In this week's tip, we answer an HOAleader.com reader's email about their board hiring their former president at $15 per quarter hour. Apparently, the current board says this former president can advise the board because the president knows a lot about
the community.
To help our reader out, we've broken this down into two parts. Can boards do this? And should boards do this? The short answers are probably “yes” and “not if you can avoid it.”
We asked four experts about this situation, and all agreed that it would likely be
legal in their state for a board to hire a former president.
“In Florida, you can hire anybody you want to perform any service you want,” says Lisa Magill, of counsel based in Pompano Beach, Fla., Kaye, Bender & Rembaum. “Obviously,
that doesn't include services that must be performed by those with a license, such as a community manager.”
Ditto in California, says Adrian Chiang, an associate at Swedelson Gottlieb in Los Angeles who represents about 100 condos and HOAs
throughout California at any given time. “I think legally this is allowed,” he explains.
Matthew W. Heron, a member at Hirzel Law in Farmington, Mich., which represents hundreds of community associations throughout Michigan, says this would
also likely be permitted in Michigan. “I'd put it in writing and think about making sure there was no conflict of interest among current board members,” he says. “But I don't see that it would be prohibited outright.
“Even under Michigan's
nonprofit corporations act, a board is allowed to consider the opinions of others when making a determination,” explains Heron. “This person probably has information pertinent and relevant to administering the association. And if the hiring is done in good faith without a conflict of interest, I wouldn't expect it to be a violation of any norms or standards. But I would probably want it to be disclosed to the community so they could make their own conclusions.”
Arizona is much the same. “The board has the ability to hire and fire as they deem necessary,” says Melissa S. Doolan, an attorney at The Travis Law Firm in Phoenix, who has represented community associations for the last 15 years. “So, if this person was bringing
something to the table that would help the board perform its duties, I wouldn't see an issue with that.”