Can board members receive compensation?

Can anyone tell me if there are any laws regarding the compensation of board members? Our HOA (West Coast of Florida) has been running quite well. However, as the years pass, we have less and less homeowners volunteering. Now it seems our board is made up of the same people every year- may who would like to resign but can't bare turning our HOA over to a property management firm. We were thinking about tryng to come up with a compensation plan, in the range of a one to four hundred dollars per year, for those on the board.

Our attorney told us that this is illegal but his partner thinks there may be a way and he is looking into it. In the meantime, i thought I would ask here in case someone knew of such a plan.

It is hard to believe that we are expected to have board members to take care of things like the mail, the bills, entrance maintenance, annual billing, monthly newsletters, copy shop, office supply, holiday decorations, etc... and receive no funds and yet it is OK to spend 30k a year for a property management firm.

Thank you so much for your assistance.

Laine Stuart

Hi Laine,

I live on the East coast of FL

How many homes are in your Association?

Please print this message, and show this message to your attorney's.

Dear Attorney's for Ms.Stuart's HOA,

I posted the following on a HOA's bulletin board a couple of months ago:

This subject is about what my board of director's came up with as an insentive to encourage new volunteers to serve on the board, and to keep from hiring a management company. The President has used such a scare tactic for the past three years via September's newsletter, which is the month before our Annual Meeting in October.

My Board of Director's filed our amended articles of incorporation last April 12, 2004 within our local courts.

They amended the word dividends to read gifts. They board also raised our yearly dues to cover their yearly gifts.

Our bylaws say that, the board should have submitted in writing this amendment at a regular meeting. The bylaws meaning of regular meeting is our annual meeting, which is every October. This did not occur. Instead, it was announced as "just an idea only" in our monthly newsletter in December 2003. The President was to recieve yearly gifts of $1,000 and the VP $900 so on so forth.

At the board meeting in January 2004, which should not have taken place, was a motion that passed to form a committee to check into compensating the members of the board and their committee's. Only to have that committee go door-to-door for signatures in April. Majority of the homeowner's thought this was the committe who was going to check into find out how many homeowner's would be interested in compensating the board, and not signature votes. Our bylaws say, "when the motion was submitted in writing at the previous regual meeting, the next regual meeting October 2004, if a quroum of homeowner's exist, vote on the amendment motion. Then, that motion goes into effect at our annual meeting in October 2005.

"Amendment to Article XII: Dividends to Board Members
By order of majority vote this Article here by replaces the Current Article XII.

Changes to replace XII wil go into effect with the next Board 2004-2005 and gifts would be given at the end of the term at the annual meeting.

Article XII reads: There shall be no dividends paid to any of the members, nor shall any part of the income of the corporation be distributed to its Board of Directors or officers. .."

NOW, THEREFORE, said Articles of Incorporation are here by amended to read as follows:

Article XII

(1) President to recieve a gift of $550.00 per term: ..."

There is a Florida statue that says this in the title, "Payment of dividends and distribution of income to members prohibited..."

(1) A dividend may not be paid, and any part of the income or profit of a corporation my not be distributed, to it's members, directors, or officers. ..."
********************
Article XII BEFORE amendment reads: There shall be no "dividends" paid to any of the members, nor shall any part of the income of the corporation be distributed to its Board of Directors or officers. .."

Article XII AFTER amendment should read: "There shall be no "gifts" paid, and any part of the income or profit of a corporation my not be distributed, to it's members, directors, or officers. ..."

$7,500 was distributed at our Annual Meeting. I got a $100.00 check. I wrote "VOID" on the check. I do not beleive, board member's and their committee members who volunteer can be legally compensated.

Bottom Line: What my board of director's has done, they legalized gifts from the members of the Association by way of our annual dues to themselves, which were increased to cover their gifts. The amount for gifts which is income and profit for our Assocaition are now pre allocated for their legalized yearly gifts.

I have asked our Association's Attorney for answers. The President did not allow him to answer me. The letter with my check I received at the annual meeting says, "On April 7th 2004 (filed April 12, 2004), the homeowner's voted to change the articles of incorporation to allow a gift program for the homeowners. This was an incentive for homeowner's to get involved to do all of the work that is needed to keep the daily running of our homeowner's association in the hands of the homeowner's and not a management corporation. ..."

My questions are, in your opinion, what are your thoughts about this amendment? What can I do at this point, to get this amendment revoked and get the money back to the Association where it belongs?

I appreciate your time, and thank in advance for your answer.

Audrey
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to continue:

Homeowner's Association's Board of Director's as well as the members of their committees are and always have been unpaid volunteers. There aren't any Associations in the state of Florida that are allowed their volunteers to be compensated. However,whenever an Association is disolving then, volunteers can be compensated for services rendered. My I direct your attention to FS 617.0505.

As I write this to you, my HOA BOD's is in the process of rescinding their amendment. Because, IT IS ILEGAL, for them to have made such an amendment.

