California – Can homeowner association board give tips and bonuses to vendors and employees?
Answer: While this question arises from a holiday season circumstance, it is an issue that has year-round implications for any bonus or tip giving. The association attorney is correct that courts tend to give deference to board decisions, but the same is not true of the IRS and adherence to the tax code. The simple irrefutable rule is: Follow the money. From where did the tips and bonus money originate? Paying monthly homeowner association payments is not a donative act; it is mandated by law, the failure of which results in foreclosure of one’s property. Titleholders pay that money to fund association operations.
The board’s so-called deference also is a “qualified” action predicated on using sound business judgment in matters directly related to the common interest development that it has been elected to oversee. Deference does not mean that a board’s actions are beyond reproach. Read more:
Posted on April 24, 2016, in Uncategorized. Bookmark the permalink. Comments Off on California – Can homeowner association board give tips and bonuses to vendors and employees?.