Condo Media - January 2018 - 47

Helpful Advice Compensation
While this might seem like a great
reason to pay board members, as always,
there is another side to this coin. What
if people started to run for the board
strictly because of the compensation?
In a rare moment of unanimity, all
condominium attorneys and related
professionals share the opinion that
no one should run for or serve on a
board to advance their own agenda. It is
hard to view serving on an association
board solely to receive compensation
as anything other than (at a minimum)
satisfying a personal agenda item, if not
the entire agenda.
How would the compensation be
determined? Waiver or reduction of
common area assessments? Hourly
rate? Flat fee? Would the president or
chair be compensated at a higher rate
than another officer? Would the board
quarrel among themselves as to who has
done more work and therefore deserves
more compensation? And, if the manner
of compensation is to credit common
fees, just think of the negative impact on
the community if the board votes to raise
common fees!
It is unfortunate enough that there
are associations that have an "us versus them" atmosphere; a paid board
(whether through common fee adjustment or cash payment) might increase
the already perceived divide between the
board and the community it serves. And
don't forget, any form of compensation is
going to increase the amount paid for accounting services for tax preparation as
the board members will need to declare
that income on their tax returns even
if it is in the form of credit or waiver of
common fees.
(Since I am a lawyer I feel compelled
to give some free legal advice here.
Massachusetts law is pretty clear there
can be no waiver, deduction, or offset in
payment of common fees so such a form
of payment is impermissible.)
VOLUNTEER PROTECTIONS
One of the most significant arguments in
opposition to payment for board members is the protection afforded by virtue

of their volunteer status. Many people
are concerned about serving on boards
because of their fear of being sued.
Leaving aside the various factors that
would be taken into consideration in
determining liability when the board of
any non-profit, let alone a condominium
board, is sued, it is difficult to deny that
receipt of payment removes the recipient
from volunteer status. While there are
numerous laws that protect various volunteers serving on boards or otherwise
volunteering for non-profit organizations, there are no laws that specifically
include condominiums within the list
of protected non-profit organizations.
Removing the layer of protection that
their volunteer status affords them could
leave them vulnerable to personal liability. While most governing documents
provide that the board is indemnified by
the association for their services (other
than criminal actions, gross misconduct
and other egregious acts) there is another protection that board members'
volunteer status affords the association
as a whole.
In 1999, in the matter of White Cliffs
Community Association, Inc., vs. Ranieri
in ruling on a counterclaim sought by a
unit owner against the board for violation of the Consumer Protection Act
(the "Act") arising out of imposition of
fines, failing to supply information and
other board actions, the court held as a
matter of law that the Act did not apply
to a dispute between an association
member and the association's board.
One might ask if the documents indemnified the board anyway, why this should
be so important. The simple answer is
that if a board were subject to the Act
and found liable for its activities, a judgment could include triple damages and
attorneys' fees to be paid to the plaintiff.
And who supplies the funds to indemnify
the board? It would be the unit owners,
through their common fees, which very
well might need to be increased to pay
such a judgment.
While the trial court's decision in
White Cliffs was an important one, in
2002 the Supreme Judicial Court closed

the door on any fear of boards for potential liability for consumer protection
violations. In Office One, Inc v. Lopez,
437 Mass 113 the court, in holding that
the board was not engaged in trade or
commerce, stated that "the trustees,
however are members of a volunteer
governing board of the organization of
unit owners" (emphasis added).
While I (and all association attorneys
I know) do not think it is wise for the
board members to be paid, nevertheless,
it is hard not to be sympathetic to the
requests for compensation, particularly
when viewed in light of all the work they
do for their communities. At the end of
the day, the scales tip against the practice.
■ ELLEN SHAPIRO, ESQ., EBP,
IS A PARTNER IN THE LAW FIRM
GOODMAN, SHAPIRO &
LOMBARDI, LLC.

January 2018

47
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Condo Media - January 2018

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