Is Payment of a board member allowed.

Started by PeggyH • 14 replies • 1887 views

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PeggyH (South Carolina)
Posts: 36

Posted:

I am a new board member of our Association in South Carolina, we are considering combining the Secretary & Treasurer positions. We realize this would require the person to spend a great deal of time to do thr job correctly. We were told they would be spending approximately 4 hours a week. Would it be proper to pay this person for doing this job? One of the members thought it was unlawful to pay a board member.

Jadedone4 (Virginia)
Posts: 495

Posted:

Peggy, if you are considering paying for this service, why not just hire a p/t bookeeper? As a general and practical matter board-members are NOT paid for their services to the community; they are volunteers. Check your community's governing documents and they should address that board-members are not to receive compensation for their service to the community.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Woah. That would be a first.

It MAY be possible your by-laws or CC&Rs allow it, but that would be the exception, rather than the rule.

The ONLY time board members in our community can receive any money from the association is when they incur out-of-pocket expenses to do their jobs.

So, in THAT case, it's really reimbursement, not "payment."

BradP (Kansas)
Posts: 2,640

Posted:

I would make sure your bylaws and CC&R's allow you to combine the positions. Ours do not, we have to have a minimum of three officers, President, Secretary and Treasurer.

Secondly, as Jade said if you are going to pay someone to do the work hire a professional. Again I would bet your bylaws or documents do not allow for payment of board members, ours do not.

PatrickH (California)
Posts: 204

Posted:

Peggy,

I agree with the other posters that a Board member should not be paid for work they do for the HOA, other than reimbursements for out of pocket expenses with documentation.

Whoever is going to be the Treasurer and/or Secretary will have plenty of work to keep them busy, so look for someone outside the HOA to hire to be your bookeeper. Not that your Treasurer would be anything but an upstanding person, but it removes the question of any impropriety if someone questions the financials.

PeggyH (South Carolina)
Posts: 36

Posted:

Thanks to everyone who gave me input. Our bylaws do allow for combination of the Secretary and Treasurer positions only. If the Treasurer steps down, would it be wise to have the books audited before anyone else takes the position, that is if we don't hire a bookkeeper.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

I believe it to be improper and not a prudent action on the part of the Board. Our CCR's forbid it and we are also in SC. Even if the CC&R's don't say or even say it is alright, it just doesn't make sense. Shoot, A lot of us put in over four hours week on this site and the information supplied here is worth a lot of money. If someone here can save my board thousands of $ there should not be any pay involved. Do yourselve and your fellow home owners and don't even hint at paying Board members oor any other kind of member. Exceptions always prove the rule but this would not be a shinning example.

Of course it would be wise to do an audit on any change of Treasuer, but is it prudent and good management. Do you have enough money involved to justify the cost? This is why a Board is elected, to make decisions that are not cut and dried. Follow the Documents and if there is any question, look elsewhere for the answer, evaluate the facts as you find them, still can't decide and expense of lawyer is justified, hire one as last resort.

GloriaM (North Carolina)
Posts: 829

Posted:

Peggy:

You cannot pay a board member for perfroming board services. The HOA may reimburse him/her for paper, toner, postage but not for services rendered in performing the duties of hi/her office.

LouiseH (California)
Posts: 10

Posted:

I am new on the board of our HOA in CA. We are paid a small fee as the President states. I was also under the impression that this is a volunteer position. I am reading the CC&R's and haven't seen any thing yet about being paid for our services. I would gladly not accept this fee if it is not allowed. What area would this be in the CC&R's

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Louise,
Be good to read some of the opinions here about this. Remember, just because you can't find issues in your covenants, don't assume it is a good idea to do what you or the president want. Doesn't it sound like a bad idea? If it sounds like a bad idea, it probably is. The Board has no authority to pay for this kind of service. Turn it around and ask, where does it say it is alright to do this? If your Board has been in existance for some years, I sure would be asking a lot of questions about what else is going on. I have never even heard of paying board members anywhere, maybe some one else will comment.

PeggyH (South Carolina)
Posts: 36

Posted:

I did find it in our By-Laws where it refers to payment of directors. It is in the section titled Board of Directors, it states no director shall receive compensation for any service he may render to the Association. However, any director may be reimbursed for his actual expenses incurred in the performance of his duties. I appreciate everyones response to my question.

GloriaM (North Carolina)
Posts: 829

Posted:

Louise:

The board are volunteers and cannot be paid for serving on the board. Once again the board members can be reimbursed for toner, paper etc., but not for serving on the board.

LouiseH (California)
Posts: 10

Posted:

Thank you for your fast response. I have a tough road ahead of me. I believe in being fair and working with the Association except that they do not include any members anymore in the monthly meetings. It says we can go to the meeting, but the BOD will not discuss anything that is being planned. When people ask them about problems, the BOD tells them to write a letter and put it in our mailbox.
We had a issue before I came on to the board, which was fixed after calling and calling the manager who hired the plumbing Co to install new water valves outside our unit. We went out there to see where it was and how to turn it off. We could not find it because it was buried about a foot of dirt. We left messages on the Manager's phone and never gat a response, then my husband wrote a letter and had it certified with return signature.
The President of the BOD, sent my a nasty email, saying that we need to put complaints in written and put them in the mail box for the BOD. She said that we had violated her privacy by sending it to her. I thought that the President was the one responsible if the Manager is not doing his job.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

LouiseH,
Good morning.
You are going to have to decide if you want to be effective in your actions. From what I am reading you asre jumping into the middle of each issue you foresee a screwed up. The waay to change is through either knowing you playing field better than your opponent. Don't make light of this, you need some support from some other owners, board member or owners.
It sounds like you probably have some issues that could require some changes, but the problems are with the process and you have to know all about that. Does the manager have a job discription? He should. As far as the board wanting to know why you want to see books, it is evident they don't want you to see books. Unless you can find a way to get some support the battle will be long, or you can hire a lawyer and he can tell you of plenty of good reason to see books, also cost you.

Right now, you need to back off a little and choose your issue from strenght. You get power from knowledge and people standing with you.
You are on the Board. Keep records of what goes on, voice your thoughts and suggest solutions, take over a committee and show what you can do.
Nothing wrong in you personally calling an open Town House Meeting, see what other folks are thinking. Be cool.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By LouiseH on 08/29/2007 9:11 PM
The President of the BOD, sent my a nasty email, saying that we need to put complaints in written and put them in the mail box for the BOD. She said that we had violated her privacy by sending it to her. I thought that the President was the one responsible if the Manager is not doing his job.

Louise, ask for a copy of the management agreement to determine exactly what it says. Perhaps the agreement does not allow members of the HOA to directly contact the Managing Agent. If so, the Board may consider amending the agreement. The Board is responsible, not the President, to make sure the manager is doing his job.
You stated "She said that we had violated her privacy by sending it to her." Who is she? The President? I believe she either needs to accept that when people have a problem they can "go to the top" or else she can resign as President.

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