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What is a Special Assessment and Why Does it Matter?
Most people, including agents, don't even think to ask about special assessments-ones in place or even any that are under discussion. It's not a pleasant topic, but one buyers need to know about so they can make educated decisions.
Even well-run complexes can end up with special assessments. I know of one in San Jose where they replaced the roofs but the "guaranteed for life" roofing product performed poorly, the company making it was sued til there was nothing left and the homeowners had to get new roofs via special assessment.
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 ... more
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