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For owners facing an association bill
Condo Special Assessment
The licensed agent behind this site defines a condo special assessment simply: a charge your association bills owners on top of regular dues, for a major repair, a reserve shortfall, a building loss or the master deductible. Your HO-6 helps pay it only when a covered cause of loss is behind the bill.
Below: why boards levy them, how notice works, how the bill is divided, what nonpayment can cost and where insurance fits.
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What is a special assessment on a condo?
It is any association charge outside the yearly budget, and the reason behind it tells you what to do next.
- Dues pay the planned budget
- A special assessment pays for what the budget missed
- Your declaration gives the board the power to bill
Your regular assessment, often called dues or common charges, funds the budget the board adopts each year: upkeep, management, the master policy premium and reserve contributions. A special assessment arrives when a cost shows up that the budget never planned for.
Florida's condo act draws the line in one sentence: a special assessment is any assessment charged to a unit owner apart from the one the annual budget requires1 (Fla. Stat. § 718.103(27)1).
Go deeper: the special assessment fee under other names
The same bill can carry different labels: special assessment, special assessment fee, levy, separate assessment or additional assessment. Read the notice for the purpose and the vote behind it rather than the label.
Payment terms vary too. Some boards ask for a lump sum; others spread the charge over months or years. Your notice or the board's resolution should say which.
Outside condominiums, real estate listings may use the phrase for a charge a city or county adds to a property tax bill for public work such as sewers or sidewalks. That is a government charge, separate from anything your association bills.
Why boards levy a special assessment fee
Most bills trace to a short list of causes, and the cause decides whether insurance has any role at all.
- Big repairs the reserves cannot fund
- A loss bigger than the master policy
- The master policy deductible
Repair or replacement assessment
A roof, elevator, facade, balcony or plumbing riser reaches the end of its life and the reserve account cannot cover the job.
Reserve shortfall assessment
The reserve fund has fallen behind what the building will need, and the board closes the gap at once instead of through dues.
Building loss assessment
Fire, wind or a burst pipe damages shared property, and repairs cost more than the master policy pays.
Master policy deductible assessment
After a claim, the association owes its deductible before its insurer pays, and that amount can be passed to owners.
Legal or mandated cost assessment
A lawsuit, a code change or required inspection work produces a bill nobody budgeted.
Go deeper: how reserve rules and deductible rules feed special assessments
Reserve rules that aim to prevent a special assessment
Ohio requires the board's yearly budget to carry reserves large enough to repair and replace major capital items without special assessments, unless the declaration or bylaws limit raising assessments without an owner vote, or a majority of owners waive the requirement in writing each year2 (Ohio Rev. Code § 5311.081(A)(1)2; see Ohio).
Massachusetts requires every condominium to keep an adequate replacement reserve fund, collected with common expenses and held apart from operating money3 (see Massachusetts).
Unless its instruments say otherwise, a Virginia board must commission a reserve study at least once every five years, review it at least yearly and adjust the budget as it sees fit4 (see Virginia).
Reserve rules lower the odds of a surprise bill, but they cannot remove it. A study can still run behind actual costs.
The master policy deductible as a common expense
Unless the association has opted out by a majority of all voting interests, Florida makes every association property insurance deductible, and any damage above that insurance, a common expense; among the exceptions, an owner pays uninsured repair costs for damage caused by the owner's own intentional conduct, negligence or failure to follow the declaration or rules, or by family, tenants or guests5 (Fla. Stat. § 718.111(11)(j)-(n)5).
How a condo special assessment gets approved and noticed
State law and your bylaws decide who votes, how much warning you get and what the notice has to tell you.
- Notice usually comes before the board votes
- The purpose has to be stated
- Some states let owners push back
In many associations the board adopts a special assessment at an open meeting. Some bylaws require an owner vote above a set amount or for certain projects. The insurance and assessment sections of your declaration and bylaws spell out the rule for your building.
A clear notice tells you:
- The purpose, in plain words
- The total and how your share was set
- The due date, or the installment schedule
- The meeting where it was or will be voted
Keep every notice and the minutes. If you file a loss assessment claim, your insurer will want both.
Go deeper: notice and approval rules in Florida, Illinois and Virginia
Florida special assessment notice
Florida owners must get written notice, also posted on the property, at least 14 days before a board meeting where a nonemergency special assessment will be considered, and it must give the estimated cost and the purposes6 (Fla. Stat. § 718.112(2)(c)1., 3.6).
Money collected may be spent only on the purpose named in the written notice, and any surplus left once that purpose is done can go back to owners or toward later assessments7 (Fla. Stat. § 718.116(10)7). More on the Florida page.
