Skip to main content
Fulltext search
FILTER RESULTS BY:
RECOMMENDED IN RENT
Moving to NYC after college? Here's how to find a rental apartment
RECOMMENDED IN BUY
How buying real estate in NYC is unlike anywhere else
RECOMMENDED IN SELL
A guide to using a no-fee renovation loan from a NYC real estate firm
RECOMMENDED IN IMPROVE
How to make your NYC renovation more pet-friendly
BEST REAL ESTATE WEBSITE!
National Association of Real Estate Editors
BEST REAL ESTATE WEBSITE! National Association of Real Estate Editors
Brick Underground
Social Links
follow:
  • Facebook
  • Twitter
  • Instagram
  • Flipboard
  • search
Brick Underground
☰ Brick Underground
Brick Underground
Brick Underground
☰
Brick Underground
  • Buy
    • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
    A rendering of the roofdeck at 55 Broad Street.
    Rent
    Housing lottery launches for 143 apartments in the Financial District
    Aerial panoramic view of Red Hook, Staten Island, Brooklyn, and Verrazano-Narrows Bridge
    Sales Market
    24 NYC neighborhoods where median prices more than doubled in the past decade
    431 West 54th Street is a co-op building that allows subletting.
    Investing
    Want to buy an investment apartment to rent out? Here's what you need to know
  • Rent
    • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
    Young woman using laptop at new apartment, with moving boxes around.
    Roommates + Landlords
    Didn't get your security deposit returned in NYC? A new chatbot can help
    A rendering of the six-story building in Park Slope.
    Affordable Housing
    Housing lottery launches for 45 rent-stabilized units in Park Slope
    Laura and her dog Jack
    Rent
    Why I moved to NYC from Brazil: I relocated for work and reunited with friends I made 15 years ago
  • Sell
    • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
    Aerial view of downtown Brooklyn
    Sell
    Median sales price in Brooklyn climbs to $995,000 in the second quarter
    Downtown New York City
    Sell
    Manhattan deals rose to highest level in nearly two years, defying national trends
    new condo building and older co-op buildings in Prospect Heights, Brooklyn
    Sell
    Brooklyn median price nears $1 million but the spring market is a question mark
  • Live
    • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
    FlatRate moving brick underground
    Live
    How to troubleshoot your move in advance
    Sponsored By flatrate
    Distressed woman sitting in her apartment
    Troubleshooting
    Ask Altagracia: My live-in partner is abusive. How can I get out of my lease?
    Sponsored By Outerbridge Law P.C.
    NYC apartment buildings with fire escapes
    Neighborhood Intel
    Can you sit on a fire escape in NYC? 5 things to know
  • Improve
    • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide
    mini splits apartments new york city
    Products + Services
    Yes, you can install central AC in your co-op or condo unit. Here's how
    image
    Products + Services
    Take back your deck! How to win the war with mosquitoes and enjoy outdoor living again
    NYC apartment building with AC units
    Products + Services
    My neighbor's dripping AC is driving me crazy. What can I do?
  • Boards & Buildings
    • Boards & Buildings
    • Boards
    • Finance
    • Insurance
    • Legal
    • Property Management
    • Structure & Systems
    • Sustainability
    Burned and Boarded Up Windows
    When should your board hire a public adjuster?
    Manhattan GM
    What should we consider when renewing insurance for our building?
    Facade of NYC buildings
    How much is insurance on a NYC co-op or condo building?
  • Advertise
    • Advertise with us
    • Sponsored Content
    • Experts
    FlatRate moving brick underground
    Live
    How to troubleshoot your move in advance
    Sponsored By flatrate
    Distressed woman sitting in her apartment
    Troubleshooting
    Ask Altagracia: My live-in partner is abusive. How can I get out of my lease?
    Sponsored By Outerbridge Law P.C.
    Building facades in New York in winter
    Roommates + Landlords
    Ask Altagracia: I withheld rent due to inadequate heat and I'm being hassled to pay it back. What should I do?
    Sponsored By Outerbridge Law P.C.
  • Brick Report
  • About Us
  • About Us
The subscription service is currently unavailable. Please check again later.
Fulltext search
FILTER RESULTS BY:
New Main menu
  • Buy
    • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
  • Rent
    • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
  • Sell
    • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
  • Live
    • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
  • Improve
    • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide
  • Boards & Buildings
    • Boards & Buildings
    • Boards
    • Finance
    • Insurance
    • Legal
    • Property Management
    • Structure & Systems
    • Sustainability
  • Advertise
    • Advertise with us
    • Sponsored Content
    • Experts
  • Brick Report
  • About Us
    • About Us
    • Advertise
  • About Us
SUBSCRIBE TO OUR NEWSLETTER →
Social Links Footer
  • Facebook
  • Twitter
  • Instagram
  • Search
Ask a Co-op & Condo Lawyer [ SPONSORED ]

Is our co-op building eligible for money from the Paycheck Protection Program?

By Wagner, Berkow, and Brandt  | January 6, 2021 - 12:30PM
image

Board members in eligible buildings are encouraged to move promptly in order to apply for the funds.

iStock

SHARE:
Share to Facebook
Share to Twitter
Print
More...

Is our co-op building eligible for money from the Paycheck Protection Program? Should we apply?

