How does an HOA account for board labor costs?

Today, there are several ways to manage an apartment building. The owners themselves decide which option to choose for themselves.

In recent years, the popularity of HOAs has been growing; more and more apartment owners want to manage their common property themselves.

But in this case, the question arises, how much is the salary of the chairman of the HOA and what does this amount consist of?

Utilities and housing services

Before you understand the salary of the chairman of the HOA, you need to understand what the income of any home consists of.

An apartment building is an economic facility with a whole network of engineering networks and communications that require regular and attentive attention.

Any apartment owner must pay utility bills on time . Part of the amount goes to pay for utilities consumed by the house over the past period, such as heating, hot and cold water supply, electricity and sanitation.

The second part of the payments goes to the maintenance of common property, as well as to the payment of labor to specialists hired to perform a particular type of work.

It is from this part that wages are paid to the employees of the management company or, if the house is managed by an HOA, to members of the board and the chairman of the HOA.

The overwhelming majority of ordinary people are sure that the work of the chairman of the HOA is not so significant that this item should be included in the column of house expenses. But if you take into account the entire volume of work performed and the time this activity requires, this position should be paid.

Does the chairman of the HOA have the right to receive a salary?

Two similar houses (assuming that both are managed by an HOA), built in the same period with different maintenance, may look completely different after ten years. It all depends on how carefully these houses are monitored.

Timely ongoing repairs, high-quality landscaping of courtyard areas, care of common property - all this is the merit of the head of the HOA.

Most of the chairman’s work is invisible from the outside, but over the years all the activities carried out make themselves felt. The work of the chairman is commensurate with the work of any other person who goes to work on a schedule, therefore, to the question of whether the chairman has the right to receive material remuneration for his activities, there is only one answer - he has.

The remuneration of the chairman is a settled issue, it should be . Can the chairman receive a salary or is it possible to get by with one-time rewards for his efforts?

To understand this, it is necessary to take into account that in the issue of the chairman’s salary there are a number of nuances that need to be taken into account.

The chairman of the HOA is elected by the residents themselves - this is an elected position. The term of chairmanship cannot exceed two years. After this period, the election of the chairman must be repeated.

Not all residents have the right to elect the chairman of the HOA; the candidate is determined at a meeting of the HOA board members.

Responsibilities of the chairman of the HOA

1. The primary task of the chairman is to constantly monitor the implementation of decisions made by the board.
2. Manage the work process, giving instructions to officials.
3. Sign financial documents.
4. Develop a staffing schedule for HOA employees and monitor its compliance.
5. Act on behalf of the partnership, protecting its interests.
6. Enter into agreements that do not require a board decision.

Another important function of the chairman is to ensure the stability of payments of amounts for received utility services.

The more responsibly residents take this responsibility, the better the quality of services provided to them. The fight against debtors is a constant, continuous process

Payment or reward?

The amount of work assigned to the chairman of the HOA is considerable . How should this work be rewarded? Can the chairman of the HOA receive a salary or is he only entitled to one-time remuneration?

The Labor Code of the Russian Federation clearly regulates this issue: the chairman must receive a salary, and his labor relations must be secured by an employment contract.

The only problem is that the law does not say anything with whom this agreement should be signed . In the case of the HOA chairman, it is not entirely clear who is the employer and who is the employee.

On the one hand, the chairman of the HOA is a position whose responsibilities include monitoring the work process. But on the other hand, the chairman is the same owner of the property, and at the same time he is an employee of the partnership, since he is a member of the board.

For a long time, such confusion led to distortions . It was not entirely clear how to competently resolve all the friction that arises between the residents and the chairman, who sets the size of the chairman’s salary, with whom the contract should be concluded, and others.

The shortcomings led to the fact that unscrupulous chairmen charged themselves wages that had no real justification. The necessary work was carried out untimely, incompletely or not at all.

