a Director/President, a Director/VP, a Director/Treasurer, a Director/Secretary, and a Director. None of these positions can be compensated. According to your docs, no Director can serve in ANY compensated capacity.

But that's just my reading. You should get a legal opinion.

Still having trouble trying to understand what you've got.

Dues are $150 per year.
94 units would generate $14,100 in income.
5 units don't pay - which costs the HOA $750.
Income from 89 units should be $13,350 or thereabout.

That's not a lot of money.
Would you mind sharing - How much does your PMC get paid?
What services does your HOA provide to HOs?

Here is the kicker, According to our Bylaws at our annual meeting we are to elect a board of directors,
after that meeting the BOD have another meeting thereafter and decide among themselves who is the President, VP, Treasurer and Secretary.

BUT at our annual meeting our ballots list everyone running for Pres, Vp, Treas, Sec and we vote
individually for one person in each category. This year we had 9 people nominated. After elections
2 quit because they cant work with the President ( they were hoping my husband was going to win for
President) so now we only have 3 BOD, we never have a full board because they are not voting properly.

If we vote according to our bylaws then the top 5 votes for DIRECTORS would if won, and we would always
have a full BOD, but they have us vote for the officers which is not in the bylaws.

This entire assocation is messed up, that is why my husband was running to straighten this all up.

What do you get for the $7,000 that doesn't go to the PMC or Pres?

Not exactly, My mother in laws term ended the night the new board took office ( she did not want re-election) and since the President came in
with 30 proxies, he voted for who he wanted to be BOD and they got his 30 votes, not who was running with my husband. There was a total of 9
people who ran for office. So 3 people elected were on the Presidents ballot, and the other 2 were running with my husband. The next day the person who ran
with my husband resigned, and the VP who won who was running with my husband said he could not work with the President. HE DID NOT RESIGN, but the PMO
said since he said a couple days later he could not work with the President that this was a resignation to them and they say he is not VP, even
though he was voted in by the membership!! The management company pays all our bills so there would be no banking involved.

It could of been the perfect plan but did not work that way.

Not exactly, My mother in laws term ended the night the new board took office ( she did not want re-election) and since the President came in
with 30 proxies, he voted for who he wanted to be BOD and they got his 30 votes, not who was running with my husband. There was a total of 9
people who ran for office. So 3 people elected were on the Presidents ballot, and the other 2 were running with my husband. The next day the person who ran
with my husband resigned, and the VP who won who was running with my husband said he could not work with the President. HE DID NOT RESIGN, but the PMO
said since he said a couple days later he could not work with the President that this was a resignation to them and they say he is not VP, even
though he was voted in by the membership!! The management company pays all our bills so there would be no banking involved.

It could of been the perfect plan but did not work that way. [Sad]

Our Bylaws say: "Any director may be removed from the board, with or without cause, by a majority vote of the Association Members. In the event of death, resignation, or removal of a director, his successor shall be selected by the remaining board members, in accordance with Section xxx"

Do you have a similar provision. What does it say?

I would get back to the tax ramifications. A nice placed call to the IRS and the President's name may do the trick... I wouldn't want to get the whole HOA in trouble. However, this is a tax issue that most likely is not being reported correctly. The IRS has a line for that.... Just sayin...

if push comes to shove I will, I hate to do that because he will 100% know it came from me and then tell the
entire membership, making my neighborhood not as friendly.

He made our entire annual membership meeting a 1 1/2 hour platform for his campaign. His VP slandered my husband who
was running for President at this meeting with lies, told to him by the President. The membership was only allowed
to talk for 1 minute and only 1 time ( his rules at the meeting). The membership made a motion to change the order of
the agenda and it was second, and third and he slammed his gavel and shouted 'YOU ARE OUT OF ORDER, we are not moving
the order of the agenda" even though we run by Roberts Rules and I brought proof stating that it says

A strong meeting agenda – the plan for your meeting – is essential for successful meetings. Giving thought to the meeting agenda and arranging it with care will pay off when the meeting actually happens.
Meeting agendas are arranged according to the “order of business.” The order of business tells what things should happen first, then next, then last. Robert’s Rules of Order prescribes a definite order of business. For many boards, a more flexible order and agenda will work better.
Sometimes people get into power struggles about what goes on the meeting agenda. Under Robert’s Rules, it is the group that has final say over the meeting agenda, not the leader.
For a group that uses Robert’s Rules, this is the common pattern: the president or chair of the organization prepares a draft meeting agenda, often with the assistance of the secretary. At the beginning of the meeting, the group – board, council or committee – votes on adopting the meeting agenda. At that time, members can suggest changes – adding items, deleting them, or changing the order.
It takes a majority vote to make these changes and to adopt the meeting agenda. After that time, if members want to change the meeting agenda during the meeting itself, it will take a two-thirds vote.

Which you can see Roberts Rule says the group has final say over the meeting agenda NOT THE LEADER.

He is a bully and took our rights away at the meeting.... it was horrible!

Kim

Whether you like it or not, you are in a political fight. It will take political action to get things fixed. By your own admission, he has been able to crush the opposition with his tactics and you have been unsuccessful in your attempts to get anyone to pay attention to the rules. Something needs to change in the way YOU are approaching this.

Considering how small your annual budget is, no one can afford a legal battle. But you can afford a political battle if you are willing to step up and fight openly. This will expose you to personal criticism, but when an issue is important enough, that's the cost of standing tall. Being right doesn't always get the right thing done. Changing your approach could get the right thing done.

One of the most important things you said is that you have a lot of elders in your community. Elders are more likely to watch their pennies than anyone else. They are also the most likely to be fearful of money wasted on litigation. You need a strategy and a plan that will be effective with this audience.

Here's a campaign message that I think would resonate with your elders (and everyone else): "Prez pays $0 and keeps more than $75 of your $150 for himself and his PMC buddy. Less than $75 goes toward the actual upkeep of our property. If every Board member paid dues like you and me, your dues could go down to $100, we would have the same $75 to pay for upkeep, and we would still have $25 left over to pay for administration."

If it was me, I would take it one step further. I would demand a special meeting to remove every board member who does not pay back all the back-dues immediately. If you have one or two individuals on your Board who think like you, then you can get them to implement Jeff's plan without waiting for an Annual election. All you need is vacancies that Board members who paid up have a right to fill.

Later, you can talk about the IRS exposure. But right now, you need to keep your message simple - and money is something that everyone understands.

If your message is about money and only about money, he has zero defense. If your message is about rules, no one is interested. Your choice.

I like NpS' ideas too, Kim.