Every condo owner dreads these two words: SPECIAL ASSESSMENT! The common reason why a condo has a special assessment is simply poor planning by the condo association. Special assessments are always often controversial and expensive.
What is a special assessment?
A special assessment is a fee approved by a homeowners association to cover items, usually major repairs or building upgrades, not provided for in the budget. A special assessment can range anywhere from $50-$3,000+ per owner depending on the level of the reserve account. A common cause of special assessment with dc condos is usually the elevator, roof maintenance, or mismanagement by the property management company.
When does a special assessment occur?
Every time you pay your monthly condo dues a portion goes into a reserve account, which is required by law to have a certain amount to pay for the repair and maintenance of the commonly areas. These common areas include but not limited to the roof, siding, decks, windows, and exterior doors. When the common areas need to be replaced, the condominium association will use their reserve account to pay for the expenses. When a condominium association does not enough money in their reserve account to pay for the replacement or repairs, they ask the owners for the money through a special assessment.
How to avoid the special assessment?
There are a few things that you can do to avoid special assessments and poorly run condominium associations. During the homebuying process, you should give yourself an opportunity to review the condominium resale certificate. The condominium resale certificate will have the entire itemized budget. Unfortunately only reviewing the financials of a condominium association, can give you a limited insight into the health of the building and association. You must also consider the age of the building and how much it will cost to replace some of the major common areas.
In order to find out more information about the health of the condo association, I would also encourage homebuyers to speak to a member on the condo board. Another option is to google the building to find any forums or reviews dedicated to the condo.
Hopefully you found this post useful! If you would like more information about Washington DC real estate, please contact Jason Trotman at 301-452-4767. If you’re new to DC, I’d especially like to extend a warm welcome. I value the opportunity to help my clients find the home that meets their needs and provide them with professional, reliable service.