HOAleader.com - Tip of the Week - December 3, 2010
Published: Tue, 11/30/10
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What to Do When Members Demand HOA Salary Information
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In this week's tip, we tackle the sensitive question of how to
respond when your owners--who are entitled to review association
documents--ask what the association pays its staffers.
When that happens, your first consideration should be whether
your state requires that disclosure. "Most states don't require
that information be presented to the members," says Debra A.
Warren, principal of Cinnabar Consulting in San Rafael, Calif.,
which provides training and employee development services to
community association management firms and training and strategic
planning sessions for association board members. "In those states,
members are entitled to financial reports, and there's a line
item that says 'payroll.' Associations don't have to go beyond
that."
California, however, is one state that does require the
disclosure of association salaries. Its law requires HOAs to
provide such information if requested by homeowners, but the
details about an HOA's requirements are sketchy. So after you've
checked your state laws, ask your attorney whether there are any
ambiguities about which you should be aware.
"California's statute has some internal conflicts," says James R.
McCormick Jr., a partner at Peters & Freedman LLP in Encinitas,
Calif., who represents associations. "You definitely want your
legal counsel involved so you're not tripping over anything."
The general rule in California is that you must disclose. "The
California Davis-Stirling Act pushes for a lot of transparency,"
says Robert M. DeNichilo, an attorney at DeNichilo & Lindsley LLP
in Irvine, Calif., who specializes in representing community
associations. "While members' right to information isn't unlimited,
they do have pretty broad access to information. Under the law,
there's a category of information identified as not available for
review, including things like personnel decisions. But there's an
exception for salaries. So while the law doesn't specifically identify
documents related to salaries as something members can review, the
exclusion of salaries from the list of things members aren't entitled
to review means members are entitled to review personnel salaries."
However, you don't have to provide every detail related to your
employees' salary information, and you can create a policy that helps
owners understand the sensitivity of their request. To learn more,
see our new article, http://www.hoaleader.com/members/514.cfm.
Best regards,
Matt Humphrey
President
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This week's tip is a primer on recognizing when your HOA has gone
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< http://www.hoaleader.com/public/510.cfm >
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Here, we answer those questions.
Click here to read full article:
< http://www.hoaleader.com/members/511.cfm >
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Click here to read full article:
< http://www.hoaleader.com/members/509.cfm >
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