If you own a condo or townhome, you’re probably familiar with the monthly assessment. It’s the amount every owner pays to the homeowners association to fund projects that involve the the whole building.
Despite paying this regular amount every month, every once in a while, you might get a notice for the dreaded special assessment. This is a one-time extra assessment owners have to pay to cover an unforeseen building expense. Ideally, the monthly assessments payments help to fund the building’s reserves, which can handle all costs related to the building. When the unexpected happens, such as sudden damage or the need for unforeseen repairs, these reserves might not prove sufficient, which is when a special assessment enters the picture.
But a special assessment should never come as a surprise if you’re involved in the running of your building and go to the homeowners association meetings. Every special assessment has to be approved by a vote of the association board, which usually happens after a meeting in which the owners get to express their concerns.
Special assessments are almost universally disliked, but the thing is, they’re rarely frivolous. The association board knows special assessments are unpopular, and would not pass them unless the funds were truly necessary. One way to protect the association from having to institute special assessments is to provide ample extra funds in the building reserves. However, this is also not optimal, because owners don’t want to be paying more than they have to in their regular assessment every month just to avoid the possibility of a one-time special assessment.