Can the chairperson of a residents’ association charge a fee?

How to pay the chairperson of a residents’ association

The fact that the chairperson of a residents’ association may receive payment or some form of financial compensation can be a source of controversy within the association. For this reason, it is essential that any chairperson who is to receive payment does so in the correct manner.

Furthermore, if this payment is not agreed in accordance with the law, it may give rise to a challenge by other members of the owners’ association. It should be noted that if this payment is not made correctly, it may lead to problems with the tax authorities for both the chairperson and the owners’ association.

The role of chairperson of a residents’ association is a difficult one, undoubtedly more so in some blocks of flats than in others. Because of this, it sometimes happens that some owners consider the possibility that the person appointed as chairperson might receive some form of payment from the rest of the association.

The role of chairperson, which is a mandatory position, is usually held on a voluntary basis, that is to say, entirely free of charge. Sometimes an arrangement can be made, for example, to receive a monthly sum that roughly matches the amount of the service charge. Another option is to allocate a monthly sum to cover travel and representation expenses. 

How is the president’s remuneration determined?

As we have mentioned previously, serving as chair of a residents’ association involves certain inconveniences and responsibilities that take up time from our day-to-day tasks. For this reason, some estates consider offering some form of compensation to the owner who holds this position. To this end, the Horizontal Property Act sets out clear guidelines to be followed.

As it is regarded as a purely administrative act, the resolution may be adopted by a simple majority, in accordance with Article 17.7 of the Condominium Act.

There is therefore no legal obstacle to paying a small sum by way of representation expenses as remuneration to the owner who fulfils the role of chairperson.

Is the president the only one who can be paid?

 It is now clear that there is no legal obstacle to paying a small allowance to the owner acting as chairperson to cover representation expenses in respect of the time and inconvenience inherent in the role. We have also seen that the resolution may be passed by a simple majority. However – and this is very important – this income must be declared to the tax authorities as a form of income.

Furthermore, any member of the Owners’ Association may charge for services rendered, subject to approval by the Owners’ Association.

In principle, the only mandatory position is that of the Chair, who represents the community, as stated in the Article 13.3 of the LPH. This article states that the President acts as the community’s representative, both in and out of court, in all matters affecting it.

However, if any of the owners holding these posts are paid a fixed sum, this amount must be declared to the tax authorities. Any work carried out by these individuals on behalf of the community for which they receive payment must always be declared. 

In any case, you can always contact us at this link or at our office, so that we can answer any questions you may have and advise you on the best way to proceed with this agreement.