Please help me understand limitations of officer positions in our Bylaws

MichaelB44 (California)
Posts: 33

Posted:

Hi, I am trying to understand this section's meaning from our Bylaws:

Section 1. OFFICERS • The Officers of the Association shall be a President, a Vice-President, a Treasurer, and a Secretary. The Association may also have at the discretion of the Board, one (1) or more assistant secretaries, one (1) or more assistant treasurers and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article. Officers other than the President need not be directors. One (1) person may hold two ( 2 ) or more offices, except those of president and secretary.

Does this mean that one can not be President and Secretary at the same time? Or does it mean that no one can be the President or Secretary with any other position? Does this mean that the Vice-President can be Treasurer and that would be the only allowable overlap? Finally, if that last interpretation is correct, what happens when we lose a President and the VP is also the Treasurer but our Bylaws also require all checks be signed by both the President and Treasurer?

RichardP13 (California)
Posts: 3,868

Posted:

I will defer to Kerry, the expert in California. Besides it appears she is more friendly and less divisive.

AugustinD
Posts: 5,144

Posted:

I have seen the restriction on no person being simultaneously both the President and Secretary. The reason to me is that taking Minutes at the same time as one presides (as President) is difficult. My interpretation would be your first one. Meaning, for example, a person could serve simultaneously as Treasurer and Secretary.

Who can serve as Treasurer, per your Bylaws: The President, Vice-President, Secretary, or any member who is not a director.

If the President is simultaneously the Treasurer, or if the VP is interim President, then to meet the intent of the Bylaws and for security, I would appoint a second check signer, even if this is not the Treasurer. Adding a check signer is not a trivial exercise with banks. Given how serious they are about this, your HOA should be as serious. If finding a second check signer is problematic, set a maximum for how large a check the President-Treasurer may sign solo. For example, $2000.

MichaelB44 (California)
Posts: 33

Posted:

Quote:

Posted By AugustinD on 06/14/2017 7:51 AM
I have seen the restriction on no person being simultaneously both the President and Secretary. The reason to me is that taking Minutes at the same time as one presides (as President) is difficult. My interpretation would be your first one. Meaning, for example, a person could serve simultaneously as Treasurer and Secretary.

Who can serve as Treasurer, per your Bylaws: The President, Vice-President, Secretary, or any member who is not a director.

If the President is simultaneously the Treasurer, or if the VP is interim President, then to meet the intent of the Bylaws and for security, I would appoint a second check signer, even if this is not the Treasurer. Adding a check signer is not a trivial exercise with banks. Given how serious they are about this, your HOA should be as serious. If finding a second check signer is problematic, set a maximum for how large a check the President-Treasurer may sign solo. For example, $2000.

Thank you for your response. I interpreted it as you did at first but then working the other way that explanation doesn't seem to hold.

For example, if we interpret it to mean only the President and Secretary can not be the same person, that allows the President to serve as Vice-President or President/Treasurer or VP/Treasurer, none of which make sense.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By MichaelB44 on 06/14/2017 7:26 AM
Hi, I am trying to understand this section's meaning from our Bylaws:

Section 1. OFFICERS • The Officers of the Association shall be a President, a Vice-President, a Treasurer, and a Secretary. The Association may also have at the discretion of the Board, one (1) or more assistant secretaries, one (1) or more assistant treasurers and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article. Officers other than the President need not be directors. One (1) person may hold two ( 2 ) or more offices, except those of president and secretary.

Does this mean that one can not be President and Secretary at the same time? NO Or does it mean that no one can be the President or Secretary with any other position? YES Does this mean that the Vice-President can be Treasurer and that would be the only allowable overlap? YES ... or another such officer as may be appointed. Finally, if that last interpretation is correct, what happens when we lose a President and the VP is also the Treasurer but our Bylaws also require all checks be signed by both the President and Treasurer?I would recommend the President and Secretary be the individuals to sign checks. You should not have the individual who deposits money, balances checking accounts, writes checks, etc. to be an entity who also signs checks. This is potentially why maybe the President and Secretary cannot hold other positions. It is a good check and balance for the HOA to separate them out.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Sorry my bad the first question should also be ... YES instead of NO.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By AugustinD on 06/14/2017 7:51 AM
I have seen the restriction on no person being simultaneously both the President and Secretary. The reason to me is that taking Minutes at the same time as one presides (as President) is difficult. My interpretation would be your first one. Meaning, for example, a person could serve simultaneously as Treasurer and Secretary.

