Management Holiday Gift.??

Started by NoelleC2 • 19 replies • 4672 views

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NoelleC2 (California)
Posts: 47

Posted:

I am new here and thought maybe I could get some help or advice. Our small HOA is very demanding, our HOA President is almost daily on the phone, or email about something with our property. Our manager has met all our demands and does so smiling. Our board ( a board of 3) felt it was over due to get our manager a token of our thank you for a hard year. Our President is being a stickler and will only "approve" a small gift. Our board majority wants to be gracious and give a $100 AMEX gift card to our personal manager. Per David Steriling... we shouldn't be giving extravagant gifts. Our president is pushing that $100 gift card is OVER the top.

Any HOA advice?

MicheleD (Kentucky)
Posts: 4,491

Posted:

I agree that $100 is over the top.

You pay this person for their "smiling service."

In most companies, codes of conduct and other ethics guidelines indicate any gifts over $50 are "iffy." (not a legal term)

SusanW1 (Michigan)
Posts: 5,202

Posted:

20% of one monthly fee.

EllenS1 (Florida)
Posts: 1,148

Posted:

The majority should rule not the president.

NoelleC2 (California)
Posts: 47

Posted:

OH forgot to add that since our president does sign the HOA checks along with the treasurer that she said she would refuse to sign anything..

GlenL (Ohio)
Posts: 5,491

Posted:

Then maybe it's time to replace the president and give her another position on the BOD. In most Associations the H/O elect the BOD but the BOD elect the officers, you can't remove her from the BOD but the BOD can appoint another person president.

Studies show that 5 out of 4 people have problems with fractions

NoelleC2 (California)
Posts: 47

Posted:

I think what has come since I posted this was a compromise. It's really difficult when individuals have differences of opinion on what is extravagant... etc. What doesn't work is it's my way or the highway attitude... and it causes a wedge between a working board.

SheliaH (Indiana)
Posts: 6,964

Posted:

We don't have any rules on this issue, but last year, we gave our manager a $50 gift card - no association money was used, which I think is proper.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MaryA1 (Arizona)
Posts: 7,043

Posted:

I agree with the way Shelia's BOD handled it -- no money from the assn's coffers.

I think our assn has the best manager money can buy. She & her husband (does all the accounting) own this small mgmt co and they do an outstanding job. They treat the BOD and advisory committee AND their spouses to dinner each year in appreciation of our assn doing business with them. Our mgr said because we are all unpaid volunteers we deserve a free dinner for our service to the community. We had our dinner Tue after our annual meeting. We went to a local steakhouse (a rather high priced one too!). There were 11 of us and most everyone had the filet mignon; there was wine and mixed drinks and a variety of appetisers. Dessert was offered but no one had room for it. Believe me, no expense was barred -- the check had to be upwards to $500!!

If our assn gave the mgr a "holiday" gift totaling 20% of one month's mgmt fee, as Susan suggests, it would come to $1,376!!!

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

I agree, no association money should be used. Everyone is a volunteer.

You can donate your own funds, or ask others if they would like to donate some funds or host a holiday dinner for the board but don't use peoples dues to pay for presents for yourself.

RickW (Illinois)
Posts: 169

Posted:

I agree with the others about not using association money. We have given our property manager a small gift for the last 2 years. We are a board of 5 and each of us have contributed out of our own pocket. We never spent much, it was the fact that we took notice that made our manager feel good. In the past, its been flowers or plants, this year, given the economy, I'm thinking of suggesting a donation to a local food pantry in her name.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Sorry - THINK LIKE A BUSINESS!!!
Being a non profit has nothing to do with it.
If this PAID vendor goes above and beyond, then it is perfectly permissable to give an appreciation bonus.
Your budget should have a bonus line item in it anyway. (issued just like a payroll check0
Sorry, I believe in taking care of employees.

Let the comments follow . . .

MaryA1 (Arizona)
Posts: 7,043

Posted:

So where do you draw the line? What about the landscaper and, in our case, the guy who takes care of our lakes,etc., etc. Frankly, I don't think it's called for. If the board wants to show their appreciation they can do so personally. These people are contractors and get paid a good contract price to do their jobs. It's not the same as having salaried employees on a payroll. Even then, I don't know that Christmas bonuses are warranted. My husband worked for the same co. for almost 30 years and never got a Christmas bonus. He didn't even get a "thank you" when he retired!!

AnnaD2 (Florida)
Posts: 960

Posted:

My vote---out of pocket--period; if at all. We don't have a budget line item for "tips".

