What exactly is a special assessment from the HOA (Home Owners Association)?
When you live in a community with a home owners association, you’ll be charged a monthly HOA fee. This money goes towards paying for the amenities and services that the HOA provides. These services can be lawn maintenance, snow removal, common area maintenance and possibly exterior maintenance of the building you own. The HOA fees are calculated to give the HOA the necessary funds to provide these services. Remember, the HOA is a non-profit organization.
Just like you, the HOA needs to pay it’s bills. But what happens if an unexpected expense comes along that does not have the funds in the budget?
HOA Special Assessment
Allow me to give you an example. If we have a winter that hits us harder than expected with snowfall, there may not be enough money to cover the expenses of snow removal. In a situation like this, the HOA can levy a Special Assessment on all homeowners. The amount they would probably bill everyone for is the amount they need to keep the books balanced. Many times they will allow homeowners to pay either one payment, or to stretch the payments over a number of months.
However, the winter of 2018 -2019 had little or no snowfall. Thus, virtually no expenditures were made for snow removal. And this should result in a surplus in the budget. The HOA may decide to build up reserves. Possibly they may reduce the monthly HOA fees or not raise them as much as they expected to.
When the HOA needs extra money, they’ll look for the home owners to provide it. And if there’s a surplus, your monthly HOA fees will reflect that also.
When you’re ready to either buy or sell a home, contact Bunny and Art Reiman – the Adult Community Specialists.