A special assessment is a charge imposed by an HOA on its members for a specific purpose, such as capital improvements or repairs and maintenance. Special assessments are typically levied in addition to the regular monthly or annual assessment. Special assessments are imposed to finance certain improvements or services that will directly benefit the property owners who are being assessed.
Some benefits of special assessments include providing a dedicated funding source for specific projects, improving the appearance of an area, and increasing property values.
When a Special Assessment is Impossible: Condo Terminations
A condo association may vote to terminate a condo in a few different scenarios, such as if the property is not being well-maintained or if there is considerable damage or repairs that need to be made.
If a special assessment is paid, then the condominium association will have the money to pay for the repairs to the building that are needed. Of course, if the condo association has the money to pay for the repairs, then the repairs will be made, and the condo association will continue on. The problem with this option is that it will likely cost the condo owners money.
If the damage is caused by an event like a hurricane and the association has the right insurance coverage, the repair bill for the damage should not incur a special assessment. But if there was a need to catch up on deferred maintenance, the money to pay for the repairs would likely fall to the owners of the condo association.
For example, if the special assessment is $1,000,000, and there are 100 condo owners, each condo owner will have to pay $10,000. If the condo owners cannot pay the special assessment, then the repairs will not be made, and the condo association will have to look at other options. Sometimes this can be to get a loan to pay for the repairs, but there are times when banks are recalcitrant to offer a loan. In those instances, we have seen times when a reduced special assessment plus a smaller loan amount is approved, but there are times when that will not work either. On those occasions, a Condo Termination is worth considering.
All that being said, a special assessment may be a better option than a condo termination if the association is in good financial standing and the owners are willing to pay for necessary repairs and improvements.
If you have any questions about special assessements or just want to look at all the options on the table, please don’t hesitate to contact me.
We offer legal assistance in all matters of condominium association law, homeowners and community association law, real estate litigations and transactions, residential and commercial closings, and insurance law.
We pride ourselves of our level of commitment to our clients. We love what we do, and we do it with utmost care and professionalism.
Hello, my building is charging me interest on past due special assessment payments. I want to pay my debt but I’d like to know if there is a legal way to avoid paying interest charges. The first time I saw the charges only when I opened a letter from a collecting agency.
Can a Board of Directors, after a majority agrees to have the condo property assessed, increase the assessment for those who agreed and paid to cover those who did not pay at all, or, can a lien be put on the property of the owner who refused to pay?
If the condo Board institutes a special assessment for hurricane damage to a roof and the repairs are done requiring less money than assessed, can the condo board us the overage to pay for future insurance premiums or should the overage be returned to the individual owners?
Our HOA is a non-profit organization in FL and recently did a special assessment for the insurance increase. They didn’t provide a copy of the invoice showing the increased amount. We have over $700k in non-reserve funds. They are asking for $161k from all residents and took the remaining balance from the non-reserve funds. They have enough the cover the entire amount without being assessed. Is this legal? If they have the funds, are they allowed to do a special assessment. No financial statements for 6 months now and they assessed us.
Do the residents have a right to vote on special assessment?
Our HOA voted on a special assessment. If there is money left over from the special assessment project, can the HOA determine what they want to do with the money or are they required to refund the remaining balance? Are they required to inform the community if the scope of work on the special assessment has changed from when the original vote was cast?
Can a Florida HOA voted on a special assessment to support a 100% increase in insurance costs? We would prefer to have a special assessment, rather than an increase in HOA fees.