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HOA Board Member Compensation?

HOA Board Member Compensation?

Serving on an HOA board involves plenty of hard work and real devotion—enough that many HOA boards, particularly those that reach a certain size, begin to wonder if compensating their members might be the right thing to do. You can understand why they might feel this way. It makes sense to think that paid board members might be even more motivated than volunteers. However, compensating your board members is likely not the best idea—in fact, it is likely not even legal!

This is not true everywhere, of course, but, in most situations, association bylaws stipulate that board members are not allowed to be paid. So while there are exceptions to every rule, it is almost certainly the case that your HOA is not allowed to pay its community board members.

And there are other legal issues in play, as well. If you pay your board member, the IRS will count that as an income, which could conflict with the non-profit status of some associations. And should a lawsuit be brought against the association, a paid board member could be liable, where a volunteer will not be. Thus any HOA Board Member Compensation would not be worthy of an expensive lawsuit!

Serving on a board should be a reward unto itself; the volunteer gets to play a more active role in shaping and improving his or her community, which is the real “payment” of board service. Paying a member will surely lead to conflicts of interest, and is generally best avoided.

However, there is an exception, which is that reimbursing board members for expenses that they pay out of pocket is okay. For instance, if a board member volunteers to print flyers or newsletters for the whole community, it’s probably alright to pay him or her back for the printer ink and paper used. But understand that this is not a “payment” for services, just a reimbursement for expenses incurred in the service of the community!

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Bryan Kuester

Bryan Kuester

Bryan is the CEO of Kuester Management Group. He has over 15 years of managing community associations throughout North and South Carolina.

His specialties include Community Association Management - maintenance, budgeting for operational and reserve funding, long-range planning, covenant enforcement, amenity management, onsite management, large scale management.