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Condo Lending

Edmund Leong
Publication date:
November 21, 2022
Article Summary: 

Condo lending has become more popular due to inflation, labor disruptions, and supply chain shortages. When a borrowing by-law is passed, the board can engage a condo lender to finance major repairs. The lender pays the contractor directly, and the loan may cross the financial year-end, leading to complex accounting disclosures. The reserve fund may be hit with a large charge, potentially putting it into a deficit. To handle the loan payments, a new reserve fund study may be needed to cover the cost of interest. The statement of operations should reflect increased condo fees and appropriations to the condo loan fund, while the statement of reserve fund should show positive equity. The statement of condo loan fund will show a negative figure, representing the loan balance. Proper tracking and disclosure of transactions are crucial to maintain transparency and avoid confusion for owners, management, and boards. The auditor should enhance clarity through financial statement note disclosures and explanations during the annual AGM.


Condo lending, major repairs, borrowing by-law, financial year-end, reserve fund, loan payments, statement of operations, statement of reserve fund, statement of condo loan fund, accounting disclosures, transparency, confusion, auditor, financial statement notes.

Source Citation: 
Edmund Leong
Condo Lending
November 21, 2022
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