What's the difference between:

What's the difference between what a Board Member or President does and what a Property Management (company) does?

I am the only active board member of a small HOA. I pay another person to manage the accounts, send dues and fee notices, etc.. I take care of getting the mail, sending the mail, handling complaints, writing the complaint letters, dealing with the bank on our accounts, hiring landscapers and firing landscapers, doing audits of the neighborhood for issues, etc..

According to our bylaws (and state law) i am not allowed to be compensated for my duties as a board member. However, can i be compensated for the duties I perform that otherwise we would hire a property management company to do? What's the difference between the three "entities": property management, unpaid board member, and working president doing property management job?

Thoughts?

Simply, no you cannot be compensated regardless so long as you serve on the board.

Most CCR's have that clause because there would be a conflict of interest in many arenas. For instance, how do you decide what to pay yourself? What if someone thinks you are overpaid? or incompetent? or writing extra checks to yourself? There would be no checks-and-balances.

Don't get me wrong...i am not insinuating that any of that may be true. I don't even know you! But, even if there is no wrong doing and you have the best of intentions it would not work out (even if you overlook that your CCR's state that Board members cannot be compensated.)

My question is...do you desire to get paid because you are doing so much work (I hear you..I manage our HOA too)or so that you don't have to pay a management company and can keep it 'in house'?
Lisa

our bylaws state we must have a minimum of three board members. we elected three members about 5 years ago. Since then, one of them failed to pay his assessment on time and was removed from the board (another by law). So that leaves two of us. We have not had an annual (member) meeting in three years, because we cannot get a quorum of members (in the past) or manage to get anyone interested to run for the board (and thus, cannot print an absentee ballot, as required by law). Without being able to have a meeting, we can't elect new board members, so... the two of us are stuck. There are no other volunteers to be on the board (thus, no one can be nominated or appointed).

As for the potential problems, I truly see them: conflict of interest, embezzlement fears, etc.. They are real concerns with a board of one. I could say that with an open bid process and open records and books, I can eliminate some of the issues. I can also guarantee that no one would do this job for less than me, which makes the bid process rather moot from that aspect. I can also say that since no one in our community gives a hoot, I could probably walk away with the bank account and they wouldn't notice.

So if i can't hire myself to do the job, I guess i could set up a friend as a "manager", and pay him to do it. That just seems more underhanded than doing it myself.

Does anyone know what a board or association can do in this type of situation; where they don't have a board the size their bylaws dictate and can't fill the size? What about not being able to conduct a meeting because of the quorum issue? There must be a fall back for this type of a situation in Robert's Rules of Order; I just can't find it??

Sure, i can appoint someone to the board. However, every single person in our association has already indicated they will not serve or do anything, so what's the point in appointing them?

Several years ago, we used a managing company. They did the exact same things I am doing now for free, and charged our association over $1000 a month to do it. During our time with them, we drained a $15,000 surplus that had been built up, and were on the verge of raising the assessments in order to pay for managing the money. We elected a new board, fired the managing company, and did it all ourselves. We kept the dues at their "original" level, hired a better landscaper, and now have once again built up a $12,000 savings account.

Aside from taking money and overcharging, what is the benefit of our association hiring a managing company?

Our by-laws have nothing about a reduced quorum, so we are stuck: can't send an absentee ballot without names, can't get anyone to even NOMINATE another person, let alone actually have that person run or hold the office. So, without a nomination, we can't do absentee ballots. Without ballots, we cannot hold a legal annual meeting. Without an annual meeting, we cannot change the board. And thus, I get to be president for life!

Roger, there is no way, as a board member with fiduciary responsibility to the association, i could with good concience advise the association to hire someone and raise the assessments just to have someone hired to collect the newly raised assessments. That's all a managing company does for us, collect our dues, write four checks a month, etc.. They can't enforce our rules, the board does that. And I can go to the post office, write four checks a month, etc. for much less than anyone else would charge.

I agree. Given you are over-functioning as the sole Board member to save money for the association, and, ultimately, yourself as a dues-paying member, this is honorable. The directive of a Board member is not to 'do' but to make sure the tasks are done. Besides the very legitimate point of breaking your bylaws by functioning as multiple officers of the corporation which could place your HOA in violation of state and federal laws, depending on your Articles of Incorporation. Isn't this true?

Interesting... we do have a clause preventing multiple offices, except for secretary and treasurer. they can be the same. However, since that person doesn't do anything, it is left to me to do the actions necessary to keep the association solvent.

Ironically, I sign the checks to the landscaper and city, etc.. Oddly enough, according to our bank, i am not a signator on the account. However, that hasn't seemed to bother a single check in 5 years, all of which have been cashed by the bank. THe bank will not tell me who the signator is, of course, that's confidential. I suspect it is some previous president or treasurer, years ago, who opened the account. However, i have no way of knowing, or finding out. The bank will only talk to the signator, and without knowing who that is, we can't go down and add a new signator to the account. So, we keep depositing money and signing checks, and the whole thing runs merrily along.

So tell me, if this house of cards comes tumbling down, what will happen? Can the state shut us down?

a meeting with the homeowners? lol... they won't show up. Since 2000, we have had a total of 11 people at ALL our annual member meetings, combined! I cannot even get 4 people to show up anymore.

I tried the "money" threat as well, with a meeting held to discuss spending $15000 on our landscaping, and raising assessments in order to do so. That meeting had two board members, and three homeowners: and one of the homeowners had just sold their house, and was moving out of state. They just were curious and wanted one last say about things.

I think I will just appoint myself treasurer, resign as president, and keep going. that way, i can sign the checks.

thanks for the advice, but most of it is undoable at this moment. Apathy by the homeowners beats almost any strategy.

If i resign, then no one will run the association, and it will simply stop paying bills, and get into financial trouble. we will default, the city will likely sue us, etc..

I cannot appoint anyone, as they have all stated they have no interest in joining the board. If elected, they will not serve. They will either resign, or if i won't accept a resignation, they will pay their monthly assessment late, and that automatically takes them off.

I cannot add anyone as a signator agent on the bank account, because I am not a signator agent on the bank account. Only someone already on the account can add someone else, and we have no way to find out who is on the account.

I guess i could continue to call meetings every week or month, and someday hope I get a quorum. That's about all i can do, i guess.

laziness, apathy, and ten years of "if my rates don't raise, who cares". Previous boards have been inneffective, and future boards are likely to be ineffective. There is no reason to volunteer onto the board, since there is nothing the board can do except deal with complaints. And who in their right mind would volunteer to deal with complaints just for fun?

I second that motion!