Treasurer's "Stipend"

I am interested in hearing replies to this one as I was under the impression being on the Board was an unpaid voluntary position. I cannot imagine someone asking for "benefits" of any kind.

Reimbursed for what? Volunteering? It's an unpaid position. In our state it is not legal to be paid for sitting on a Board of Directors. But we DO turn in receipts for legitimate expenses; such as paper and ink for our printers to print Association business; and for stamps for postage. But we keep it all on the up and up. Everyone (on the board) reviews the petty cash receipts that are turned in so it's all on the up and up.

MaryB,

If you feel he submitted a claim in error I think it should be checked out. Contact the ins. agent and find out exactly what the ins. policy covers and what his claim was for. IMO, it would depend upon how the damage was caused. If a roof leak caused water to get into his unit and cause damage, then perhaps the HOAs ins. should cover it. However, it seems to me the board should have approved any insurance claim. It appears this is something that should be checked out. He shouldn't have the authority to just submit a claim w/o board action.

Reimbursing a director for expenses incurred is a normal practice; paying a "stipend" or salary to a director for performing the duties of his office is not! I found the following info on a Davis-Stirling website. I think you will find it useful in explaining to your treasurer why the assn should NOT pay him a "stipend". The codes referenced are CA Code.

VOLUNTEER LIABILITY

Many protections are lost if a director becomes a paid director. To maintain their protections, directors cannot receive compensation for their service on the board.

Volunteer means the rendering of services without compensation.

Compensation means remuneration whether by way of salary, fee, or other consideration for services rendered. Most CC&Rs and Bylaws prohibit the compensation of directors.

Expenses Allowed. Reimbursement of expenses is allowed. Payment of per diem, mileage, or other reimbursement expenses to a director or executive officer does not affect that person's status as a volunteer. Corp. Code §7231.5(b), CCP §425.15(d), Civil Code §1365.7(b)

Volunteers Protected. By statute, volunteer officers and directors are protected against personal liability for mistakes they make while carrying out their duties.

. . . no cause of action for monetary damages shall arise against any person serving without compensation as a director or officer of a nonprofit corporation Corp. Code §5047.5(b)

. . . there is no monetary liability on the part of, and no cause of action for damages shall arise against, any volunteer director or volunteer executive officer of a nonprofit corporation . . . Corp. Code §7231.5(a)

A volunteer officer or volunteer director of an association . . . shall not be personally liable . . . Corp. Code §7231.5(a)

Wow! Thank you all so much!! Your replies have helped me tremendously. I have also contacted the insurance company (as by his own admission, he did not replace a $9 part in his toilet...that is why all water overflowed and damaged his floors and carpets).

But, to my main question regarding his "stipend" request, it is not in our governing laws, and I am very thankful to all who replied.

Thank you, thank you, thank you.

I think there is a bit of confusion here. You reimburse a person so that you can justify the expenditure on your operating account. I did not mean reimbursement for the sake of it. It has to be a valid business expense, not for volunteering your time.

I have owned several houses in different states and have been on boards too.

AnnaD2, have a good night sleep.

Hi Mary,

Reimbursing the Treasurer for any out of pocket costs they spend is one thing, paying them a "stipend" for their time is quite another. Being on the Board is a volunteer position.

If the Tresurer is printing up and mailing all the dues invoices for example, then they should be reimbursed for paper, envelopes, ink, stamps, etc. If they are not spending their own money on anything , they shouldn't be compensated for their time, since every Board member is volunteering their time and theoretically should be given a "stipend" as well.

I'm in Orange County, CA, was the Treaurer of my HOA for six years, know several other Treasurers from nearby HOAs and none of us have ever received any payment for our time.

Our HOA compensates the Treasurer $1,000 per year. She takes care of all the billings, mailings, and follow up for accounts receivable transactions involving 250 homes (most on some kind of payment plan) investments, and reports. She does the same thing as a billing company or MC would do, if we had to hire one for collecting our membership dues - and get this: the board can also award her more hourly compensaton if it is approved by a vote.

It should not be deducted from HOA Dues and fees. Your treasurer should still pay in like everyone else. It would only hurt the HOA itself. Your treasurer may be experiencing financial difficulties and that is why he/she is requesting this. The board should review his/her personal finances to see if he/she is still "fit" to be treasurer. And yes you should 1099 at the end of the year and pay him if the board votes and agrees at you next annual meeting. Your HOA bylaws say when you can meet and how to vote and make motion for new business or issues.

Hope this helps, Marcie

George, I'm in FL (but have also lived in OH and GA), and it's common practice here that once the HOA has transitioned to the membership, board members duly elected become Officers of the Corp. They have to file an Annual Report with the State no later than April of each year (I think) to update the records with the state. Property Managements cies. usually take care of these legalities.