“The Consolidated Appropriations Act of 2021 which passed on December 21st, 2020 amended the Small Business Act so that residential cooperatives with not more than 300 employees, which were originally excluded from the Paycheck Protection Program (PPP), can now apply for loans to cover eligible expenses during the pandemic,” says Steve Wagner, partner at the Manhattan law firm Wagner, Berkow & Brandt, who represents co-ops and condos and is a board member at his own 420-unit co-op building.  

Even though the details are yet to be finalized by the Small Business Administration, Wagner advises boards to move promptly in order to apply for the funds.

Loans given out through PPP are forgivable if 60 percent of the money is used for payroll and 40 percent is used for non-payroll expenses like rent, mortgage interest payments, or other related expenses—for example, utility payments, internet service and telephones. 

The program closed last year but the $900 billion coronavirus relief measure reopens it. Eligible expenses have also been expanded to include personal protective equipment, supplier costs, as well as business operations software and human resources needs. 

Many co-op and condo buildings have faced declining revenues and increased costs during the pandemic, Wagner says, specifically those that have lost revenue because shareholders or commercial tenants aren’t paying or because expenses have gone up because new equipment has been installed or there are costly safety precautions in place. 

“Not only are there finite funds available but there’s a March 31st deadline in place so it’s important to act quickly, even before the regulations are put out,” Wagner says. 

“If you get the money and are not entitled to the forgiveness because you don’t qualify, you will have to pay back the loan with the interest but the interest rates are going to be very low, no more than 4 percent,” says Wagner. 

Check your building’s governing documents and mortgage.

Your first priority is to make sure your building’s governing documents—specifically the bylaws of the co-op—allow you to take the loan.  

“You should have counsel to look at that. And make sure any existing lending, like a mortgage on the property, doesn’t restrict this type of borrowing,” Wagner says. 

“Typically an underlying mortgage in a co-op does restrict subordinate financing without permission but this is a loan, not a mortgage, so there’s no lien or other security interest granted in the property and there’s also the likelihood it will be forgiven,” Wagner says.  

Application requirements

The main requirement—beyond hardship—is that the business has no more than 300 employees, which puts NYC co-op and condo buildings within this threshold. 

However, it is not yet clear whether condos are included in the statute. “Co-ops are specifically mentioned but condos are not,” Wagner says. “So it seems that condos still will not be eligible for PPP loans.” Further clarification will come from the SBA. 

Some buildings do not employ their workers directly but hire them through other companies. “The rules developed by the Small Business Administration allow ‘leased employees’ so they should be included in calculations for your loan and forgiveness of the loan.” Wagner says.

You also need to know if the company that pays your workers is applying for a PPP loan. If some or all of the workers are not considered employed by the co-op, the amount of the loan will either be denied for those employees’ salaries or the forgiveness will not be given and the loan will have to be paid back. “Your co-op should probably apply for the loan and let your bank, the SBA, and your accountant work out what will be included and forgiven,” Wagner says. 

The PPP form requires you to state that economic uncertainty makes the loan request necessary to support ongoing operations. 

Your chances of approval

It’s highly likely lenders will approve these loans not only because of the unusual circumstances but because they are 100 percent federally guaranteed to applicants who maintain payroll during this time, Wagner says.  

“The legislation’s intention is obviously to get money into the hands of small businesses and to keep employees in place to ensure there will still be businesses and jobs for people as the pandemic subsides. It makes little sense, during this emergency, for the government to find ways to exclude businesses if the applications are made in good faith and the money is spent on the correct items,” Wagner says. 

New York City real estate attorney Steven Wagner is a founding partner of Wagner, Berkow, & Brandt, with more than 30 years of experience representing co-ops, condos, as well as individual owners and shareholders. To submit a question for this column, click here. To arrange a free 15-minute telephone consultation, send Steve an email or call 646-780-7272. 

You Might Also Like

image
Sell An owner in our condo building stopped paying common charges. What can our board do to get paid?
image
Live 5 things to consider before hiring a managing agent for your co-op or condo building
image
Live A commercial tenant in our co-op building stopped paying rent. What can we do about it?

 

Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.

topics:

Ask a Co-op & Condo Lawyer boards co-op board Co-ops Coronavirus staff
SHARE
TWEET
BRICK’S PICKS
NYC apartment building with AC units
My neighbor's dripping AC is driving me crazy. What can I do?
Historic brick facades of NYC apartment buildings
Getting overcharged by a landlord? Here’s how the Tenant Protection Unit helps rent-stabilized tenants
Apartment buildings in Soho
New Rent Guidelines Board report justifies a rent freeze, tenant advocates claim
Brooklyn apartment buildings
Understanding net effective rent: Here's how to calculate your real monthly rent
image
How much should you renovate your NYC apartment or house before selling?
Council Member Shahana Hanif hold press conference before the City Council vote on Arrow Linen spot rezoning.
City Council signs off on 10-story towers for Arrow Linen site
Follow Brick on Instagram
@brickunderground | #brickunderground
Brick UndergroundBRICK UNDERGROUNDREAL LIFE. REAL ESTATE. REAL NEW YORK.
Social Links Footer
  • Facebook
  • Twitter
  • Instagram
  • Search
Main menu footer
  • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
  • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
  • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
  • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
  • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide

Get more news you can actually use...

Email Address

Delivered to your inbox weekly - for free.

*By signing up you agree to receive occasional emails on behalf of our sponsors

Footer Menu
  • About Us
  • Advertise

Copyright 2009-2024 by BND Ventures Inc | Privacy Policy | Terms of Service | Ad Choices | Login