PUBLISHED ON: April 8, 2020
This week’s paramount coronavirus-related issue for co-ops, condos and HOAs has been the rollout of the Small Business Administration’s Paycheck Protection Program. Are co-ops, condos and HOAs eligible to participate?
The Paycheck Protection Program is an SBA loan authorized by the CARES (Coronavirus Aid, Relief, and Economic Security) Act, which provides cash flow assistance for “Business Concerns” (i.e., business entities organized for profit) who maintain their staff during the coronavirus crisis.
There is ample confusion as to whether co-ops, condos and HOAs are eligible to participate in the program. When the program was first announced there was broad consensus in the co-op/condo community that these associations and HOAs were eligible. However, last Friday night (April 3) the SBA issued “interim regulations” apparently stating they were not eligible to receive loans as they are “passive” businesses that own real estate for rental purposes. These interim regulations are inconsistent with the CARES Act, which provides that “any business” is eligible for participation in the program....