Special Assessments in Condo Buildings

Special Assessments in Condo Buildings: An Overview

In the world of condominium ownership, the term "special assessment" can invoke feelings of anxiety, curiosity, or confusion among unit owners. While regular monthly maintenance fees are a standard and expected part of condominium ownership, special assessments in condo buildings are less frequent and can catch owners off guard. This article aims to demystify special assessments, explaining what they are, why they occur, and how they impact condo owners.

What Are Special Assessments?

Special assessments are fees that are charged to condo owners in addition to their regular monthly maintenance or association fees. These fees are collected for specific projects or unforeseen expenses that weren’t accounted for in the annual budget.

Why Are Special Assessments Levied?

  1. Capital Improvements: Over time, the condominium building or complex may require upgrades. This can be due to wear and tear, changing regulations, or the desire for modern amenities. Examples include roof replacement, elevator upgrades, or installation of energy-efficient windows.

  2. Unforeseen Repairs: Natural disasters, significant structural issues, or sudden system failures (like heating or plumbing) can lead to unexpected costs, and in turn, special assessments in condo buildings.

  3. Legal Settlements: In some cases, the condominium association may face legal challenges that require significant payouts. To garner the cash needed for those payouts, there can be special assessments to unit owners. 

  4. Budget Shortfalls: If the reserves aren't sufficient to cover annual operating costs or if unexpected expenses arise, a special assessment may be necessary.

  5. Replenishing Reserves: While condo associations have reserve funds to address some of these concerns, those funds can get depleted faster than expected. Special assessments can help replenish these funds.

How Are They Determined?

The board of directors or the condo association typically determines the need for a special assessment in a condo building. They will estimate the cost of the project or expense and divide it among the unit owners. The assessment can be based on unit size, ownership percentage, or other predetermined methods laid out in the condo's governing documents.

How Can They Impact Condo Owners?

  1. Financial Burden: The most immediate impact of a special assessment is financial. Owners may be required to pay a significant amount, either as a lump sum or in installments.

  2. Property Value: Both the reason for the assessment (e.g., a deteriorating facade) and the assessment itself can impact property values. While an upgraded amenity might increase value, frequent assessments or significant deferred maintenance can decrease it.

  3. Sale Complications: When selling a unit, potential buyers may be wary of buildings with frequent special assessments or significant upcoming projects.

Tips for Condo Owners:

  1. Stay Informed: Attend association meetings and be proactive in understanding the building's financial health and upcoming projects.

  2. Emergency Fund: Consider setting aside funds in anticipation of potential assessments.

  3. Insurance: Some insurance policies might offer coverage for certain special assessments, so it's worth reviewing your policy or discussing with your agent.

  4. Due Diligence: If you’re considering buying a condo, review the minutes from recent association meetings and the status of the reserve fund. This can give you insight into potential future assessments.


Special assessments are an integral part of condo ownership, addressing the reality that large projects or unexpected expenses can arise. While they can be concerning for unit owners, understanding their purpose and being prepared can mitigate potential stress. Proper governance, regular communication, and financial transparency by the condo board can also help ensure that special assessments are managed effectively and equitably.

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