A Line Of Credit Might Help Some Condos

This article discusses how some condominiums may consider borrowing through a line of credit to assist with cash flow difficulties brought about by the COVID-19 pandemic. The article highlights that Section 56(3) of the Condominium Act requires authorization in the form of a borrowing by-law for any borrowing. If the purpose of the proposed loan is to fund expenditures included in the current year's budget, then a general borrowing by-law is sufficient. However, a specific by-law is required if the purpose of the loan is to fund expenses not included in the current year's budget. The article notes that pending amendments to Section 56(3) may change borrowing principles for condominium corporations in the future.