Directors' 'awards' seem fishy
Q: I live in a retirement community. Each year the board of directors gives itself what it calls "awards" to the tune of about $4,000. The president gets about $1,000, the secretary about $850, and the other directors $425. I am wondering whether these "awards" are in fact compensation to which the board members are not entitled.
A: You need to refer to Florida Statute 718.504(21)(c) and the Administrative Code 61B-23.0022 that discuss the budget and necessary payment of IRS taxes, etc. Also review your unit documents to see if payment for services is allowed for board members. The Florida statutes define compensation as something of value received or the expectation of receiving something of value. Your board cannot just call a thing of value (say, $1,000) by another name (an "award") and avoid the conflict of compensation. My guess is that the board did not file a 1099 IRS tax report on the income. Check the IRS Web page at www.irs.gov/pub/irs-pdf/f1099msc.pdf for information on the reporting of the income and payments. State taxes also may be due on the payments.
Two signatures are better
Q: Our condominium manager has informed us that we must have two signatures on our checks or the surety bond will not protect the association. He has asked for a board member to co-sign each check. As the treasurer, I volunteered to do this. My question is, are there any liability issues for a board member who co-signs? Do you recommend that we do this?
A: All directors are responsible for the funds of the association. You have a fiduciary duty to the members to account for all funds and how they are spent. You have better control if you have two signatures on the checks. Also, verify all payments and have backup documents such as invoices, purchase orders and a comparison to the budget items. My guess is that you will not have more than 10 to 20 checks a week on average to track and verify.
Owner has right to see minutes
Q: I am on the board of a condominium. We have an owner who has requested copies of the minutes for the past two years. Do we have to give the owner copies of the minutes even if the board does not want to provide the minutes to him?
A: Minutes are official records and must be retained in a minute book for seven years like all other required official records. Any owner may request in writing to see the book. The board must schedule a time for the owner to see and read the book. If the owner wants copies, the board can charge a reasonable copy cost. If the owner would like to have the copies mailed, the association can charge for the postage. The section you need to read is found in the condominium act, Florida Statute 718.111 under Official Records.
Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115. Please include your name and city.