What is a Special Assessment?
If you own or are buying a condominium, you may come across the term “special assessment”. What does that mean? Well, there’s a regular assessment, usually monthly, that you are paying towards the association’s general maintenance expenses. But when there’s a large scale improvement or repair that wasn’t budgeted for, the association needs to get the money from somewhere. So what do they do? They assess it to the homeowners. It’s not a part of the regular expense; hence, it’s “special”.
Often when you see a special assessment, it’s for a big-ticket items like a roof repair, tuckpointing, sudden damage to the building, or some other large renovation or repair. Special assessments can be a few dollars or thousands of dollars, so make sure you do your diligence if you’re buying . A Section 22.1 Disclosure is key to help you determine what costs you may be looking at in the near future. Even if you do all the diligence you possibly could, you may end up owing a special assessment anyway if there’s an emergency repair needed.
As a condominium owner or condominium purchaser, make sure you are setting a little something by for a rainy day (i.e. a special assessment) in case you ever need it!