§ 339-JJ — Borrowing by board of managers

§ 339-jj. Borrowing by board of managers. 1. To the extent authorized\nby the declaration or the by-laws, the board of managers, on behalf of\nthe unit owners, may incur debt. In addition, subject to any limitations\nset forth in the declaration or the by-laws, the board of managers, on\nbehalf of the unit owners, may incur debt for any of the purposes\nenumerated in paragraph (b) of subdivision two of section three hundred\nthirty-nine-v of this article, provided that (a) such debt is incurred\nno earlier than the fifth anniversary of the first conveyance of a unit\nand (b) the incurrence of such debt shall require the consent of a\nmajority in common interest of the unit owners.\n 2. In connection with a debt incurred by it, the board of managers, on\nbehalf of the unit owners, may (a) assign the rights in and to receive\nfuture income and common charges, (b) create a security interest in,\nassign, pledge, mortgage or otherwise encumber funds or other real or\npersonal property that it holds, (c) agree that, to the extent of any\namounts due under any of the provisions of the agreements under which\nthe debt was incurred and subject to the provisions of subdivision two\nof section three hundred thirty-nine-l of this article, all common\ncharges received and to be received by it, and the right to receive such\nfunds, shall constitute trust funds for the purpose of paying such debt\nand the same shall be expended for such purpose before expending any\npart of the same for any other purpose, and (d) agree that at the\nlender's direction it will increase common charges to the extent\nnecessary to pay any amount when due under any of the provisions of the\nagreements under which the debt was incurred. The preceding sentence\nshall not be construed to authorize the board of managers to create a\nlien on the common elements. Any such assignment may provide that, in\nthe event of a default, the lender shall have the right of the board of\nmanagers to file liens in the lender's name on units for unpaid common\ncharges pursuant to sections three hundred thirty-nine-z and three\nhundred thirty-nine-aa of this article and the right to foreclose such\nliens pursuant to section three hundred thirty-nine-aa of this article.\n 3. Nothing in this section shall impair rights under any loan or other\nagreement existing prior to the effective date of this section or limit\nany right or power that a board of managers would otherwise have.\n