By Heather Michon
Correspondent
Back in April 2020, the Lake Monticello Owners Association (LMOA) was awarded a $646,843 loan under the Paycheck Protection Program (PPP), one of the many government programs designed to shore up the economy as the COVID pandemic began shutting down businesses across the country.
Now, the government wants that money back.
LMOA Board of Directors Chair Larry Henson told the audience at this month’s meeting that they had received a letter from the Department of Justice in mid-December notifying them that, as a 501(c)(4) homeowner’s association, it is ineligible for PPP loan forgiveness.
“This notification was unexpected,” General Manager Tom Schauder said in a follow-up letter to Lake residents, “since both the loan and the forgiveness applications had been approved by the SMA [Small Business Administration].”
PPP was designed to help eligible small businesses cover payroll and benefits for up to eight weeks at the height of the pandemic. These low-interest loans were eligible for forgiveness if the business used the funding for its intended purposes and did not need to be repaid.
The SBA forgave the LMOA’s loan in late May 2021.
PPP and other COVID-era funding programs were hastily implemented and poorly managed, and the federal government has spent the last several years trying to untangle the mess.
Over the last two years, many HOAs nationwide have faced demands from the DOJ to return PPP funds – or face legal charges under the False Claims Act. Conviction on FCA charges can result in fines and other penalties.
Mike Feazel of Lake Monticello News notes that $646,843 “would equal about 10 percent of the LMOAs budgeted revenue for 2025 or nearly $150 per property within LMOA.”
Schauder stressed in his letter that this issue is far from over.
“An attorney for our insurance provider is assisting with the response to the [DOJ] letter, and resolution may take several months.”
