[WSBARP] Member Loan to Condo Assn

[Paul Neumiller]

Listservers:  I am looking for guidance to get me in the right direction.  Client has a condo in a Condo Association.  Asso. needs to perform about $180K of capital improvements but has only $80K in a reserve fund.  Client and Asso. are in preliminary talks about the Client lending from $80K to $100K to the Asso. for 5 years, fully amortized and 5%.   I know that I will need to review the Asso.'s governing documents to ascertain if the Asso. can even borrow money (or maybe require they provide an attorney's opinion letter?).  What about security?  The common areas are worthless to a creditor (not to mention the logistics of every condo owner owning a small percentage of the common areas.)  Attach right to collect dues? (Or is the advice to run away.  Very fast.) Help!




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