Help w/Interpretation

Started by HappyJ • 11 replies • 1220 views

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HappyJ (Tennessee)
Posts: 21

Posted:

Our bylaws state that The Board of Directors shall consist of 3 members , each of whom shall be a member of the association Directors shall serve without compensation
It also states the officers of the corporation shall be eleted by the Directors from among the members of the Board of Directors and shall be president, treasurer, and secretary. Then it further states that the Board of directors may appoint other officers and agents as it shall deem necessary who shall be appointed for such terms as determined from time to time by the Board.. Oddicers compensation if any shall be fixed by the board of directors

I interrupt this to me that our 3 member board wears 2 hats as officer and director and thus should not be compensated.. Everyone else on the board interrupts differently.. any help would be appreciated

FredS7 (Arizona)
Posts: 927

Posted:

In my mind this text is about as ambiguous as it is possible to be.

It is possible to read this that the board member cannot be compensated for being a board member but he CAN be compensated for his role as an officer.

I think you should resolve, by majority vote, what the preferred interpretation is and put it into your rules.

One thing that is not ambiguous. The text does not rule out compensating an person, not a member of the board, who is appointed to be other than president, secretary, or treasurer.

I'll bet someone did an ill-thought out revision of rules for an association with a larger board.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Officers compensation - if any - shall be fixed by the board of directors

This statement gives the board the power to compensate officers, usually treasurers or secretarys, for their workload. But it does say "if any," which means it is not mandatory, but up to the descretion of the board.

Of course, this approval would be by motion and the amount set by the board.

(Seems pretty straight forward to me. )

FredB4 (Ohio)
Posts: 375

Posted:

Your bylaws are similar to ours. I take this to mean that 3 board members shall be elected from the membership and each of the board members shall take a position... President, Secretary and Treasurer. Usually the President is the one who gets the most votes. Non of these three can be compensated. Compensation of this nature is generally considered illegal.
I have never hear of any bylaws or state laws that would allow compensation for a board member or "officer" of the association.

We also have the option of appointing assistant officers such as an assistant treasurer or VP from the membership, but they can not be compensated either.

The way it is written (quite confusing) it sounds to me like this refers to hiring "agents" who could be compensated like a professional accountant.
They would not be part of the Board of Directors and would be eligible for payment depending on their qualifications and duties.

also,I would think that if you have a management company these additional "agents" would not be required.

FredB4 (Ohio)
Posts: 375

Posted:

I should also mention that as a member of the BOD you also are an "officer" of a non profit. There seems to some confusion over the terms in your bylaws.

FredS7 (Arizona)
Posts: 927

Posted:

> I have never hear of any bylaws or state laws that would allow compensation for a board member or "officer" of the association.

Well you just saw it because

> officers of the corporation shall be eleted by the Directors from among the members of the Board of Directors and shall be president, treasurer, and secretary

and

> the Board of directors may appoint other officers and agents as it shall deem necessary

and

> Oddicers (sic) compensation if any shall be fixed by the board of directors

The "other" in "other officers" presumably means "other than the president treasurer and secretary" so they are not just referring to, say, an accountant.

(It is possible that an exact quotation would be less ambiguous.)

> Non of these three can be compensated. Compensation of this nature is generally considered illegal.

Can you cite a law? I think it may be highly inadvisable to pay officers, but I don't know that it is illegal.

FredB4 (Ohio)
Posts: 375

Posted:

FredS,

ouch :-)
Your CC&R's are legal documents, not guidelines and not following them is illegal and opens the association up to legal action.If something is ambigious or confusing, as this appears to be from the wording of the post, then a lawyer should be consulted.

Like you, I was giving my opinion based on my years on the BOD and I did note that the part of most importance was very confusing or most likely, something is missing from the post.

I still suggest that HappyJ proceed with caution. It makes no sense that the three top "officers" must work without compensation and other "officers" be compensated.
What other "officers" do you think should be compensated if not for professional work like accounting ?

HappyJ (Tennessee)
Posts: 21

Posted:

Please let me clarify
We have NO amenties, 208 single family homes... only thing we have is several acres of land, street lights, and an entrance sign.. We have a mgmt company (financial only) So the board reports violations, choses landscaper, and makes decisions.. Now some officers want to be paid to meet with landscaping vendors or any other thing they may do besides attend board meetings.

FredS7 (Arizona)
Posts: 927

Posted:

> Now some officers want to be paid to meet with landscaping vendors or any other thing they may do besides attend board meetings.

Just say no, and then elect new ones??

BradP (Kansas)
Posts: 2,640

Posted:

Happy...you are correct

FredB4 (Ohio)
Posts: 375

Posted:

They should not be receiving compensation for anything they do.

BradP (Kansas)
Posts: 2,640

Posted:

Happy...you may want to visit the Tennessee state statutes and see what they think about it...

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