If there is an article written within Ms.Stuart's articles of incorporation which may say, “There shall be no dividends paid to any of the members, nor shall any part of the income of the corporation be distributed to its Board of Director or officers. In the event there are any excess receipts over disbursements as a result of performing services, such excess shall be applied against future expenses.” Then, the answer is absolutly not. No members of the board or the memebers of their committees CANNOT be compensated.

Again, there is that same statue of law FS 617.0505 that says in short, to compensate members of the Board via income to the corporation, is prohibited. I realize that, Chapter FS 720 takes precidence, but there is nothing in writing within this chapter about compensating board members.

In closing, I am a Board member from another Association before I came into my current Association. I am also a Veteran of the United State Army. My Army training really worked over time while I was a board member. In the Army we have rules and regulations. As homeonwers we are given legal documents to follow, and there are statues of law that says what you the Association can do and cannot do. I was the board member who did all the research. When there are words which say, "There shall be no dividends paid to any of the members, nor shall any part of the income of the corporation be distributed to its BOD or officers."... I keep going back to that same FS 617.0505 that says "prohibited" another word for no. The answer is simple, no means no, and I do not know of anyone being able to change no to yes. Have you?

Enjoy your holidays,
Audrey

Not compensation, per se. But I think an annual stipend for the purposes of covering normal expenses MIGHT work if not excessive. Why have a management company INSTEAF of a board??? I don't think that is right -- you NEED both. And the board should NOT turn over their responsibilities to the management company. You won't have good management if you don't have good ledership!!!!!

Broadside

Greetings!

Many thanks for your helpfulness! I am new to the internet and I am indeed finding great help. I took a good look at the forum (as I should have done prior) and I see that I am not alone in my question. May I request more of your expertise so that I can become better versed in HOA issues?

I see that your HOA has already traveled in the direction that we were thinking . Glad I have been forwarned! I do find myself with a dilemma. Somewhere it was mentioned that your board is "out of control". I would hate for our board to be considered the same. How do I avoid this? We did a mail survey and out of 419 homes, got 300 responses. 4 said no payment and 296 said that they wanted payment if it meant avoiding hiring a property manager. After one homeowner threatened a lawsuit, we dropped the subject of payment and decided it was time to hire a management firm. Now, we are getting so much ire from homeowners who insist that we try to find an incentive plan to keep our board as is, no management firm, because they say they would rather pay our board, than to pay much more for a firm. (we only pay 40.00 per year which is peanuts)With a firm, we will have to greatly increase our dues. So do we forget trying to find an incentive plan because of a few complainers (who also refused to volunteer) or should we persue what the majority wants?

How is your board? Are they just trying to stuff their pockets with cash for their own benefit? Are they like our board, just trying to use money to lure new volunteers so that the rest of us can finally take a break after so many years? I'm pooped but my conscience won't let me quit. I'm frugle, I guess you'd say! Do you know of another way to get folks to volunteer? I sure would like to know because I don't know what we are going to do.

Also, you mentioned that your group went door to door? Is this better than by mail? Maybe we should have done that. When your group went door to door, what did they ask? Was it for a vote or was is just opinion? Ours was opinion. I thought that since we got 296 cards liking the idea, I figured if we had a vote (guess that's not happening!!!) the votes would be similar.

Many thanks for your assistance and advice. My grandson says I should quit and relax but I like to keep busy.

Laine

We also have an almost impossible task of getting people to volunteer to do anything, even participate in a community bake off contest.

At our last annual meeting, which is only once a year, we had less than 10 percent of the homeowners attend. The only thing we can count on people doing is complaining.

Would it be legal to have board members in Florida and Maryland not pay hoa dues in lieu of getting compensation for serving on the board?

I am on the board in my hoa and before we hired a management company, I sometimes spent 40 hours a week working on the treasury stuff. This was done with only three people on the board. I also took off from work with the board president to take some delinquent homeowners to small claims court.

I and the other two members of the board hand delivered things to homeowners and used our own personal phones, homes, cars, utilities, computers, etc. to do the hoa work.

Hi Fran,

I can only speak for Florida and not Maryland.

Florida homeowner's are not legally allowed to compensate their volunteers with the dues they recieve for their Association. However, when doing things for the BOD's which is considered Association business, I believe, the volunteer can be compesated for gas milage, and I'm not too sure about that, I've heard of other Association's doing that, and that is the only legal thing in Florida that a volunteer member of the Board can be compensated for. The rest is standard and comes with the territory.

Please keep in mind, you volunteered to be Treasure. Therefore, you also volunteered your phone, volunteered your homes, volunteered your computer, etc. to the HOA work. Your gas milage to and from the courthouse should be compensated. Just the same as if you were picked for jury duty. Those people are compesated for their gas milage. Find the cost per mile they get, and go from there.

I was going to suggest to my HOA President, we should have the Annual Meetings during the day on Saturday. I say Saturday, because most of the homeowner's are not working, and can drive during the day, rather at night. I know some people can't see to drive at night, and there are those who get everything done before dark, and unless it's an emergancy, do not drive at night at all. I believe more people would attend, even if it were to just complain.

I hope I've helped you.

Have a great New Year!

Audrey

In our area of south Florida, a customary charge is anywhere from $10.50 to $12.50 per home depending on the services requested.