Illinois owner petition on a separate assessment
Illinois owners get notice of a board meeting to adopt a separate assessment, and, unless it is for an emergency or an expense the law requires, if it would lift the year's total assessments above 115% of the prior year's, owners holding 20% of the votes have 21 days to petition for an owners' meeting, where it stands unless a majority of all votes reject it8 (765 ILCS 605/18(a)(8)8).
An Illinois board can adopt a separate assessment for an emergency or a cost required by law without owner approval or the petition step, while additions and alterations to the common elements outside the budget need two-thirds of the total votes, and a separate assessment may be spread over more than one fiscal year9. More on the Illinois page.
Virginia additional assessment notice
When regular assessments fall short, a Virginia board may levy an additional assessment on every unit by undivided interest, with written notice of the amount, the reasons and the due date, and a lump-sum bill cannot fall due sooner than 90 days after notice10 (Va. Code § 55.1-1964(E)10; see Virginia).
How the special assessment bill is split among owners
Most special assessments follow the same share as your dues, but some charges can be aimed at a single unit.
- Your ownership share sets the usual split
- Damage one owner causes can land on that owner
- The master deductible has its own routing rules
The declaration usually assigns each unit a fixed share of the common elements, and that share drives both your dues and your slice of a special assessment. A larger unit often carries a larger share. Find yours in the declaration or ask the manager.
Florida assesses common expenses in the proportions the declaration sets, and in a residential condominium, or a mixed-use condominium created after January 1, 1996, each unit's share matches its ownership interest in the common elements11. Illinois has each owner pay common expenses in the same ratio as the ownership percentage the declaration assigns12.
Go deeper: when one unit gets the whole bill
Charging one unit owner for damage
For North Carolina condominiums created after October 1, 1986, the association may bill a common expense to one unit alone when the misconduct of that unit's owner or occupant caused it13 (see North Carolina).
Pennsylvania, unless the declaration says otherwise, lets the association charge a common expense only to the unit whose owner's negligence or misconduct caused it14 (see Pennsylvania).
Virginia, where the instruments expressly allow it, specially assesses costs that benefit fewer than all units, or that some occupants or their guests caused, against the units involved15.
Who gets the master policy deductible
Under the Illinois act, the board may treat the deductible on a claim as a common expense, bill it after notice and a hearing to the owners who caused the damage or where it began, or require the owners of the damaged units to cover it16 (765 ILCS 605/12(c)16).
That choice matters to you: a leak that starts in your unit can turn a shared bill into your bill alone. Check the insurance section of your declaration for the rule your board follows.
What happens if a special assessment goes unpaid
An unpaid special assessment can attach to the unit itself, so ignoring it rarely makes it go away.
- A lien can follow the unit
- A buyer can inherit past-due amounts
- Ask about installments before the due date
Many declarations add late charges, interest and collection costs to an overdue assessment. If you cannot pay in one sum, ask the board in writing whether it offers a payment plan, and do it before the due date.
Florida gives the association a lien on each unit to secure assessments, and a new owner is jointly liable with the previous owner for amounts unpaid at transfer17 (Fla. Stat. § 718.116(1)(a), (5)(a)17).
Go deeper: lien timing and the mortgage
In North Carolina, an assessment left unpaid for 30 days or more becomes a lien once the association files a claim of lien with the clerk of superior court, after mailing the owner a statement of the amount at least 15 days earlier18 (N.C. Gen. Stat. § 47C-3-116(a), (b)18).
In Massachusetts, the association's lien can rank ahead of an earlier first mortgage for up to six months of budget-based assessments, but special assessments, late charges, fines and interest are left out of that priority amount19 (M.G.L. c. 183A, § 6(c)19; see Massachusetts). You still owe them.
Collection steps and lien rules differ by state and by declaration. Read the collection section of your governing documents, and talk to the manager early if a bill will be hard to meet.
Does condo insurance cover special assessments?
Only when the bill pays for a loss from a cause your HO-6 covers. Upkeep, upgrades and government charges stay with you.
- Loss assessment is the part that answers
- The cause of the damage decides
- Your limit caps what it pays
The part of an HO-6 that responds is loss assessment coverage. Washington's regulator describes it as help with an assessment the association charges for a loss the community suffers, such as wind damage to several roofs beyond the master policy limits, covered when your own policy covers that cause20.
- Repairs, replacements, reserves: upkeep and saving ahead are not losses, so generally no.
- Upgrades and amenities: a vote to improve the building is a choice, not damage.
- Building loss or master deductible from a covered cause: often payable up to your limit, per your form.
- Government charges: often excluded; check your form.
Hold your share against your limit with the loss assessment calculator.
Go deeper: what regulators, the standard form and Florida law add
Maryland's regulator adds that a special assessment not caused by a covered peril, such as one for maintenance, is not covered, and that the coverage may carry its own deductible21.