In 2011, amendments were made to the Housing Code of the Russian Federation, from which it followed that a member of the board of a residents’ association cannot work in the same HOA on the basis of an employment contract.

Therefore, the only option left for material incentives for the chairman of the HOA is remuneration for each type of work performed by him. As practice has shown, this option turned out to be optimal.

Salary is a set amount, which is calculated according to a single scheme from month to month .
While the activities of the HOA chairman cannot be assessed using a single index. The amount of work varies from month to month. For example, a house is undergoing renovation work to replace the roof. During this period, the chairman is required to actively participate in all work processes.

Who decides whether to increase remuneration?

The founding document of the partnership is the Charter. Therefore, any decisions are made only on its basis. If the Charter stipulates that at a meeting people can decide what the chairman’s remuneration will be, then it is on the basis of this rule that they act. The size of the salary increase for the chairman is decided as follows:

• at the general meeting the size of the increase is determined, moreover, more than half of the participants must vote for this decision;
• There are certain restrictions in the Charter regarding the salary of the chairman and these restrictions must be observed.

Now let’s look at what responsibilities the chairman of the HOA has:

• the decisions that the board makes must be implemented, this is controlled by the chairman;
• signs documents related to finances;
• develop the schedule that is necessary for HOA members to ensure maintenance of the premises;
• represent the interests of the partnership without having a power of attorney;
• TSN officials must listen to the instructions of the chairman.

In order to receive a salary in the Russian Federation, you need to conclude an employment contract. Only this document is capable of regulating the financial relations between the employer and the hired employee.

How to draw up an employment contract?

The presence of an official document regulating the relationship between the chairman and the HOA is beneficial to both parties.

On the one hand, the organization, which is the HOA, receives a manager who is responsible both for his own actions and for the actions of the employees he hires. It should be understood that the work of the chairman does not have a clear established schedule with weekends and weekdays.

It should be understood that all these responsibilities are assigned for a reason. The chairman also has the right to leave, the number of days is determined by the Labor Code of the Russian Federation. The code also provides for receiving remuneration twice a month: advance payment and salary. The time during which a person performs the duties of the chairman of the HOA is also counted towards the total length of service.

Logically, the agreement between the chairman and the HOA should be signed by the head, in this case, the chairman himself. But such a drafting of the document will not be legally correct. Therefore, it makes sense to indicate in the constituent documents of the HOA the person who will have the right to sign this kind of paper .

What else should the employment contract between the chairman and the HOA contain?

1. Full name of the organization, as well as the last name, first name and patronymic of the employee. With whom the contract is concluded.
2. Passport details of the citizen with whom the agreement is concluded, reference to the document justifying the actions of the partnership.
3. Date and place of conclusion of the contract.
4. The contract should initially specify the working conditions of the chairman, as well as his workplace. This is necessary so that each tenant, if necessary, can easily find a manager.
5. Duties to be performed by the chairman.
6. The validity period of the contract must be indicated.
7. The procedure for calculating remuneration and the period for its payment.

The contract may contain a lot of other nuances, which, in the opinion of homeowners, should be outlined from the very beginning. But it should be understood that the employer, in this case the homeowners, can supplement this agreement only with those clauses that are designed to improve the employee’s working conditions.

From the above, we can conclude that the changes to the RF LC, introduced by Federal Law N 123-FZ, namely, the additions to Article 147 of the RF LC, part 3.1. do not prohibit concluding an employment contract with the chairman of the board of the HOA, the object of which is the performance of a labor function - the position of chairman of the board of the HOA. These changes establish a ban only on the combination of the chairman of the HOA board of his activities as the chairman of the HOA board with other work activities in the HOA.

1. Interpretation of Part 3.1. Art. 147 Housing Code of the Russian Federation. Member of the HOA board without salary?

First of all, questions were raised in the interpretation of the second sentence of the paragraph, which states that a member of the HOA board cannot combine his activities on the board with work in the partnership under an employment contract...

