Real Estate Investment:Surprise! It?s A Special Assessment

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Whether you are a buyer or seller of a condominium, an unpleasant surprise that can occur during the sale is a “special assessment.”

A condo association can impose a special assessment on the condo owners in order to pay for a repair or improvement that impacts all or some of the condo owners, for example a roof, siding, or paint. What can qualify as a special assessment entirely depends on the association’s rules.

On the positive side, a special assessment pays for an upgrade that often improves resale value.  On the negative side, it’s an extra expense that can scare away buyers.

Assessments can be planned in advance or can be an emergency.  Despite a real estate agent’s due diligence in representing a seller or buyer, a special assessment can be levied at any time during the sales process- before, during and after.

For example, immediately after listing a condominium in Newington, I called the property manager for the association. I was told that there was a special assessment in the process of being approved.  The owners were not even aware of it - it was going to be announced at an upcoming meeting.  This was all while negotiating an offer - and the special assessment was a factor.

The only thing a buyer and seller can do during the sale is to keep in touch with the property manager because they are often the first to know about any expenses on the horizon. Buyers should also be aware that a condominium complex with older components, such as roof, chipping paint, driveway, wood decks, are prime candidates for special assessments in the future - so keep your eyes open.

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