Special Assessment
Also known as: HOA Special Assessment, One-Time Assessment
A one-time charge levied by an HOA on homeowners to cover unexpected expenses that are not covered by regular dues — such as major repairs, legal costs, or reserve fund shortfalls.
Detailed Explanation
Special assessments are additional charges on top of regular HOA dues. They are levied when the HOA needs money for something not covered by the existing budget or reserves — major roof repairs, legal fees from disputes, storm damage repairs, or infrastructure replacement.
Special assessments can be thousands or even tens of thousands of dollars per homeowner. When an HOA transitions from builder control to homeowner control, underfunded reserves may result in a special assessment to bring the fund to an adequate level.
New construction communities are particularly susceptible to special assessments in the early years because the builder may not have adequately funded the reserves during the control period.
In Your Contract
Special assessments may be mentioned in the HOA documents. Check the reserve fund balance, reserve study (if one exists), and the annual budget to assess the risk of future special assessments.
Key Points
- 1A one-time charge for unexpected HOA expenses.
- 2Can be thousands to tens of thousands of dollars.
- 3New communities are at higher risk due to potentially underfunded reserves.
- 4Check the HOA's reserve fund before buying.
- 5The transition from builder control to homeowner control is a high-risk period.
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