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This entry was published on 2014-09-22
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SECTION 339-JJ
Borrowing by board of managers
Real Property (RPP) CHAPTER 50, ARTICLE 9-B
§ 339-jj. Borrowing by board of managers. 1. To the extent authorized
by the declaration or the by-laws, the board of managers, on behalf of
the unit owners, may incur debt. In addition, subject to any limitations
set forth in the declaration or the by-laws, the board of managers, on
behalf of the unit owners, may incur debt for any of the purposes
enumerated in paragraph (b) of subdivision two of section three hundred
thirty-nine-v of this article, provided that (a) such debt is incurred
no earlier than the fifth anniversary of the first conveyance of a unit
and (b) the incurrence of such debt shall require the consent of a
majority in common interest of the unit owners.

2. In connection with a debt incurred by it, the board of managers, on
behalf of the unit owners, may (a) assign the rights in and to receive
future income and common charges, (b) create a security interest in,
assign, pledge, mortgage or otherwise encumber funds or other real or
personal property that it holds, (c) agree that, to the extent of any
amounts due under any of the provisions of the agreements under which
the debt was incurred and subject to the provisions of subdivision two
of section three hundred thirty-nine-l of this article, all common
charges received and to be received by it, and the right to receive such
funds, shall constitute trust funds for the purpose of paying such debt
and the same shall be expended for such purpose before expending any
part of the same for any other purpose, and (d) agree that at the
lender's direction it will increase common charges to the extent
necessary to pay any amount when due under any of the provisions of the
agreements under which the debt was incurred. The preceding sentence
shall not be construed to authorize the board of managers to create a
lien on the common elements. Any such assignment may provide that, in
the event of a default, the lender shall have the right of the board of
managers to file liens in the lender's name on units for unpaid common
charges pursuant to sections three hundred thirty-nine-z and three
hundred thirty-nine-aa of this article and the right to foreclose such
liens pursuant to section three hundred thirty-nine-aa of this article.

3. Nothing in this section shall impair rights under any loan or other
agreement existing prior to the effective date of this section or limit
any right or power that a board of managers would otherwise have.