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Posted By BuddyJ on 01/08/2009 10:01 AM
Can we offer our active HOA officers reduced annual dues to possibly inspire more members to volunteer as an officer? Our By-Laws state "No director shall receive compensation for any service", but we always struggle to recruit new members for volunteering every year. We already did a mass mailing to vote on 1 of 3 choices; no discount, 50% and 100% reduction of annual dues. Only 1 respondent checked no discount and the balance of the votes were nearly equal for 50% and 100%. Thank you
Let me suggest you think this through, very carefully. A fee reduction is compensation, which means you would, indeed, have to amend your governing documents.
Also, a reduction of fees is considered compensation by the IRS. That would (1) make such a reduction in fees taxable income to each board member and (2) and require that the association send out a 1099 each year to each board member (if the amounts exceed the trigger).
A better solution would be amend the bylaws to permit board members to be paid for their services. There is nothing wrong with that at all. Large not for profit organizations compensate their directors as do corporations.
If you do, you might consider paying board members, say, $50 per meeting attended, rather than a fixed annual amount. You may also consider adding additional annual compensation for officers, particularly the president, secretary and treasurer as John suggests.
Personally, I do not advocate paying board members for service to a small or mid-size homeowners association, but there is nothing inherently wrong with it. It is a hassle and may end up creating a precedent without solving the underlying problem of interest and participation.
I would look for other reasons that underlie the problems you are experiencing.