Who can serve as Treasurer, per your Bylaws: The President, Vice-President, Secretary, or any member who is not a director.

If the President is simultaneously the Treasurer, or if the VP is interim President, then to meet the intent of the Bylaws and for security, I would appoint a second check signer, even if this is not the Treasurer. Adding a check signer is not a trivial exercise with banks. Given how serious they are about this, your HOA should be as serious. If finding a second check signer is problematic, set a maximum for how large a check the President-Treasurer may sign solo. For example, $2000.

According to what was posted, the president and secretary cannot hold more than one officer position. In an association with 21 units, the Bylaws will generally call for only three Directors. The third person has to be the VP and Treasurer.

The other scenario is, all the other officers except president are not Directors, therefore they would not be able to vote on Board business. So you could have three directors, one of which is president, with the other two taking up airspace.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Michael

It means the Pres and Sec cannot be the same person otherwise, all on the BOD can hold more then one position. Mix them up any way you want as long as the Pres and Sec are not the same person.

Pres, VP, Treas...same person OK

Sec, VP, Treas...same person OK

Pres, Sec same person....No

Quite common to mix VP with another position as the VP is not full time. I was once VP and Treas.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By RichardP13 on 06/14/2017 9:22 AM

Posted By AugustinD on 06/14/2017 7:51 AM
I have seen the restriction on no person being simultaneously both the President and Secretary. The reason to me is that taking Minutes at the same time as one presides (as President) is difficult. My interpretation would be your first one. Meaning, for example, a person could serve simultaneously as Treasurer and Secretary.

Who can serve as Treasurer, per your Bylaws: The President, Vice-President, Secretary, or any member who is not a director.

If the President is simultaneously the Treasurer, or if the VP is interim President, then to meet the intent of the Bylaws and for security, I would appoint a second check signer, even if this is not the Treasurer. Adding a check signer is not a trivial exercise with banks. Given how serious they are about this, your HOA should be as serious. If finding a second check signer is problematic, set a maximum for how large a check the President-Treasurer may sign solo. For example, $2000.

According to what was posted, the president and secretary cannot hold more than one officer position. In an association with 21 units, the Bylaws will generally call for only three Directors. The third person has to be the VP and Treasurer.

The other scenario is, all the other officers except president are not Directors, therefore they would not be able to vote on Board business. So you could have three directors, one of which is president, with the other two taking up airspace.

Sorry, meant to say that the president and secretary cannot be the same person.

RichardP13 (California)
Posts: 3,868

Posted:

In 8 years, I have been involved with over 120 properties. Because there was a management company involved, 99% felt the MC should be handling everything. The officer positions were pretty much ceremonial in nature, something they did after the annual meeting was over.

In California, because of the complex rules and regulations, I would highly recommend that any association have a management company involved. If price is an issue, go for financial management only, even it the MC is located a distance away.

Some of the reasons and benefits.

1. Assess and collect dues.
2. Handle collections
3. File liens when necessary
4. Handle paperwork on violations
5. Prepare and send out Annual Disclosures and Annual Financial
6. Prepare monthly financials
7. Prepare and pay bills
8. Prepare and send out election documents
9. Maintain a web portal
10.Maintain and store documents (most companies can digitize all your documents for easy retrieval and transition.

Some of the services would be ala carte, but you would only be billed WHEN they are needed. Some companies will outsource their printing and mailing services. This allows for customization and specialization at a moments notice.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By RichardP13 on 06/14/2017 7:35 AM
I will defer to Kerry, the expert in California. Besides it appears she is more friendly and less divisive.

I always thought Kerry was a 'he'.

MichaelB44 (California)
Posts: 33

Posted:

Quote:

Posted By RichardP13 on 06/14/2017 10:17 AM
In 8 years, I have been involved with over 120 properties. Because there was a management company involved, 99% felt the MC should be handling everything. The officer positions were pretty much ceremonial in nature, something they did after the annual meeting was over.

In California, because of the complex rules and regulations, I would highly recommend that any association have a management company involved. If price is an issue, go for financial management only, even it the MC is located a distance away.

Some of the reasons and benefits.

1. Assess and collect dues.
2. Handle collections
3. File liens when necessary
4. Handle paperwork on violations
5. Prepare and send out Annual Disclosures and Annual Financial
6. Prepare monthly financials
7. Prepare and pay bills
8. Prepare and send out election documents
9. Maintain a web portal
10.Maintain and store documents (most companies can digitize all your documents for easy retrieval and transition.

