Condo Association Management Blog

HOA loans considerations for your condo association

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The condo association we belong to needs some major repairs to buildings that have deteriorated over the years structurally. With engineering reports and bidding completed, it looks like it came in at a $500,000 price tag. The board wanted to take out an HOA loan but is having problems due to the level of foreclosed units (9) - the HOA lending bank wants the level to be 6. We have had 3 denials over the last year. My question is the board has had the ability to assess the owners for the amount but they are gung-ho on an HOA loan that would use the buildings as collateral. How much value will our individual units loose if an HOA loan is on the books. The board want to take out a 10 year loan - this is unacceptable to the majority of unit owners. If the board had begun assessing 18 month ago instead of beating their heads against a wall, the assessments collected would have almost cover the cost. Now the board has reduced the scope of work so the total restoration is down to under $300,000. Each unit would be responsible for about $3,700. There are a few owners who would have problems coming up with this right away but the majority could handle this assessment. The board will not listen to the owners (over 50%) who do not want a lien on the property. Where do we go from here and what are the owners rights?