If you’ve ever served on a board for a condo or HOA community, you can easily appreciate how much work is involved. Board members are elected volunteers, meaning they do not get compensated for any of their work.

If they did get paid, the Foundation for Community Association Research estimates that their hourly wage would amount to roughly $31.80.

Table of contents

• Reasons why board members are not paid
• Potential benefits of paying board members
• Board members can be reimbursed
• Small rewards may be acceptable

While most communities agree that board members should not be paid, would compensation encourage more people to run? Would money motivate them to do a better job?

Though there is nothing to indicate a change is coming, it doesn’t hurt to think about what could happen if board members were paid for their work.

Reasons why board members are not paid

Bylaws

In most cases, there is nothing strictly prohibiting condo and HOA board members from being paid, but the majority of association bylaws have a clause that says something like “the board shall serve without compensation unless owners vote to change that.”

In short, the primary reason board members are not paid is because community bylaws state that they cannot be compensated for their work.  

Indemnification

One theory as to why this bylaw was created is that the relatively broad immunities directors are given are necessary because they are volunteers. Coverage may not be as comprehensive if this was considered a job instead of a volunteer position.

Qualifications

Furthermore, paying directors raises questions about the need for licensure under the statutes governing community association managers. While some states and provinces require board members to complete educational courses, others allow volunteers to serve with no training. Requirements would need to be more stringent if the position was paid.

Conflicts of interest

There is concern that some individuals would run for the wrong reasons. While this problem exists today (a handful of owners want to control rather than govern their community), it would likely be amplified if money were offered to board members.

Similarly, there is a concern that they may be less thoughtful about assessments. Board members have to pay assessments just like everyone else. But payment would effectively offset those costs. As such boards might be less hesitant to increase fees by more than what is required.  

No payment standards

Would a board member who serves a community of 50 people earn less than someone who serves a large community of 3,000? Would board members receive an annual salary, or would they be paid by the hour?  Should all board members receive the same pay?

These types of questions would need to be addressed, and could create additional problems for governed communities.

Different relationships with other owners

Board members may be treated by other members like employees instead of partners. There is also a potential for more legal issues when owners think a board member has done something strictly for the money.

Potential benefits of paying board members

Easier to attract candidates

Numerous communities struggle to fill positions. In extreme cases, if the association can’t find enough volunteers, they have to either change the minimum board member bylaw at an annual meeting (if that is possible), or request a receivership. Members must pay a receiver for their work, and that can cost thousands of dollars each month.

People would be far more motivated to serve their communities if they were compensated for their work. For example, a retired bookkeeper may not want to volunteer their free time when they could be playing golf. But they would serve as treasurer if they were earning a bit of extra cash in return. That money could be used for medical expenses, trips or gifts for the grandkids.  

Plus, some would argue that paying members who have a vested interest in the community would make more sense than paying a receiver who doesn’t belong to the community.   

Better level of service

Receiving payment could also motivate board members to be extra diligent when reviewing contracts, or more responsive to emails from owners. If members want to be re-elected, they must demonstrate that they can do a better job than other candidates.

Board members can be reimbursed

Board members are not paid, but there may be instances where they need to be reimbursed for out-of-pocket expenses. For example. if they had to drive to an offsite location to attend a meeting, then they may receive gas money for the distance they traveled to and from the meeting.

Small rewards may be acceptable

Some condo and HOA communities do support gifting board members “free” dinners or similar tokens of appreciation. As an example, board members might each be entitled to a $25 meal if they attend a long or multi-day board meeting.

The catch is that there must be a bylaw confirming this arrangement. Owners can vote to pass this type of bylaw if one does not currently exist.  

As for gifts, individual members are entitled to give gifts to board members as a way of saying “thanks.”

Conclusion

While it would be a nice perk, most community members agree that board members should not be compensated for their work. The potential issues and conflicts are simply too great.  

So why do board members bother to do so much work for free? It’s for the same reasons that other people volunteer. They care, and they want to make a positive difference. In this case, the volunteers want to protect their investments, their homes, and keep their buildings or neighborhoods safe and happy.

It’s true that board members sacrifice a lot of time to manage their communities. But in return, they get to make some key decisions for their communities. Moreover, they might gain new skills like project management and budgeting, and they will become much better communicators and negotiators.

It’s not a role that everyone can or should do, but it’s certainly a fulfilling one.