Q: Our condominium association recently went through a fairly large special assessment to do some work because we don't have enough reserves. Times are tight, and some neighbors may find it difficult to pay their bills.What happens if someone can't pay a large special assessment? — Wilmena
answer: Many neighborhood associations have recently passed special inspections citing poor maintenance and lack of funds. Special assessments are fees charged to homeowners by homeowners associations to cover unexpected expenses or to fund future repairs or improvements. These assessments are typically in addition to regular monthly dues and can be expensive. It is typically voted on and approved by the association's board or members, depending on the community's governing rules.
Ask a Real Estate Pro: How can I find out what a condo will be appraised for before I buy it?
If homeowners in community associations such as HOAs, condos, or co-ops fail to pay regular or special assessments, they risk losing their homes to foreclosure and receiving personal money judgments. If the community takes legal action or takes repossession action, the homeowner must pay the assessed value plus costs such as attorney's fees, interest, and administrative fees. These costs can be very expensive and we have seen many cases where they are much higher than the unpaid appraisal.
Ask any real estate professional: Should you pay a special assessment for a project you think is a waste of money?
If the homeowner disagrees with the charge, they should contact the association immediately to discuss it and continue making regular payments while it is resolved. Even if the owner disagrees and actively objects, the assessment remains due and, if not paid on time, will accumulate along with additional recovery costs. Once you have paid your bill, you can continue to dispute the charge without increasing your debt.
Ask a real estate professional: Will I get my money back after I pay the special assessment in full?
When homeowners face financial hardship, most associations are willing to work with them to address the problem. It's important to maintain open and honest communication.
However, it is important to note that there are legal limits to what an association can do. By working with the association rather than against it, homeowners can achieve better results in resolving problems.
Gary Singer, a certified real estate attorney, writes about industry legal issues and the housing market. To ask him a question, email gary@garysingerlaw.com or visit SunSentinel.com/askpro.
