The words “special assessment” bring goosebumps to many condo owners & with good reason! These additional fees can appear to come out of nowhere if you don’t approach your condo purchase properly & do your homework on the building!
A special assessment occurs when there are repairs that need to made to a condo building but the existing reserve fund doesn’t have enough cash on hand to cover the expense. As a result, owners are left with an additional lump sum that they must pay to cover the costs.
While it’s impossible to avoid special assessments, there are ways you can help protect yourself by thoroughly researching the building before you purchase a unit!
The first document that can help give an indication of the financial side of the building is known as the reserve fund study which details whether or not the property has enough cash on hand for any repairs/expenses. It’s best to look this document over with a legal & financial expert to ensure that you aren’t stuck with any hidden repair costs down the road.
Another important document to look at is the status certificate, which is essentially the equivalent to a home inspection for the entire condo building. This will breakdown if the systems within the building are in good condition, all of the details pertaining to the property management company, your units monthly common expenses & much more.
If you have any questions or concerns about how a special assessment might affect you & your condo purchase, feel free to contact us or leave a comment below!