I spoke to a caller who was asking about special assessments and how legal they were especially for someone who had owned thier unit for less than a year. This caller didn't even know that a special assessment is a demand for money that is in addition to the regular annual or monthly dues or maintenance fees. I explained that special assessments can be levied against owners for various reasons. Many times the reasons don’t make sense to the owners. Owners may refuse to pay them, especially if they didn’t know about them in advance, but there are consequences to not paying. Owners sometimes think they had “a fast one” pulled on them.
Unfortunately this particuliar owner did not do diligence before buying. In most cases these assessments do not come out of the blue. They occur for number of reasons:
* Deferred Maintainance - The board put off a maintenance project and in doing so the increase the cope of the project.
*Under estimates the cost of materials, services, and labor, the amount set for the operating budget was insufficient.
* No reserve study was done and the reserve funds are low.
* A shortfall in dues collections.
* The board does not want to increase dues to realistic levels so they depend on special assessments to fund large projects.
The caller then said they wouldn't pay. Unfortunately as an owner they are obligated to pay. Once the board makes the decision and votes to have a special assessment the owners are legally bound to pay. I suggested to the caller that she take the condominium governing documents to a lawyer for review. I am sure that for a fee the lawyer would explain everything that I just told her.
Unfortunately many condominium buyers do not look at the health of the association before buying. Its always a good step to talk to the neighbors and find out whats going on as well as getting financials and meeting minutes. Your REALTOR can help secure some of these documents during your inspection period.
Pacific Crest Reserves
WWW.PacCrestReserves.com
360-588-6956
Fax 360-588-6965
Toll Free 866-618-7764
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