Now, since you have touched on the "sticky" matter of compensation. Our By-Laws (which BTW have never been updated nor the Covenants) requires 4 Officers, and prohibits any officer (or board member) from receiving compensation. We had a situation where the VP, who has recently resigned, had the grounds maintenance contract. He claimed there was no law that prevented him from having it both ways. To make matters worse, he was doing a poor job in his spare time since he has a regular job. My contention was:

a) he could have it both ways
b) he had to deliver a much better service
3) as a homeowner, he could not have the monopoly of bidding

Your thoughts.

Florida is the proverbial horse of a different color when it comes to homeowners association and condo laws. Perhaps more than any other state Florida has had the most experience, and perhaps the most "issues" with homeowners association governance. Florida statutes are far more comprehensive than most.

Typically, under corporate not for profit statutes in most (but maybe not all--I have not researched all) a board member is not an officer of the corporation. The board elects such officers. Most states require a president, treasurer and secretary, with some overlap possible (e.g. president/secretary, but typically not a president/treasurer) as officers.

Statutes, covenants, or bylaws can prohibit payment for services rendered to both board members and officers. Absent such prohibition, it may be perfectly permissible to pay board members for their service and to pay officers for services rendered (as officers), even if the corporation is a not-for-profit. A great many charitable organizations pay their president and chief executive officer a salary.

I have reservations about contracting with a board member's company to provide services to the association.

I also have reservations about compensating a board member for services not directly related to either (1) board service or (2) officer service. For instance, I have no problem with the notion of paying a treasurer for managing associating finances and keeping the books. However, I do have a problem of paying the president--or any board member--for mowing the lawns, even though it may be a contract that benefits the association. Mowing lawns is not a official corporate duty.

In all dealings with the association, there needs to be the actuality of and appearance of an arm's length transaction. It is not a wise idea, I believe, to enter into any service contact with either a board member or an association member.

Such arm's length dealings may mean that it costs the association more money to bid out a contract. But, in my mind, that is the cost of assuring legitimate, above board dealings.

Ever so often there are reports of misdeeds by homeowners associations board members and officers, similar to the one reported yesterday,

Former Roy mayor charged with theft from HOA
http://www.yelmonline.com/storynews.php?subaction=showfull&id=1223065808&archive=&start_from=&ucat=1

"Of those checks, 16 of them were written to Eldridge’s husband, John Eldridge, for unauthorized lawn maintenance."

At the very least all payments to board members and to all association members should be approved and fully disclosed in minutes and newsletters. I further think it would be desirable to mandate that each board member sign a conflict of interest statement annually and make those statements part of the associations public record.

Our docs specifically allow the S/T to be paid for any services at the Board's option.

In our case, when we went self-managed, we decided this would be implemented for those occasions when work the PM would ordinarily have handled, esp. projects with outside vendors or others requiring detailed supervision and interaction, came up, above and beyond regular S/T duties, which remain volunteered.

The Board, minus the S/T's vote, approves beforehand hours in 2 hour increments, or more if it's obvious a long march is at hand.

Mary,

Please forgive me as it has taken you 3 requests as to where to find the California laws and not one of us answered it for you.

The Davis/Sterling Act is where to go. It is fairly easy to navigate the site but this particular issue might not be even addressed. If not, also check your Non Profit Corp laws under Board compensation.

My humble opinion is that, number 1, your documents do not address Stippening, which then makes it out of your Boards power to act on unless the annual budget could create a line item for it. Number 2, I would think that this would have to be added under the bylaws where officer responsibility is listed and a compensation to the Treasurer would be added someplace but that must be amended by the membership, not by the Board alone. I hope that this finally helps.

Hi George,

I can easily understand why the officers of a large, non profit corporation would be paid because it is their full time job. I can imagine that being the Treasurer for the Red Cross or the American Heart Association isn't some four or five hour per month job! Those type of non profits have hundreds, maybe thousands, of salaried employees, so they would have to pay for a President, Treasurer, etc.

The Board of Directors for a non profit like those probably don't get paid since the Board usually consists of top executives of other corporations making a boatload of money doing ther "regular" jobs. They don't need a salary and do it for both the desire to give back to their community and the good PR that comes from saying they are a Board member of such an organization.

When it comes down to something like a homeowner's association, the Board and the Officers are usually the same people, so I don't think they should be paid for anything except out of pocket expenses in conjunction with doing their jobs. If the president wants to buy a gallon of paint and a paintbrush for touching up the fences, they should be reimbursed for that. If the president then wants to do the the touch up painting, they shouldn't be paid for their labor.

I've gone out and bought lightbulbs for our clubhouse and replaced them. I was reimbursed for the cost of the bulbs, but not for the time I spent replacing the burnt out bulbs.

Well put Patrick.