Commercial Condo Owners Association

Started by JosephB7 • 1 replies • 1119 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

JosephB7 (North Carolina)
Posts: 11

Posted:

I own a condo office in a building with 80 other owners and we have an association with a board. The past board borrowed money for capital improvements (driveway repaving). The association documents do not provide language for this type of lending/borrowing. Can a board do this without authorization or specific language ion the docs ? The board did not notify the owners that they intended to borrow the money. Question: Can an owner sue the association / BOD to undue the unauthorized loan ? Can the owner hold the board members liable for interest the association had to pay ? Can the owner sue the board members individually ? I suspect that, considering the boardmembers own multiple units that they didn't want to asses a special assement and went out on their own a secured a loan from another unit owner...Something smells with this one. Any help or guidence would be greatly appreciated. Any recommendations on a lawyer in the Charlotte area that has experience in these matters ? Thanks

LarryB13 (Arizona)
Posts: 4,099

Posted:

Joseph,

Unless there is language in your documents prohibiting the board from borrowing money, then borrowing falls under the aegis of normal business practices. Corporations can and do borrow money and do not usually need the approval of the members or shareholders to do so. I see nothing wrong with borrowing money for capital repairs, although it would have been more prudent for the board to have established a reserve for capital repairs.

Less clear is the fact that the association apparently borrowed the money from one of its own members. Without knowing the terms of the loan, it is hard to say whether there is anything wrong. If the amount borrowed and the repayment terms were reasonable, then there is not likely anything to be worried about. The owner/lender may have been easier to deal with than a bank.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here