California Association of Homeowners Associations Inc.
COMPENSATING MEMBERS OF BOARDS OF DIRECTORS
The time has come when Members of Boards of Directors should be compensated.
A quick review of the CC&Rs or Bylaws of many Homeowner Associations will disclose that board members are not to be compensated for their services on the Board of Directors. This policy was first conceived many years ago when the concept of community associations was still in its infancy; and perhaps there was good reason for it. The concept was that Board Members were to serve for the benefit of the associations and not for monetary gain; "it was a labor of love and devotion".
This concept has adequately served the associations in the past but that was then and times have changed. In most cases board members serve as well as could be expected. For the most part, board members are well intended and make decisions as best they can with the information and assistance available to them. The Davis Sterling Act was yet to be employed. Professional management was still in its developing years and community living was believed by most owners to be the stepping-stone between the apartment and the single family home. Little thought was given to the prospect that community living would one day be the preferred mode of housing for millions of Californians. Consequently, little if any, planning or preparation was given to the future needs of condominiums, townhomes and single-family units. Community living as well-known today was inconceivable those decades ago.
How times have changed! The Civil Code now contains the Davis Sterling Act, Adopted in 1985 (and amended almost every year thereafter) contains comprehensive laws to govern and provide order to community living. Laws affecting community living include the corporations code, Business and Professions codes and others in addition to the Civil Code, CC&Rs, Bylaws and Rules and Regulations. Community association administration today requires expertise in many fields in addition to the laws just mentioned. Boards of Directors must have knowledge of parliamentary procedure, accounting and finance, business and management skills, building construction and landscaping. Certainly a complete and comprehensive knowledge of these subjects is expected of the managers contracted to assist the Board, but notwithstanding, board members to be effective need to have some understanding of these laws and topics in order to be effective.
The business of conducting the association's business however, is serious, no longer just a "labor of love." Millions of housing units, millions of people, billions of dollars in budgets and property values demand that boards of directors be qualified to over see the affairs of their association. Board Members are expected to be qualified and capable of performing the required duties; and the penalty for failing to do so is serious indeed. But few homeowners are interested in volunteering their time
Board members are voted into office by their association members. A slate of homeowners will agree to run for office and be nominated as a candidate. For some associations the slate is replete with qualified candidates. However, for most associations only a few homeowners may be interested or willing to take the job and they often have to be persuaded, convinced or pressured into taking the job. No misunderstanding, there are some board members that thrive on the opportunity to be at the helm. One board member had business cards printed, "President of the Board," it stated. Probably the most important position he had ever held and he was, all things considered, a good board member.
The problem resides in the fact that too few really qualified homeowners are willing to serve on the board. Their time is too precious to go to meetings only to hear complaints from disgruntled homeowners - the satisfied homeowners seldom attend any meetings. With so much at stake, we need to attract the best and most qualified homeowners to administrate the affairs of the associations. In today's environment, this can only be accomplished by compensating Board members for their time and services. Make it worth their time and they will attend and they will serve and all homeowners will benefit from qualified leadership. When qualified homeowners are making the decisions there will be fewer problems, greater property values and greater enjoyment in community association living.
Compensating boards of directors is greatly needed. The amount of compensation should be a decision for each association. How much should they receive, perhaps the equivalent of their association dues is a place to start.
Richard S. Monson MBA
President of the
California Association of Homeowners Associations