I
t is not unusual for associations to lack sufficient funds to replace worn out infrastructure when the time comes for the r pleplacement. Mo bd d associations
t
boards not allocating sufficient funds to their associations’ reserve accounts.
p essures against incr ds n
o r c
When associations lack sufficient funds to timely replace worn out infrastr th
W c
associations’ insurers or governmental agencies ( such as “code cement”) might not accept the fact that the infrastr Common examples when balconies and roofs n u e
out infrastructure, boards might not have a choice to delay the replacement.
u enforc
n s
is worn out.i
w o
r
u n
impose fines. d
their n
wever theer h option f, the option of associations obtaining loans is accompanied by three potential legal hurdles. Te three potential legal hurdles are having to obtain the owners’ approval (1) for the loan, (2) to impose a special assessment or an increase in regular assessmentsn re u a a
unpopular one of increasing ag assessments. Howev
p e
lly
n a
to repay the loan, and (3) to pay for capital impr vements. Tese potential legal hurdles are due to lenders’ requirements,
impose a special a o epy h l
m r
y h h
T s
Knowing that these potential hurdles exist will enable you to deal with them should they arise when a loan is being considered. It is certainly problematic and stressful to get half-way through the loan process, encounter these hurdles, and not have been awarewa of them.
associations’ cc&rs and bylaws, and State law. Ki h
Tese potentiall legal s o
o e t
w K
with them should h y is certainly lo
n e h o
a h
m g
h a
p o off them. h m 1 11
wii a
on cc&rs a d he
o
c &r and bylawsl w and tate awe law th
n y pr b em i and s
h
roblematic an stressful to g t n ou
u d they arise wh e
a e
e s
hdl tilhdle l u
s when a loan in is beingi g consider d re s u t h r
n d
o e
b i
o l
n d a d
n h
t f
r t
i will e abl y
o i
dl It
e t
get half w y h ou h h
way through the h v b e
e having p
se v e v
a a
assessment or n ,
n e
a e a hurdles ar
sm n o an increase in d () py f
ng to obtain the p c
po
o e
tillllh b a
n e n
h o n s a 3 t
w r
n p e
u d s a e due o l n e s n St
d r
a r
a pi
al (
l mp o e e to lenders
egular assessments n
h loan, (2) t e sm n
al (1)
a e
) for the p
fo e a
m a l
r q
a a
2 r
e
m .
p o
f n
re a
o s
n n
s r .
ssm n
o ofassociations ga hdl
ss c a o sobtainingloansg . T h appr
a
n s
n t
o l
t s
isaccompanied illllh
a c mp n e eg hdl
to
a a r
u o
ci h
hen s o a t
h ltl o
a e n
m o
n c
m u
ns n u
.
e r
i ty
boar s might A
”) might not . C
m h r
e worn out include insurers threatening to not r n w fire casualty property insurance and code enforcement threatening to mp se fi e
ar wo n o t nc d a u ty pr
s
t c
n c
ms abl
b l
re worn out include insurers thr a e i g t casualty
Under such circumstances, a reasonable option might be to have their associations obtain loans. Te option to obtain a loan is especially reasonable considering that the alternative is the unpopular one of increasing assessments.
nder such circumstances,, a re on b h r associations obtain loans Te p o spy p l
an r
n c
g h
o n T option to obtain d
easonable option might ng
h l e
a o
e o
e to hav a
e h n e a d od e f r e h eatening to not rop rty insurance and code enforcement threatening tog
o renew fire & e t th e t n n t
re &
p on m g t be o h v t n a lloan is n t
m o
o
o ds m ht not have a choice to delay Associations’’ owners, and, perhaps even g
so r
ci ti t
o accept the x
a o
c e
m p n
n g e
fds o t m ly c
o n
w o n
w f
e
m n a pl s
c
s a
nd
h fact that the infrastr c h n b
age c e t a
( s bll o i
ie i
f c r
p o
c
pl h
a a
s e
d w
c e
d e a r
s ructure nd ro f
o u
a l
i
n t
lk ck
u c
ffi t fu
o r
n s
not allocating sufficientg s s
dance with their r
accordanceo d n e with pr s u s aga
w t
c n
associations have sufficient funds for timely replacement in h their reserve reports However, the do ng a
a oc
o n out n a n hav
eplace worn me
p
c c
t t
o u
a e sufficient e
ost board diligy y o e s ffi i n funds fo me y e e r
t infrastru u ew e b
u t
ncreasing assessments oftentimes r sresult inlt n funds t
ffi a e
n e
d s r
ts.
m .
n to t e their associations
s e
t m c a
o s
h downwar s r s
ds diligently try to ensure that their s for timely replacement in wever the of
t o s to aco a k suffic ent u d when the m comes e tlly
p f
n i
h time c me ffor the r
t s
a
o e
th hi i
w m a
w n t r
uds to e
h t
rd i
a t s
s not t unu usua o assoc a c at
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