Special Assessment
An extra fee charged by an HOA or condo board for major repairs or improvements not covered by regular HOA dues.
What You Need to Know
A special assessment is a surprise bill from your HOA—often thousands of dollars—to cover unexpected costs like roof replacement, elevator repairs, or lawsuit settlements.
How It Happens:
- HOA discovers major issue (foundation crack, asbestos, failed infrastructure)
- Reserve fund doesn't have enough money
- Board votes to charge homeowners directly
- You get a bill—sometimes $5,000, $10,000, or more
Real Examples:
- Condo building needs $2M roof replacement, 200 units = $10,000 per unit assessment
- HOA loses lawsuit, $500,000 settlement = $2,000 per home assessment
- Pool renovation, $150,000 cost = $1,000 per homeowner
Warning Signs of Future Assessments:
- Low HOA reserves (under 6 months of expenses)
- Aging infrastructure (20+ year old buildings)
- Deferred maintenance ("we'll fix it later" attitude)
- Recent special assessments (poorly managed)
How to Protect Yourself:
- Review HOA financials before buying (reserve fund balance, recent assessments)
- Ask about known upcoming repairs
- Budget 0.5-1% of home value annually for potential assessments
- Attend HOA meetings to vote against bad decisions
The Bottom Line: Special assessments are one of the hidden costs of HOA living. A well-managed HOA with healthy reserves rarely needs them. A poorly run one can hit you with surprise bills yearly.
Sources & References
This information is sourced from authoritative government and academic institutions:
- investopedia.com
https://www.investopedia.com/terms/s/special-assessment.asp
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