Monday, January 18, 2010

Can directors pay themselves?

A Condo Law reader wrote to me the other day and asked the following question:

"Can the board of a homeowners' association in Florida vote to pay themselves?"
The HOA Act (Chapter 720 of the Florida Statutes) does not prohibit (or even mention for that matter)director and officer compensation. Absent any prohibition against such compensation in the HOA's governing documents and depending on what other limitations those documents may put on the board, it could presumably vote to compensate the directors for their service.

Section 718.112 (2) (a) of the Condominium Act provides as follows:

Unless otherwise provided in the bylaws, the members of the board shall serve without compensation.

Thus, if the condominium Bylaws specifically permit the board to be compensated, they may do so.

Many owners find such compensation utterly objectionable. The feeling from this quarter is that directors should selflessly choose to serve on the board and that compensating for such service could lead to (a) abuse and (b) the wrong individuals serving on the board. In other quarters, the feeling might be that if the governing documents properly permit compensation it should be allowed especially given the significant time commitment required for board service.

No matter where your feelings lie in this debate, it is always best from a cost-savings standpoint if otherwise eligible and worthy candidates willing to donate their time to board service are permitted to do so.

For those of you wishing to see specific topics addressed in the Condo Law blog, please send your suggestions to me via email at dberger@kgrlawfirm.com. Your inquiries should be general in nature and not those which would require a review of your community's individual governing documents.

3 comments:

  1. This comment has been removed by a blog administrator.

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  2. Hello,

    I have something one step away from this. My condo HOA has "on staff" two repair people. One man is a member of the board and the other is his relative. Adding to the frustration of this, almost no repairs are being done with the exception of HOA owned units. Is this legal?

    Thanks,
    Rebekah

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  3. Rebekah,

    Board members cannot be paid for serving on the board but they can be paid for other services so long as they do not vote on their retention for those services or set their own compensation. It is up to the rest of the board to decide whether or not paying a board member and his relative makes sense and whether it is worth the PR nightmare that inevitably ensues from such decision.

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