The question of whether Homeowners Association (HOA) board members receive payment for their service is frequently searched by residents and prospective board members alike. Generally, the answer is no; board members serve their communities as volunteers, without receiving a salary or stipend for their governance duties. The board, typically composed of fellow homeowners, functions as the association’s elected governing body, responsible for financial and operational oversight. This volunteer structure is the default expectation for community association leadership.
The Standard: Volunteer Service
The fundamental principle governing HOA board service is volunteerism and the associated fiduciary duty. Board members are legally considered non-compensated agents of the association, meaning their actions must be solely for the benefit of the community, not for personal financial gain. This expectation is deeply embedded in the structure of non-profit community governance, establishing a standard of stewardship over the association’s assets.
Serving on the board is viewed as an obligation of property ownership, a commitment to maintaining the quality and value of the shared community environment. The board’s authority, derived from the association’s governing documents, rests on the premise that members are acting in good faith without the incentive of payment. This non-compensated status helps to reinforce the board’s objective to manage the community in the best interests of all homeowners.
Distinguishing Compensation from Expense Reimbursement
It is important to clearly distinguish between receiving compensation and receiving reimbursement for expenses. Compensation involves providing a salary, stipend, or any form of direct payment for the time and effort spent performing board duties. Reimbursement, conversely, is the repayment for out-of-pocket costs legitimately incurred while conducting association business.
Reimbursement for reasonable and documented expenses is a standard and accepted practice, even for boards composed entirely of volunteers. Common examples include the cost of postage and printing for official notices, mileage for travel to required training, or the purchase of office supplies. These payments merely restore the board member to their prior financial state and are not considered a form of income or compensation for service.
Legal Authority: State Laws and Governing Documents
The definitive answer regarding a board member’s eligibility for payment is determined by a layered legal structure, starting with state law and followed by the association’s governing documents. State statutes, such as the Uniform Common Interest Ownership Acts (UCIOA), often prohibit or severely restrict the payment of board members for their regular governance duties. These laws generally assume a volunteer model unless explicit authorization is provided.
The association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and its Bylaws provide the secondary, localized authority. These documents must be consulted to find the specific rule for any community, and they usually reiterate the state’s stance that board members serve without pay. Any provision allowing compensation must be explicitly stated in the governing documents and must not violate prevailing state law, which often requires a high threshold for approval, such as a vote by the general membership.
Exceptions to the Rule
While the volunteer model is the norm, a few narrowly defined exceptions exist where a board member may receive funds from the association.
Stipends for Service
One rare exception is when the governing documents explicitly authorize a small annual stipend for board members. This stipend is typically capped at a minimal amount to cover incidental expenses or acknowledge the time commitment. Such a provision is unusual and must be clearly detailed in the Bylaws or CC&Rs, not merely adopted by a simple board resolution.
Payment for Specialized Services
A more common exception involves payment for specialized services rendered outside the scope of standard board duties. If a board member is a licensed professional, they can be compensated at market rates for performing contractor work for the association, such as reviewing a contract. The individual is paid for their specialized trade, not for their role as a director, and this payment must adhere to all conflict-of-interest policies.
Ethical and Financial Risks of Paying Board Members
Introducing compensation for board service, even when legally permissible, carries several ethical and financial risks that can negatively impact the community. Paying a stipend can create a perception of self-dealing or conflicts of interest, leading to community dissatisfaction and distrust. Homeowners may question if decisions are being made for personal gain rather than the association’s welfare, which can damage the volunteer spirit and discourage future homeowner involvement.
From a financial perspective, any stipend or salary paid constitutes taxable income, which must be reported to the Internal Revenue Service (IRS) by both the recipient and the association. The association may then be required to manage payroll, withhold taxes, and issue W-2 or 1099 forms, adding administrative complexity and cost. Paying board members can also incentivize individuals to seek the position for financial reasons, potentially prioritizing their payment over the long-term financial health of the community.