The standard unit-owners form excludes assessments a governmental body charges you or the association22, under both its property and liability loss assessment parts.
The standard unit-owners form pays your share of an association assessment billed during the policy period for direct loss to property all owners hold together, from a peril covered under Coverage A other than earthquake, with one limit per loss however many assessments follow23. Company forms can change this, so check your policy.
Florida's consumer toolkit notes associations may assess owners for common-area damage their policy does not cover or their reserves cannot pay, but the peril behind the bill must be one your HO-6 covers24.
Florida writes a minimum into law. Policies there issued or renewed since July 1, 2010 carry no less than $2,000 for the combined assessments from one direct loss of a kind the policy insures25 (Fla. Stat. § 627.714(1)25). That is a floor, not a sizing guide.
Timing counts there too: the most a Florida policy pays toward an assessment is the limit in effect one day before the event that caused the loss, however late the association bills26. Raise a limit before a loss, not after.
Ask the board these questions before you pay, buy or vote
A few written questions can tell you whether a bill is coming, how your share was set and whether your policy can help.
- Purpose, total and your share
- Any link to an insurance claim
- What else is under discussion
- What is the purpose, and what is the total? Ask for the notice and the minutes of the vote.
- How was my share figured? Compare it with the share in the declaration.
- Is any part tied to a master policy claim or deductible? If so, send the notice to your insurer.
- Can it be paid in installments? Get the terms in writing.
- Are other assessments being discussed? Ask for the reserve study and the current budget.
Go deeper: buyers, sellers, landlords and townhouse owners
Buying or selling. Ask before closing about approved and pending special assessments, and settle in the contract who pays which installments. In Pennsylvania, the resale certificate must list the capital spending proposed for the current and next two fiscal years and the reserves set aside for it27, a useful early warning (see Pennsylvania).
Renting the unit out. The bill comes to you as owner, not to your tenant. See rental condo insurance for the landlord's side of the policy.
Townhouse or HOA communities. Homeowners associations can bill special assessments too, under their own documents. See townhouse insurance for how the coverage split changes.
Comparing coverage types. A stand-alone house policy has no master policy behind it, which is one reason loss assessment matters more in a condo. See condo insurance vs homeowners insurance.
Line up loss assessment limits before the next bill
The time to size loss assessment is before a loss, with the master policy deductible and your share in hand.
- Same limits quoted side by side
- How each form treats a deductible assessment
- You decide what to buy
Start with the association's master policy summary and its deductibles, then your share from the declaration. Your HO-6 declarations page shows the loss assessment limit you carry today.
One company's quote shows only how that company writes loss assessment. Quotes from several companies on the same limits show whether another treats your unit differently. Ask each which discounts or credits apply. Request a comparison; a quote does not bind coverage until you accept a policy and it is issued.
Condo special assessment questions
What is a special assessment on a condo?
It is a charge your association bills owners outside the regular budget, usually for a big repair, a reserve shortfall, a building loss or the master policy deductible. Your share normally follows the ownership share in the declaration, and the board's notice should state what the money is for.
What is a special assessment fee in real estate?
For a condo, it is an association charge on top of dues that a seller may still owe or a buyer may inherit, so ask about approved and pending ones before closing. For a house, the phrase can also mean a government charge added to the property tax bill for public work such as sewers.
Does condo insurance cover special assessments?
Sometimes. The loss assessment part of an HO-6 can pay your share when the bill comes from a loss caused by something your policy covers, up to your limit. Assessments for maintenance, reserves, upgrades or government charges are generally outside it. Check your form, and size the limit with the loss assessment calculator.
Can the board levy a special assessment without an owner vote?
Often, yes, within limits set by state law and your bylaws. Some documents require an owner vote above a set amount or for improvements. In Illinois, an emergency or a cost required by law can be assessed without owner approval, while additions and alterations need two-thirds of the total votes9. Read your bylaws for the rule.
How is my share of a special assessment figured?
Usually by the same share that sets your dues, listed in the declaration. Some declarations split certain costs equally, and some states let the association bill one unit alone when its owner caused the damage. Ask the manager to show the math if your figure looks off.
What happens if I can't pay a special assessment?
Late charges and interest often follow, and the unpaid amount can become a lien on your unit that usually has to be cleared before a sale. Ask the board in writing about a payment plan before the due date, and read the collection section of your declaration.
Should I raise my loss assessment limit after the board announces a special assessment?
Raising it helps with future losses, and may not reach the one already behind the bill. In Florida, the limit that counts is the one in effect one day before the event that caused the loss26. Elsewhere, check your policy. Review the limit at renewal against your share of the master policy deductible.
Before you renew, make one call.
A licensed agent compares several companies on the same limits. Asking changes nothing on your policy, and a quote never binds you.