In the early '80s, NBC broadcasted short "the more you know" segments, which were educational messages on various subjects. They were on the money! Our blogs are here to help, to educate and to spark conversation!
You purchased a beautiful new condominium and created your home, where you find comfort. You also find comfort in knowing what your expenses are to run your home and knowing each month what to expect, BUT what happens when the unexpected happens!
The Special Assessment.
Many condominium homeowners are blissfully unaware of special assessments and are often shocked when they learn about them for the first time.
In short, they are additional payments that all unit Owners need to make when for example, the Corporation expects to be over budget in their operating account, which requires a special assessment to ensure that the Corporation's fiscal year does not end in a deficit. They can also be levied due to capital projects, such as replacing a boiler, waterproofing a parking structure or roof replacement. Essentially, the Corporation needs money, and you, as a member of the Corporation, are expected to contribute.
A special assessment is needed to keep the community operational.
Depending on the issue, these payments can run from a few hundred dollars to tens of thousands. Generally, homeowners are given the option to make payments over time.
What happens if a homeowner can not make these payments? Like common element fees, these payments are due (on or before the dates provided); if not paid, a lien can be registered.
When purchasing a condo unit, the best option for mitigating or understanding your risk relating to a special assessment is to ask questions and understand what, as a unit owner, you will be responsible for; a solid Real Estate Agent will do this for you.
Relating to responsibility? Will you be responsible for replacing your windows, or is the Corporation responsible? This information can be found in the Corporation's governing documents, which will be provided to you when you order a status certificate.—another tip. ALWAYS order a status certificate before purchasing a unit.
The types of questions you could ask include but are not limited to the following;
When were the following items replaced/repaired, or are they due for replacement;
windows, roofing systems, driveways, mechanical equipment such as boilers
Are there any expected capital projects on the horizon? Which could include;
Roof replacement, septic system replacement, repaving of a community or structural repairs.
There are ways that special assessments can be avoided; it takes excellent planning from your Property Management Firm, perfecting budgets, creating preventative maintenance schedules and future planning.
Onyx can help! Reach out to learn more by email email@example.com
Photo Credit - The Atlantic