A condo corporation in need of funds for building maintenance or upgrades must choose between increasing condo fees, implementing a special assessment or taking out a loan.
An increase in condo fees may take too long. It takes time for funds to accumulate when condo owners contribute monthly via condo fees. When work is time sensitive and must be undertaken quickly, increasing condo fees is not a viable option.
Condo loans provide immediate funds which can be repaid through an increase in condo fees.
A hypothetical condo corporation in need of $3 million, amounting to an assessment of $15,000 per suite, would need to make an internal determination of which method of funding is most suitable for it and its residents.
It is possible to reduce total amount of a required loan by allowing owners the choice between paying the full assessment and accepting financing repayable through increased condo fees.