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BLOG / 04.08.20 /Eric P. Blaha,Kenneth R. Jacobs,Emanuela Lupu,Thomas W. SmithandDomenick J. Tammaro


On April 7th, one of our professional colleagues sent a well-worded request to the New York District Office for an “interpretation” of the SBA rules that initially denied eligibility to cooperatives and condominiums for loans under the Paycheck Protection Program (“PPP”). We are advised that their letter has been “kicked upstairs” to SBA headquarters in Washington for review.

We are following up with our own letter specifically addressing the unique status of cooperatives and condominiums in New York State. Hopefully the SBA will grant some flexibility based on how co-ops and condos are organized within individual states, even if it continues to avoid a blanket determination.

Should Co-ops and Condos apply for PPP loans in the meantime?

We’re caught between legal and practical advice. The Application for a PPP loan requires the applicant to certify that “The Applicant is eligible to receive a loan under the rules in effect at the time this application is submitted that have been issued by the Small Business Administration (SBA) implementing the Paycheck Protection Program under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (the Paycheck Protection Program Rule).” [Emphasis added.] Is that true right now?

As we have stated in prior Alerts, we think the SBA’s interpretation under the “Interim” Rules is legally incorrect. Pressure is also building among community associations nationally, as well as within New York, for the SBA to change its position. If you believe your certification is correct and that you should qualify, then you might still apply so long as you think the benefit is worthwhile. As a practical matter, the worst that might happen is that the application is simply denied.

EIDL DISASTER LOANS. So far in April, we have not heard of many associations that are experiencing substantial revenue losses from lost maintenance. (The test may come in May or June, as owners suffer the effects of layoffs or business losses.) A few associations are suffering from lost rents from commercial tenants. If an association is having trouble paying payroll or other operating expenses, it may qualify for a federal Economic Injury Disaster Loan (“EIDL”). While this type of loan may not be for everyone, it can be made to non-profits as well as for-profit businesses. It can include an emergency advance of $1,000 per [threatened] employee, up to $10,000, that can be converted into a grant. For further information, CLICK HERE for one helpful site.

NYC SMALL BUSINESS CONTINUITY LOANS. New York City had been advertising the availability of loans for up to $75,000 available at a 0% interest rate to small businesses (fewer than 100 employees) in New York City who suffered a 25% or more decrease in revenue as a result of COVID-19. Unfortunately, the City has been overwhelmed with applications and has suspended further processing.


The United States Tennis Association has advised that persons refrain from playing tennis during the COVID-19 emergency, recommending instead that everyone stay active and healthy with creative “tennis-at-home” variations. We will happily forward all suggestions to the USTA.

We will continue to keep you updated on new PPP developments. If you need assistance on any of our topics, please contact one of our partners on our Co-op/Condo team.