2. Should the chairman of the HOA work for free or for a fee (salary)?

It should be said right away that the assumptions and fabrications of some citizens that now the board of the HOA and its chairman must perform their duties exclusively free of charge have no basis...

3. Reasons for making additions to Part 3.1. Art. 147 Housing Code of the Russian Federation

In our opinion, the main reason for the innovations was the increasing number of cases of members of the board and chairmen of the board of the HOA combining a variety of positions. As a rule, it was about the work of a member of the HOA board (chairman of the board) as an accountant, lawyer, economist, cashier in this HOA. But there have been cases of frankly immodest appointment of oneself to a number of positions at the same time. To illustrate, we can give an example from judicial practice...

4. A member of the HOA board, having become an employee of the HOA, lost the right to vote at the board meeting. The court's decision

The court declared the decision of the HOA board illegal. In doing so, the court stated the following. Of the 5 board members present at this board - M.N. as of July 14, 2011 in violation of the requirements of Art. 147 part 3.1 of the Housing Code of the Russian Federation - could not be a member of the board of a homeowners’ association because The partnership entered into an employment contract with him (M.N. was appointed to the position of manager of the HOA) ...

5. Is it possible to conclude an employment contract with the chairman of the HOA?

Due to the lack of a legal interpretation of Part 3.1 of Article 147 of the RF Housing Code, we will try to understand what the legislator meant and how to understand this rule of law...

6. Labor functions of the chairman of the HOA? Employment contract?

According to Article 57 of the Labor Code of the Russian Federation, the employment contract specifies, among other things, the labor function - work in a position in accordance with the staffing table, profession, specialty indicating qualifications; the specific type of work assigned to the employee. The HOA board is a collegial body. The labor function of a member of the board of an HOA (who is not the chairman of the board) is really difficult to determine, if only because a member of the board performs his duties only by periodically attending meetings of board members and does not carry out (continuous) activities as such...

7. Submission of the HOA chairman to internal labor regulations - labor relations

According to Article 15 of the Labor Code of the Russian Federation, labor relations are relations based on an agreement between the employee and the employer on the personal performance by the employee for payment of a labor function (work according to the position in accordance with the staffing table, profession, specialty indicating qualifications; the specific type of work assigned to the employee), subordination of the employee to internal labor regulations...

8. There are no labor relations with the chairman of the HOA board. From judicial practice

R. filed a lawsuit against the HOA, and asked, in particular, to recover arrears of wages, compensation for unused vacation, compensation for termination of an employment contract in the amount of 36,000 rubles, compensation for moral damage in the amount of 50,000 rubles, legal costs of 27,000 rubles...

9. Labor relations with the chairman of the HOA board even in the absence of an employment contract

The chairman of the board of the HOA is the head of the HOA. By virtue of Art. 273 of the Labor Code of the Russian Federation, the head of an organization is recognized as an individual who manages this organization, including performing the functions of its sole executive body, regardless of its organizational, legal forms and forms of ownership...

10. Labor relations with the chairman of the HOA upon his actual admission to work

Labor legislation (Article 15 of the Labor Code of the Russian Federation) defines labor relations as based on an agreement between the employee and the employer on the personal performance by the employee for payment of a labor function (work according to the position in accordance with the staffing table, profession, specialty indicating qualifications; the specific type of work entrusted to the employee) , the employee’s obedience to internal labor regulations...

11. The chairman of the HOA has the right to leave and compensation in case of early termination of his powers

The court ordered the HOA to allow the plaintiff to perform her official duties as a boiler room operator, recovered from the HOA in favor of the plaintiff wages for the period of forced absence as a boiler room operator, compensation for moral damages, compensation for unused vacation, compensation for the early termination of the powers of the chairman of the HOA board, At the same time, he pointed out the groundlessness of the defendant’s arguments that the employment contract with the plaintiff is void, on the basis of clause 3.1 of Art. 147 of the Housing Code of the Russian Federation, since these legal requirements relate to the election of a person already working under an employment contract to a member of the HOA board...