Everyone gets a "warm and fuzzy" feeling this time of year and would like to be generous to--well, everyone. Especially to those who have done a shining job (for which you pay them) and they've done it with a smile, no less. But you DO have to draw the line somewhere.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Susan, if we apply your admonition to "think like a business," then what really should occur is that the MANAGEMENT company give US a Holiday gift.

When I was in the corporate world, we NEVER gave "gifts" to vendors. Very inappropriate.

We would receive "gifts" from vendors who were very appreciative of having the opportunity to service our account throughout the year, and thus make a nice little profit off of us.

Even then, per our ethics and codes of conduct, those gifts had to be less than $50 in value.

In my husband's business, they send "gifts" to their clients and customers throughout the year.

With every repair, they include a king size bag of M&Ms. I have no idea when or why it started, but they've been doing it for several decades.

They have a line item for employee bonuses, but usually give those out in July instead of December.

To their customers, they do send a holiday "gift," usually a specialty fruit cake from a local high-end bakery that's supposed to have the fruit cake "to die for."

I can't think of a single time over the years where a CUSTOMER sends US a "gift," other than a holiday card.

DennisT (Ohio)
Posts: 109

Posted:

Sorry I'm late to the game but I've been watching the back and forth trying to decide whether or not to wade in. In general I don't see a problem with a nominal holiday gift as a token of appreciation. However it's important to remember that an HOA is a business and needs to operate as such.

First, if you are giving a gift, it has to truly be nominal and preferably non-monetary. Cash or cash equivalents can create tax implications for the recipient (Merry Christmas!). I used to work at a company that would hand out $100 gift cards as part of an employee recognition program. I hated it because odds are I would get a card for a place I would never shop, but then on my next paycheck they were obligated to treat it as a bonus and tax it accordingly. So not only do I have a useless gift card but my next paycheck was $35 lower.

On the other hand, a token gift that is not a cash equivalent such as a fruit basket wouldn't create those same concerns. I see no problem with spending $25 on a fruit basket or something similar to say thanks.

Second, although well-intended I would avoid accepting gifts or attending parties thrown by contractors or employees. While the intent may be totally wholesome, it could create the appearance of impropriety, specifically that of receiving an improper gratuity (a form of bribery).

Remember, as a board member you are part of the group that oversees these entities. What would happen if it was later discovered that the management company was getting kickbacks from vendors on association projects and along the way it came out that the company treated the board to lavish all you can eat, all you can drink Christmas parties? Don't think for a second that somebody wouldn't allege that the company was "greasing the skids" by buttering up the board members. Although the claim may be baseless it's very tough to defend yourself because your personal integrity is being called into question.

I realize that in 99.9% of all cases of holiday gift giving the intent is nothing but above-board. The issue is that this is a business relationship. Board members are elected to a position of trust. It is critical to avoid even the slightest hint of impropriety. To do otherwise opens yourself up to roads that you really do not want to travel.

AnnaD2 (Florida)
Posts: 960

Posted:

Dennis, I'm glad you jumped in. Very, VERY good points!

Michelle, you're right. WE (board members) get token gifts from our management company every year; pens, calendars, etc.

NoelleC2 (California)
Posts: 47

Posted:

Thank you all for your input!! Way more response than I thought I would get. Many of you are so right! What we did do and I think it's a great compromise is let the President who is the stickler buy the gift she feels is appropriate ( last I heard it was a plant ) and the rest of the board are doing something independent of that.. with their own funds. It's a win win situation.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

I am awed that there is even a question. Or more directly, if there is a question, don't do it. Why open this kind of door. The Board has no authority to spend association money for gifts, the board has authority to spend association money that is a direct benefit to the well being of the association.
When you spend money like this you are either trying to buy something or paying for something not authorized. You can't have a board agreement that an expenditure of funds might help, it has to be a decision that spending this money will help. And you don't know this about gifts. If it is a business and it's your money, spend away.
This has been discussed many times here and as far as the board spending money is concerned there seems to be circumstances that most feel are legit, like a annual cook-out to attract members, but the difference is the owners money is being spent on the owners. For years our Board has paid our manager a bonus. A new Board has come in, evaluated the system and decided.........no bonus.
They have this responsibility, in the past the board said it was deserved, and there may be some that think it deserved now.........the board speaks........no bonus.
The Board also rightly declared they can't spend money for a farewell gift. But will assist with their tools to inform the owners that they can contribute to a fund if they so desire and direct them them how to do it.

Now, doesn't all that seem proper.

JimW8 (California)
Posts: 14

Posted:

all the board members should vote and majority wins

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