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Material Alterations, Special Assessments, and Borrowing
As to the title of this article, anyone familiar with Senate Bill 4-D and the newly required milestone inspection reports and structural integrity reserve studies primarily applicable to condominium and cooperative buildings three stories and higher knows that material alterations, special assessments, and the authority to borrow funds are not mentioned in the legislation. So why write this article about those subjects? Because the milestone reports and structural integrity reserve studies will no doubt also lead to both expected and unexpected required repairs and replacements. In effectuating such repairs and replacements, an association’s board of directors needs i) the ability to approve material alterations under certain circumstances that sometimes arise in connection with such work, ii) the ability to levy special assessments to pay for the work, and iii) the authority to borrow money that is often needed to pay for such repairs and replacements so that the special assessment payments can be amortized over time, thereby lessening the financial strain on the owners.
