Adams Stirling PLC


QUESTION: Can a homeowner who is not a board member assume duties as treasurer and approve payment of bills?

ANSWER: If your bylaws do not require that the treasurer be a board member, then the board can appoint a non-director to be treasurer. In addition, the board can delegate to the treasurer the authority to pay bills. Allowing a homeowner who is not on the board to be treasurer is not necessarily bad. It may be that the non-director is a CPA whereas none of the board members has any financial training. In that case, allowing the CPA to serve as treasurer benefits the association. If the membership wants to impose requirements that all officers be directors, it can do so by amending the bylaws.

Delegating Authority. When it comes to paying bills, the board can empower the treasurer to pay routine, recurring expenses such as utility bills and insurance premiums. As a safeguard, the board can set a dollar limit on the treasurer's payment authority. However, the board is still responsible for overseeing the treasurer's actions. Accordingly, the board should establish internal controls and regularly review the treasurer's activities and the association's finances. Otherwise, the association will be vulnerable to the improper handling of association finances up to and including embezzlement and the board could be held in breach of its fiduciary duties.

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