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What is a Special Assessment and Why Does it Matter?
What is a Special Assessment and Why Does it Matter? is a question I am commonly asked by first time home buyers. A special assessment occurs when the home owner's association's obligations / needs exceed cash on hand / cash reserves.
A homeowner's association has established guidelines outlining responsibilities which the HOA is responsible for. HOA dues often cover exterior maintenance, common area maintenance (walkways, pool, tennis, greenbelts), building insurance and other fees.
Some special assessments can be caused by an unforseen event, such an earthquake. It could be the extent of the deductible on a very large claim, such as when a whole building or entire complex is destroyed by fire.
More commonly, however, special assessments are the direct result of insufficient cash reserves to pay for needed upgrades and replacements.  A well-run HOA will set aside cash reserves for replacment components. A roof, for example, has a limited life expectancy. The roof is an important building component and must be replaced at intervals. If the HOA does not have the funds for the repairs, a special assessment will most likely be the outcome.
Many special assessments cost each owner thousands of dollars. There's one coming soon at a San ... more

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