To Borrow or Not to Borrow? How Does the Process Work: Borrowing By-laws

Hamletstrat

Photo by: Tom Reedy

We previously blogged about common myths regarding condominiums utilizing borrowing by-laws here https://ontcondolaw.com/2017/07/12/condo-financing-myths-debunked/

Condominiums have three ways to raise money

  1. Increasing monthly common expenses;
  2. Special assessment of owners; or
  3. Borrowing money from a lender.

As we noted condominiums typically use borrowing by-laws when they have to raise a substantial amount of money within a short period of time.

There can be a multitude of reasons a condominium may want to consider a borrowing by-law: an unexpected need to complete a major common elements repair/maintenance project before projected in the reserve fund, unexpected damage from a significant weather event (ex. the significant windstorm in southern Ontario in May 2018), or the desire to complete replacements related to a major common elements project (ex. installing new windows as part of a building envelope EIFS project). Continue reading