Becker & Poliakoff

Borrowing Money

Borrowing Money

We have been receiving a number of loan requests. Even though we’ve done articles in this forum regarding association borrowing in the past, there are some issues that keep reoccurring.

Do not start the borrowing process without a discussion with your attorney.

Often, we are asked to assist an association in obtaining a loan, but only after preliminary documents are signed, or even, as occurred recently, one day before the community was scheduled to close on the loan. That often works to the Association’s detriment because loan documents are not drafted for the benefit of the Association. They are drafted for the benefit of the bank. The earlier the attorney is brought into the process, the more smoothly the borrowing experience should be from beginning to end. Start discussions with your attorney when you are first considering a loan, before anything is signed or submitted with a lending institution.