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Most people know that paying association dues comes along with living in a condo. However, those aren’t the only fees that you could be charged. Condos also occasionally charge additional fees known as special assessments.
In this post, I’ll cover what assessment fees are, how they work, and how you can find out if the condo association you’re thinking of buying into is charging one. Read on to learn more.
What is a special assessment?
Put simply, a special assessment is a fee that you may have to pay in exchange for maintenance or improvements done by your condo association. If there isn’t enough money in the association’s reserves and major work needs to be done – such as replacing windows or fixing a broken elevator – the cost will be split among the condo’s residents and charged in the form of a special assessment.
It’s important to note that this fee will be in addition to your regular association dues. That said, depending on the association, they will either collect the fee by tacking a portion of the cost onto your monthly bill for a set period of time or by asking for it in a lump sum.
How can prospective buyers find out if there’s a special assessment?
Condo associations are required to be upfront about any existing special assessments. They make them known by listing them on each unit’s resale certificate. You’ll be given the document before shortly after your offer is accepted, so be sure to read it carefully.
However, even if there is no current special assessment, there are a couple other documents that you’ll want to read over in planning for the future. In particular, the Declaration of Covenants, Conditions, Restrictions, and Easements (CC&Rs). In part, this document outlines the procedures that the association must follow in order to levy a special assessment.
You’ll also want to look over the association’s financial documents. These will show you the amount of funds that the association currently has in reserves. If the reserves are low on funds, it could be a sign that that the association will need to levy a special assessment in the event of an emergency expense.
Are you required to pay special assessments?
Unfortunately, yes, if you decide to buy into a condo association where there’s a special assessment, it has to be paid. In some cases, you can negotiate with the sellers to have them pay the fee on your behalf. Otherwise, it will end up being your responsibility.
If you already live in the condo association, you do have the right to protest a special assessment by filing a complaint with your condo board. However, unless you have strong support among your co-residents, your request will probably be denied. In that case, you’d still be required to pay.