We also recommend a later publication on this topic: ​"Chairman of an HOA without an employment contract. Right to salary and vacation"

Alexander Otrokhov, Legal (Omsk) 04/05/2012

Remuneration of the chairman of the HOA

How is it calculated and what factors influence the amount of remuneration for the chairman of the HOA:

1. Type and volume of work performed.
2. The deadline for completing this work is the time required to achieve the task.
3. The amount of remuneration can be initially specified. This can be either a certain amount or an agreed percentage of the value of the entire contract.
4. In order to receive remuneration for the amount of work performed, the chairman is obliged to provide a completed acceptance certificate for completed work for each type of work separately, drawn up in accordance with all the rules. Only this document can be considered a legal basis for calculating remuneration. There are also requirements for filling out this paper that must be followed. It is important that this type of work is actually performed properly.
5. The chairman of the HOA can carry out the necessary work himself, for example, replacing a valve in the basement or installing a window in the entrance. This type of work is regulated by civil law and is not illegal. There was a volume of mandatory work that was ultimately completed, but by whom it does not matter.
6. After fulfilling his obligations, the chairman of the HOA board will receive the amount agreed upon for each type of work.
7. In practice, it often happens that in fact an HOA has been created on a house, but all management rights have been transferred to some management company. At the same time, the partnership reserves the right to lease common property and control over all financial documentation. The homeowners themselves decide how and what to spend all the additional funds raised.

Rights and obligations of the parties

In the case of interaction with the management company, the chairman is not required to constantly monitor everything that happens on a daily basis, but in the case of independently solving all problems that arise, he is required to be constantly at the workplace.

Who is the head of a housing cooperative?

Reference. The chairman of the housing cooperative is an official vested with a list of rights and obligations in relation to the legal entity (cooperative) being created.

Any of the owners can be chosen by voting (according to clause 1 of Article No. 119 of the Housing Code of the Russian Federation), if the following is not noticed about him:

• criminal record;
• bankruptcy;
• exclusion from another housing cooperative within the last three years;
• the presence of administrative offenses that disqualify him as a leader.

The remaining candidates are admitted to the position without conditions - other than their own consent.

The chairman represents the general interests of residents and is mainly involved in monitoring how decisions of housing cooperative meetings are implemented. As an official, he bears all main types of responsibility before the law of the Russian Federation - civil, criminal and administrative.

Can the chairman of the HOA work part-time?

The Labor Code in 2021 prescribes the right of every citizen to combine several jobs at once. But you should understand the specifics of working as the chairman of an HOA. This is a leadership position that requires constant vigilant monitoring of the processes taking place in the house.

His responsibilities include accepting all work performed and signing certificates of completed work. Based on this, we conclude that combining the chairman of the HOA with other jobs is an unrealistic task.

Can the chairman of the HOA work as an accountant at the same time?

On July 18, 2011, a law came into force in which an amendment was made stating that the head of an organization, such a position is the chairman of the HOA, does not have the right to combine his main activity with any other during the same working hours.

The Chairman may maintain financial records, but this will not be considered as holding a separate position . True, homeowners who are members of an HOA can increase the amount of remuneration for this amount of work performed.

Who and how sets the salary for the chairman of the HOA

The amount of remuneration for all members of the board, including the chairman, is negotiated at a general meeting of residents of the building.

How is the amount of remuneration for the chairman of the HOA determined:

1. A general meeting of residents is held. Notification can be carried out both through individual invitations and through an announcement on the bulletin board. These meetings will need to be held monthly. In order for the meeting to be considered valid, the presence of at least half of the residents of the house must be present. Otherwise, the decision made will not be valid.
2. All reports of work completed over the past month are carefully studied and presented to the present residents by members of the board. All acts must indicate the amount of the cost of services.
3. Based on the estimate of all work performed, the percentage of remuneration is calculated. By law, it cannot be less than 3. After this, residents hold a vote; it can be either secret or open.
4. After reaching a consensus, minutes of the meeting are drawn up and signed by all those present. Only after signing this protocol does the chairman have the opportunity to withdraw the agreed amount of money from the personal account of the house.
5. After this, the issue of the amount of remuneration to the chairman for the past month is decided.