Some of the services would be ala carte, but you would only be billed WHEN they are needed. Some companies will outsource their printing and mailing services. This allows for customization and specialization at a moments notice.

Thank you for your responses. If we can manage to find a service that fits into our budget, would we need to amend our bylaws to allow a MC be the sole signature on the checks or do we set it up to where the MC signs along with the President/VP or Treasurer?

RichardP13 (California)
Posts: 3,868

Posted:

If you create a system where the MC signs the checks, pass a Board Resolution. There are web portals that some companies have that will allow Board members to view invoices and approve payments prior to checks being cut. Technology is catching up to the real world.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

In our 112 unit, $70K budget, we let the MC collect dues and pay bills. Our BOD gets a monthly statement so how good we keep an eye on things is up to the BOD. We have one fail safe. Dues are sent to a bank lock box quarterly then transferred to the MC. The BOD has a "password" that upon implementing, the bank would stop all monies being sent to the MC. Worst case we would be out about 1/4 of our dues. The MC has no control or power over the reserves. Only the BOD does and it requires two signatures.

There is no real fail safe method as cheaters find a way to cheat. All a BOD can do is keep an eye on things including each other..LOL

MichaelB44 (California)
Posts: 33

Posted:

I agree...we're just trying to keep honest people honest.

Thank you all for your helpful advice.

MichaelB44 (California)
Posts: 33

Posted:

Quote:

Posted By RichardP13 on 06/14/2017 2:34 PM
If you create a system where the MC signs the checks, pass a Board Resolution. There are web portals that some companies have that will allow Board members to view invoices and approve payments prior to checks being cut. Technology is catching up to the real world.

Just to be clear, if your bylaws state that all checks must have two signatures, we can pass a board resolution that allows our MC to sign the checks or would the bylaws have to be amended first?

KerryL1 (California)
Posts: 14,550

Posted:

The reason that I heard for the Prez & Sec'y not being the same person....per our bylaws too--is that the minutes have two signature lines, one for the president and one for the sec'y attesting to the accuracy of the minutes.

But it makes sense that it's too difficult for the sec'y to write minutes while simultaneously conducting meetings, which often is the case where there's no MC. It's also one reason why small board will appoint a non-director as secretary for the purpose of writing meeting minutes only.

Glad you're back, Michael.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By MichaelB44 on 06/14/2017 4:43 PM

Posted By RichardP13 on 06/14/2017 2:34 PM
If you create a system where the MC signs the checks, pass a Board Resolution. There are web portals that some companies have that will allow Board members to view invoices and approve payments prior to checks being cut. Technology is catching up to the real world.

Just to be clear, if your bylaws state that all checks must have two signatures, we can pass a board resolution that allows our MC to sign the checks or would the bylaws have to be amended first?

I have been told that as long as a Board Resolution is approved in open session to change how checks are signs you would be good to go. As an added note, make sure you have checks and balances to prevent fraud. Have the Board approve invoices to be paid. If it is a contract that has the same monthly payment, that should be fine. Some things go on auto-pay.

I have had associations wanting to sign checks and it turns out they lost the checks, never mailed back, never mailed to vendors. After a while, we said thanks, but no thanks.

MichaelB44 (California)
Posts: 33

Posted:

Quote:

Posted By RichardP13 on 06/14/2017 5:32 PM

Posted By MichaelB44 on 06/14/2017 4:43 PM

Posted By RichardP13 on 06/14/2017 2:34 PM
If you create a system where the MC signs the checks, pass a Board Resolution. There are web portals that some companies have that will allow Board members to view invoices and approve payments prior to checks being cut. Technology is catching up to the real world.

Just to be clear, if your bylaws state that all checks must have two signatures, we can pass a board resolution that allows our MC to sign the checks or would the bylaws have to be amended first?

I have been told that as long as a Board Resolution is approved in open session to change how checks are signs you would be good to go. As an added note, make sure you have checks and balances to prevent fraud. Have the Board approve invoices to be paid. If it is a contract that has the same monthly payment, that should be fine. Some things go on auto-pay.

I have had associations wanting to sign checks and it turns out they lost the checks, never mailed back, never mailed to vendors. After a while, we said thanks, but no thanks.

Since I've been the treasurer, all current invoices/payments due have been required to be brought to the monthly board meetings and we sign the checks and record the events into the minutes. I've converted our re-occurring payments into autopay.