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JamesL3 (South Dakota)
Posts: 1
Posted:
Is it legal for the president to start charging for his services? We have a president that wants to charge for his service to the association members who are not involved in any tasks. Is this legal? If so, who do they pay the president himself or the HOA? Is he or the HOA subject to a 1099 misc then?

Lanier
MicheleD (Kentucky)
Posts: 4,491
Posted:
Quote:
Posted By JamesL3 on 03/28/2009 1:13 PM
We have a president that wants to charge for his service to the association members who are not involved in any tasks.

Lanier

I have no idea what that sentence means.

Do you mean he wants to charge the association for the time he devotes to Association business?

If so, then your governing documents can give you that answer.

MOST (not all, but most) board members and officers of homeowners associations are "volunteers," and that status will generally be spelled out in your governing documents with wording like this:

SECTION 10. Compensation. Directors shall not be entitled to compensation for their service as a Director. Officers shall not be entitled to compensation for their service as an Officer.

If your governing documents are silent in this regard, look to your state laws or statutes.
SusanW1 (Michigan)
Posts: 5,202
Posted:
However, if he/she has a very special expertise and there is a job that needs to be done, there is nothing wrong with paying the going rate for the service rendered. Of course, he shold submit a bid for the service, as all other bidders would do.

But not for his "services" in the capacity while performing director or officer duties.
MaryA1 (Arizona)
Posts: 7,043
Posted:
James,

If not addressed in your bylaws, compensation of directors and officers is most likely addressed in the state nonprofit corp statutes which the HOA would have to abide by. Normally compensation of directors and officers is not allowed unless the bylaws state otherwise. IMO, I don't believe directors and officers should ever be compensated for performing their duties, but of course they can be compensated for any out-of-pocket expenses generated in the course of performing their duties. HOAs are volunteer assn's and volunteer does not mean being paid for your services! Now if your bylaws and state law is silent on this topic the BOD can do as they wish but the topic should be discussed and voted on. The Pres does not have the authority to decide on his own that he is to be compensated for performing his duties as Pres. He's only one member of the BOD and he only gets one vote!!

As Susan says, an officer or director can be compensated if he performs a job outside the scope of his duties as an officer or director.

The assn should issue a 1099 to all contractors of the assn. If the assn is currently paying a director or officer a 1099 should be issued to that person by the assn.

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