In order not to hold this kind of meeting every month, many HOAs stipulate in the agreement the amount that the chairman will receive monthly.

A certain amount is prescribed in the Charter. The final amount must satisfy not only the chairman of the HOA, but all members of the board.

How is it determined?

Payments for performing duties are a percentage of the cost of work carried out in the house. Thus, the greater their volume and the chairman’s time spent, the more money he will receive. But often it is only symbolic.

The amount depends, among other things, on:

• the number of apartments existing in the building;
• how many responsibilities the chairman has.

Officially members of the board cannot work in the HOA under an employment contract (we discuss the nuances of concluding an employment contract between the chairman and the HOA in this material). But often the chairman actually performs the duties of an accountant (as well as other specialists). This, of course, should be reflected in the amount of remuneration. It can range from several thousand to several tens and even one hundred thousand rubles.

The basis for payment of remuneration will be the minutes of the meeting.

Salary of an accountant in a homeowners association

A tenants' association is not a commercial organization, but this does not mean that this organization is exempt from accounting. If the head of the partnership is not able to carry out this work himself, then the HOA is obliged to hire a person to fill this position.

It is the accountant who is responsible for the formation of all reporting documents, timely submission of reports and declarations.

The amount of remuneration to the accountant for conducting this work is also determined by the board of the partnership . It all depends on whether the accountant works full time or whether he works part-time in a given HOA only on previously agreed upon days.

Legal basis

The governing bodies of the HOA are the general meeting of the members of the partnership and the HOA board itself.
And from among the members of the board, its chairman is elected, who essentially has almost the same powers as the general director of a commercial organization. But the final decision is always made by the general meeting of HOA members. This is stated in paragraph 1 of Article 145 and paragraph 3 of Article 147, Articles 144 and 149 of the Housing Code of the Russian Federation.

The amount of remuneration for members of the HOA board (including its chairman) is established and approved by the general meeting of the partnership. It can do this, but is not obligated to. That is, the board of an HOA can conduct its activities both on a paid basis and on a voluntary basis.

This conclusion follows from subparagraph 11 of paragraph 1 of Article 145 of the Housing Code of the Russian Federation.

Situation: can the chairman of the HOA board set the amount of remuneration for himself?

No, he can not.

Only the general meeting of HOA members can set the amount of remuneration for the chairman. If the issue of the amount of remuneration was not raised at the meeting, this means that the chairman must perform his functions for free. Also, the chairman does not have the right to change the amount of his remuneration, which was approved by the meeting.

This conclusion follows from the provisions of subparagraph 11 of paragraph 1 of Article 145 of the Housing Code of the Russian Federation.

If the chairman violated these provisions and nevertheless received illegal remuneration, the general meeting may demand the return of this money through the court. There is an example of a court decision that confirms this conclusion (see the appeal ruling of the Murmansk Regional Court dated May 2, 2012 in case No. 33-902).

Tax base

The remuneration of the chairman of the HOA is subject to taxes and insurance contributions. Why is that?

The income of the director of a tenants' association is nothing more than making a profit . What taxes are levied on the remuneration of the chairman of the HOA?

This type of income is subject to mandatory personal income tax. As a percentage, this is 13% of total income.

As for insurance premiums, the head of the partnership is also obliged to pay them with constant regularity. This can be done either monthly or one-time for the whole year at once. This is necessary for this. So that in the future there will be no problems with calculating pensions.

How exactly the chairman will make a tax deduction is his personal problem . He can carry out this procedure personally, or he can contact a regional operator or a credit institution that provides this type of service.