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Co-ops, Condos, HOAs & PPP Loans Confusion Abounds for Communities Seeking Fed Assistance

While individuals and businesses across the country and around the globe attempt to maintain some semblance of stability in a world reeling from the medical, emotional, social, and economic devastation of the coronavirus pandemic, identifying and securing assistance from the U.S. federal government has presented its own set of challenges and frustrations.

Much like the tens of millions of Americans who have filed for unemployment in the last couple of months have found, the sheer numbers of people in need has made the process of applying for assistance extremely time-consuming. It has also been riddled with technical failures thus far -- to say nothing of the uncertainty of  actually receiving the funds. The same has been reported by thousands of small businesses vying for their share of the funds released by the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

An added layer of uncertainty is preventing hundreds of thousands of co-ops, condos, HOAs, and other multifamily housing entities across the country from obtaining federal loan assistance. Although multifamily housing corporations and associations are nonprofits, and therefore don’t participate in “active” business, they are still organized as businesses under state laws, and employ laborers, managers, security personnel, skilled tradespeople, office workers, and other professionals as any other business might. 

In addition to housing, many also lease space to commercial tenants, and provide community services and activities. Their operating budgets depend on owners and shareholders paying common charges every month, and on commercial tenants and lessees paying rent and usage fees. When those revenue streams are destabilized or suspended, as is now the case with so many individuals losing incomes and businesses losing customers, co-ops, condos, and HOAs are in jeopardy of not being able to pay for utilities, taxes and debts, and salaries for essential employees. 

Most buildings and communities rely on a team of workers to provide maintenance, cleaning, security, repairs, and general operations to keep them functioning. For that reason, these employees have been designated ‘essential’ in jurisdictions where stay-home orders are in place. They are still going to work, risking their own safety to ensure that the communities they serve can keep up with enhanced cleaning and sanitation routines, evolving protocols for visitors and deliveries, and the provision of essential services. When these staff members cannot work—because they themselves are ill, or because they can’t risk the health of a vulnerable family member for whom they are a caregiver—boards or managers must bring in temporary employees (usually at higher rates), or stretch their remaining employees (and overtime budget) to cover the vacancies. 

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