Q. I am living in a small complex in Massachusetts with 21 units. There are six residents serving on the board, and I have heard that they don’t pay the monthly maintenance fees. To me, this sounds like they are getting paid to do what I thought was a volunteer job. Is it legal to get compensated to be on the board and to not pay the fees? As a unit owner, do I have the right to see the association’s finances to find out if it’s true that these “volunteers” are not paying the fees in return for “serving” on the board?
A. “I note at the outset that this writing is not intended to provide actual legal advice,” says Gary M. Daddario, partner at Marcus, Errico, Emmer & Brooks in Braintree, Massachusetts. “The guidance contained herein is based on only the limited information provided. A more specific and thorough response taking account of any pertinent additional information should be obtained from an attorney providing actual legal representation. That said, although it is not ‘illegal’ for board members at a condominium to be compensated, it is not recommended.
“For one thing, it can provide a tangential motivation for people to serve on the board (money) and that doesn’t particularly help the association. Perhaps more important, Massachusetts law includes a case in which it was decided that board members of a condominium were not subject to the Unfair and Deceptive Business Practices Act. The court noted that volunteer association boards at condominiums are not in ‘business’ for purposes of the statute. However, the court noted that the outcome might be different if the board members were compensated.
“In the event that board members are compensated, it should be handled separately and not comingled with their condominium assessments. The Massachusetts Condominium Statute is clear on there being a single method of assessing units their proportionate share of the association’s overall annual budget. Unit assessments are based on the percentage of beneficial interest assigned to the unit. Even if the assessments and the compensation are set at the same amount and, thus, a ‘wash’ or a ‘net zero,’ it is more appropriate for the records to show all condominium assessments being levied properly, as well as any compensation paid to board members.
“Members of an association do have rights to review financial information and documents of the association. For a condominium in Massachusetts, I recommend reviewing the Massachusetts Condominium Statute (Chapter 183A of Massachusetts General Laws) and, in particular, Section 10 thereof. Although boards are allowed certain information on a confidential basis or as pertains to matters in executive session, generally an association’s bank account statements are available to a member and these do typically show income being deposited and expenses being paid.”