HOAleader.com - Tip of the Week - April 8, 2022
Published: Fri, 04/08/22
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HOAleader.com - Tip of the Week - April 8, 2022
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In this week's tip, our experts raise sirens, throw down red flags, and send all kinds of other signals that our reader's board should think twice, maybe three times, before accepting its management company's offer to share PPP funds with the association.
To start with, the Paycheck Protection Program was passed by Congress in the wake of the COVID-19 pandemic as a loan program to help businesses keep employees on the payroll. Borrowers had to meet many requirements to qualify. Later, Congress made the loans forgivable if borrowers applied and met certain additional conditions.
Here's the deal our reader wants guidance on: The management company applied for a PPP loan and later had its loan forgiven. They're now proposing sharing some of that cash with our reader's HOA. Our reader has gobs of questions, and our experts have gobs of worries.
They don't have all the information they'd need to offer firm and specific opinions on this reader's specific situation. Still, red flags are flying everywhere for them.
An employer could have its loan forgiven. But to share its proceeds with others? Hmmmm.
"This doesn't pass the smell test for me," says Alessandra Stivelman, who is board-certified in condo and planned development law and a partner at Eisinger Law in Hollywood, Fla. "A lot of associations asked us to look into PPP loans. We even had a condo hotel that was able to get PPP money. Later, their restauranteur was claiming the association used the restaurant's employees as a basis to get the PPP money and that the restauranteur was therefore entitled to some of the loan proceeds. I saw no merit in that argument."
Stivelman and others are just getting started. Read five reasons our experts say this board should be very, very wary of accepting these funds in our new article:
https://www.hoaleader.com/members/4498.cfm
Best regards,
Matt Humphrey
President
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