Adams Stirling PLC


QUESTION: The board decided to reward two retiring directors with a $200.00 gift certificate. The treasurer used association funds without approval of the membership. Doesn't this constitute misappropriation of membership funds?

: No, there was no misappropriation of funds. Recognition in the form of a plaque or gift certificate is a small thank you to volunteer directors who put in a great deal of time and effort for their community. Such recognition does not require the approval of the membership--board approval is sufficient.

Some of the associations we represent give retiring directors plaques that cost $50 to $200. Some give outgoing directors gift certificates as well. There is nothing wrong with modest gift certificates. The larger the gift certificate, the more likely it will raise eyebrows among members. (Gifts by vendors fall into a different category.)


QUESTION: What's your opinion on board appreciation dinners? Is alcohol OK? What about significant others?

ANSWER: There is nothing illegal or inappropriate about using association funds to take a board to dinner once a year in appreciation for their service on the board. However, if the dinner is expensive it will become controversial and the more expensive the dinner the more controversial it becomes until at some point it crosses the line and becomes inappropriate.

Add alcohol, spouses and significant others to the dinner, and members will object as the cost of the dinner escalates. If the meal is modest and directors pay for their own alcohol and significant others, very few members (if any) will complain. If you plan to spend HOA monies on a dinner for the board, make sure you publish it to the members. Doing so will make it less controversial. If it appears that everything is being done in secret, members will think it scandalous. It is best to keep everything open and above board.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC