Thinking about joining an HOA board? Read on to learn about the financial implications of the position.
Serving on an HOA board provides an opportunity to bring change to your community and ensure it’s a good place for everyone to reside. Additionally, it’s one of the best ways to interact and get to know your neighbors. But what if you want to serve on the HOA board for financial compensation? Will you get paid?
Let’s dive in and find out.
Do HOA Board Members Get Paid?
HOA board members serve the association without getting paid unless the bylaws state otherwise. With some exceptions, members serve as volunteers driven by their desire to serve the community. As a result, they can’t receive a salary, compensation, or any form of financial benefit.
Additionally, serving on the board means you have a fiduciary duty to the association. You’ll be responsible for the funds the HOA spends on the community’s behalf. Getting paid would create a conflict of interest since the board holds the power to raise the compensation at any time. This would result in questions like “are members serving their best interests or those of the community?”
State laws and the association’s governing documents stipulate whether members can receive compensation. In most cases, they outline how the association can hire professionals like attorneys and management experts to help with complicated tasks.
What are the Benefits of Serving on an HOA?
While you usually won’t receive any financial perks as a board member, serving on an HOA is richly rewarding. It offers a valuable opportunity to volunteer and bring real change to the community. This could give you an upper hand in the future when applying for a board seat elsewhere. Volunteering proves you aren’t solely money-driven but someone who’s committed to serving and giving back to the community.
Additionally, volunteering offers social, emotional, and mental benefits. Volunteer work improves mental health by increasing positive feelings that reduce stress. It also provides a sense of purpose that could accelerate self-esteem and life satisfaction.
What’s more, serving on the board provides an opportunity to make new contacts and friends through regular meetings.
Frequently Asked Questions
Do HOA Presidents Get Paid?
HOA presidents usually don’t receive any special perks or financial benefits. While you don’t get a paycheck as the HOA president, you can bring real change to the community, which is fulfilling and promotes mental, emotional, and social benefits.
How Much Do Directors in a Board Get Paid?
Having a seat on a corporate board of directors can be a lucrative deal. The actual compensation depends on the organization and position on the board.
According to Veritas, an executive compensation consultant, a director’s annual paycheck on higher-paying boards can range between $300,000 to $500,000.
The most lucrative seats go to board members at S&P 500 companies. According to Reuters, compensation at these organizations was $304,856 in 2018, and the figures continue to rise.
Apple Inc. pays each non-employee director approximately $250,000 in terms of shares per year. These directors also receive a $100,000 annual cash retainer. The board chair—an executive director—gets an extra $200,000, while the audit committee chair receives an additional $35,000.
On the other hand, Walmart’s 2020 proxy statement revealed that the multinational retail corporation pays each outside director an annual base compensation of $175,000 in stock grant and a $100,000 yearly retainer. The lead independent director gets an additional $35,000 annual retainer, while the audit committee members receive an extra $25,000.
Serving on an HOA board can help you gain the needed experience to serve on corporate boards that pay members handsomely. It also enables you to build a board resume that positions you as someone who’s not just money-driven but committed to serving and delivering results.
Additionally, what you learn from other HOA members can better prepare you to serve on well-paying boards. HOA board service paints a clear picture of servant-leadership, which shows you can prioritize an organization’s best interests over yours. This is a great quality of a board member.
What are the Requirements for HOA Board Members?
To serve on an HOA board, you must consider whether you’re eligible for a seat on the association. Your HOA’s governing documents determine mandatory and optional qualifications to join the board. Common HOA board member qualifications include:
- You must be a member of the association. Several states demand that all HOA board directors must belong to the community as members or residents.
- You often can’t serve the same HOA board with someone you’re related to by blood or marriage. This requirement varies by state and the association’s bylaws. In Texas, for example, two board members of an association with over 10 lots cannot live together at the same residence.
- Criminal convictions may prevent membership. Some states prohibit someone with a past conviction from serving on the HOA board. For instance, Texas law says that a person with a past conviction concerning moral turpitude within the last two decades cannot and will never serve on an HOA board. Some states prevent HOA board members from having felony convictions.
About The Author
- Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.
- Board Management Software2023.02.03Board of Directors Requirements: ISO 27001 Compliance
- Board Management Software2023.02.01Board of Directors Requirements: SOC 2 Type II Compliance
- Board Management Software2023.01.27Q&A: Are Committee Meetings Open to the Public?
- Board Management Software2023.01.23What is a Medical Advisory Board? (Overview, Roles, and Responsibilities)