Board member payment

What do your governing documents say? In our CC&Rs, no payment to boards or officers is allowed. Reimbursement is.

You know? No director or officer has even asked to be reimbursed for computer paper, cartridges, etc., at all and it does add up, at least on my HOA board.

You ARE lucky to have such a devoted officer and supporting her any way you can would be a good thing. If she actually goes to banks, for instance, or runs other errands, make sure she's reimbursed for mileage.

great advise and comments -- pls keep them coming!!

Our HOA ByLaws does state that Board members ( and the
Treasure is one) will not be reimbursed for their services.
Reimbursement is authorized for personal expenses for support of the HOA - e.g. normally printer ink, paper, and stamps.

As a new Board member, I have opened up what is now a hornet nest as I felt the ave 40 hr per month the Treasure works to service the HOA should receive some payment.

One board member said she thought Texas laws prevents non-profit board members from being paid but I have yet to find any such law or anyone who can provide me the law code.

again, appreciate all comments to help me determine if payment is legal for our non-profit HOA!!!

Even if it is legal it isn't a good idea. What do you want to pay her, btw? A salary? Credit on her assessments? Do you have an accountant through the MC?

As Barbara points out, your bylaws are the determining force here. jared's remarks are good ones too.

There is no law against it in Texas.

"Can a nonprofit corporation pay a salary to its officers, directors and/or employees?
Yes. Any corporation may pay reasonable compensation for services rendered to the corporation. Note that the Secretary of State does not determine what is considered reasonable compensation. A paper presented in 1993 at the IRS Continuing Education Program for Exempt Organization Specialists discusses reasonable compensation. This paper is available on the IRS web site (PDF, 116kb)."

https://www.sos.state.tx.us/corp/nonprofitfaqs.shtml#NPC6

Roger

I am in complete agreement with others who have commented: paying a member of the Board for services performed (not reimbursements) is not a good idea. I would extend that to using a homeowner as a contractor, especially one who is in a position of having access to the accounts of other owners.

I'd like to ask some basic questions regarding your association: how many homes are there, do you have a management company, are they full service or financials only, and are you still under developer control?

As a former member of Boards in California and Texas, as the president of the sub-association in which we reside, and as a co-owner of a property management company, I have to ask what work activities the treasurer is performing which requires 40 hours of her time each month? You most certainly should express thanks and gratitude to her however, even if your owners remit monthly assessment payments to her and she does all the banking and accounting, I cannot see how that would take that many hours per month even with 200-300 homes in the association. What accounting system is being used?

Is she managing the delinquent accounts/collections processes? If so, what number of accounts on average are past due/delinquent.

I'd like to suggest you and the other members of the Board take a step back and look at the activities she is performing before you modify the Bylaws. Take a view two, three, four years down the road. How likely is she to remain in this position? What is the likelihood of finding a replacement when that time comes. Would you be better served to outsource the accounting functions to a completely independent third party bookkeeper or a management company?

If she is acting as billing services, collector, bookkeeper, etc. then those aren't Treasurer's duties. Those duties of the Treasurer should be in the bylaws. Primary is the reporting to the board the financial status of the corporation, monthly.

Many HOAs have a bookkeeper who gives those figures to the Treasurer. Some have never written a check!

All this depends on the size of your HOA and the services required.

We paid our Treasurer for the extra hours she worked, mostly around assessment billing and collecting time.

My advice would be don't go there regardless of whether or not it's legal. Besides what others have said there are likely ramifications for your association insurance policies (D&O covers volunteers only?) and even your indemnification obligations. Not to mention the nastiness that will eventually surface when some owners decide that she's getting paid too much.