Q&A: In-House or Outside Help?

Q Does the secretary and treasurer position have to be a board member or can it be delegated/hired?

—Curious in Chicago

A “Most condominium association bylaws,” says attorney and managing partner Ebony Lucas of Chicago-based Peace of Mind Properties, “require that the board members be owners and state that the board members must serve without compensation. In addition, the Illinois Condominium Property Act requires that any compensation for board members be provided in the bylaws.

“If the association decides to compensate a non-owner board member, you will need to amend your bylaws. The current bylaws should have a section that to let you know how many votes are required for such an amendment.

“In addition, there are other legal implications that you should consider, such as:

A compensated board member may not have protections against liability afforded by the Illinois Not for Profit Corporation Act;

The board has a fiduciary duty to the unit owners and you will have to determine how you resolve potential conflicts between a paid director and the best interest of the association;

Checks and balances will need to be in place to order to protect the other board members from a breach of a fiduciary duty claim in the event that the paid director's duties are not carried out reasonably; and,

The Illinois Condominium Property Act requires Directors & Officers Insurance. You will need to determine if your insurance coverage will extend to a non-owner, paid board member.

“There are property managers and bookkeeping services which the association might hire in order to assist with some of the treasury and secretarial functions. The association might want to look into these types of services rather than hiring a board member. Hiring [a] professional might be a better route to lessen the work load, provide necessary checks and balances, and limit the association's potential liability.”

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