paying a HOA officer .

Is it common for a board member to get paid to do work , even though that person does not have a business license?

The volunteer HOA which is what my neighborhood is, is NOW paying someone on the board to do landscaping. This person does not have a license to do so, and to me that seems also like a conflict of interest. This person has been paid over 300 in 2 months. which the HOA dues is very little to begin with.

Does this sound fishy to anyone? Also the county requires anyone doing work for money o have a business license? Wouldn't it make since to have the HOA hire a real landscaper to conduct business?

Well this guy got paid around 300 in 2 months, and if that keeps up he will get over the 600.00 marker which usually means you have to do a 1099.

Should the HOA give him a 1099 to report to the IRS?

Ok thanks.

Doesn't sound good, Noah. Does he climb ladders? What if he falls, will your HOA insurance cover him?? What do the board minutes say about him being paid? Did the Board vote on this?

Are you on the Board, Noah?

Noah,

Typically, Directors are not paid. In some Associations, Officers are paid. If paying an Officer, things there can be repercussions:

1) Perception - members don't always understand the difference between Officers and Directors. Therefore, it may appear that the Board is paying themselves.

2) Accounting - payment should never be in the form of reduced assessments. The individual should pay assessments in full and the Association should write a check for work done based on an invoice.

3) IRS - If an independent contractor, a 1099-misc will need to be issued if they are paid $600 or more. If an employee, there are various taxes and withholding's that must be done. The IRS can choose to make the determination for the Association if the individual is a contractor or employee. See: Independent Contractor (Self-Employed) or Employee? from the IRS

4) Protections under the law - Being paid means you are considered a professional vs. a volunteer. This eliminates the protections one may have under the law.
See: VOLUNTEER PROTECTION ACT OF 1997 and We Don’t Need Insurance—Volunteer Protection Act of 1997

5) Insurance - Using an uninsured contractor means that the Association will have to pony up for any injuries. It might not even be the individual making a claim. It could be the individuals insurance company looking to be paid back.

We do not pay Directors, Officers or Committee members. We do reimburse for expenses for work they do. As an Officer, I have done a lot of work for the Association that, perhaps, should have been done by a contractor. However, each individual and each board needs to make that decision on their own.