From Davis-Stirling.com Newsletter. Our posts for Davis-Stirling usually regard laws around condominium conversion, however this one is more of the educational variety.

QUESTION: Our board president for the last 9 years has ALSO been the manager of our HOA. He RULES the board and claims the board appointed him as manager. He gets $30,000 a year. Since we are a nonprofit corporation I thought directors are NOT supposed to get a salary.

ANSWER: Undoubtedly his salary is earned as a manager, not as a director. However, the two roles are hard to separate and this creates significant conflicts of interest. It is not “illegal” for the president to also be the paid manager but it is an unhealthy arrangement. If the membership were smart, they would end the arrangement by (i) removing the manager from the board or (ii) replacing the manager with an outside management company. If the membership is content with the current set-up, at some point they will suffer the consequences and will have no one to blame but themselves. As de Tocqueville observed, “In a democracy, people get the government they deserve.”