Introduction to Condo Assessments
Condominium owners often face financial challenges when special assessments are levied, especially when they are unexpected and substantial. These assessments are typically used to cover necessary repairs, upgrades, or other significant expenses when the association’s reserve funds are insufficient.
Understanding Special Assessments
Special assessments are a common practice in condominium associations and are used to fund critical projects or repairs that are not covered by the association’s regular budget. All unit owners are required to pay the special assessment, as agreed upon when purchasing the condo. The consequences of not paying can be severe, including delays in critical projects and financial strain on the entire community.
Consequences of Not Paying Special Assessments
If a unit owner is unable to pay the special assessment, the association has the right to take legal action. This can include placing a lien on the unit and, if not resolved, pursuing foreclosure to recover the unpaid amount. While this is usually a last resort, it highlights the importance of addressing the issue promptly.
Options for Unit Owners Facing Financial Difficulties
Unit owners facing financial difficulties may be able to work with the board or property manager to set up a payment plan, spreading the cost over time. However, these options are typically at the discretion of the board and may not be available in every situation. Other options include borrowing money from a family member or tapping into the equity in the unit.
Alternative Solutions for Senior Citizens
For senior citizens, exploring a reverse mortgage may be a viable option. While this type of loan is not ideal for every circumstance, it could help with special assessments, as it does not require monthly payments.
Considering Selling the Condo
If none of the above options work, unit owners may consider selling their condo and using the proceeds to buy an apartment that is more aligned with their budget. While this option is far from ideal, it is preferable to being foreclosed, as it allows unit owners to preserve their equity in the apartment before it is consumed by the costs associated with foreclosure.
Conclusion
In conclusion, special assessments can be a significant financial burden for condominium owners, especially those living on a fixed income. However, there are options available for those facing financial difficulties, including payment plans, borrowing money, and exploring alternative solutions such as reverse mortgages. Unit owners should reach out to their board or property manager to discuss their options and avoid severe consequences such as foreclosure.
Frequently Asked Questions
- What is a special assessment?: A special assessment is a fee levied by the condominium association to cover necessary repairs, upgrades, or other significant expenses.
- What happens if I don’t pay the special assessment?: If you don’t pay the special assessment, the association has the right to take legal action, including placing a lien on your unit and pursuing foreclosure.
- Can I set up a payment plan?: Yes, you may be able to set up a payment plan with the board or property manager to spread the cost over time.
- What options are available for senior citizens?: Senior citizens may be able to explore a reverse mortgage to help with special assessments, as it does not require monthly payments.
- Should I consider selling my condo?: If none of the above options work, selling your condo and using the proceeds to buy an apartment that is more aligned with your budget may be a viable option.
Q: Our condo board just passed a huge special assessment to fix the roof. I live on a fixed income and cannot afford to pay it. Is there anything I can do? — Ruth Ann
A: Special assessments can be a financial challenge for condominium owners, especially when they come unexpectedly.
These assessments are typically levied when the association’s reserve funds are insufficient to cover necessary repairs, upgrades, or other significant expenses.
While procedures for handling special assessments can vary depending on your condominium’s governing documents and state laws, the general principles are consistent.
All unit owners are required to pay the special assessment. When you purchased your condo, you agreed to follow your association’s rules, which include contributing to shared expenses.
If someone is unable to pay, the consequences can be severe. Associations rely on these funds to maintain the property, and unpaid assessments can lead to delays in critical projects, placing a financial strain on the entire community.
Your first step is to reach out to the board or property manager.
Many associations are willing to work with owners who are facing financial difficulties. This might include setting up a payment plan to spread the cost over time. However, these options are typically at the discretion of the board and may not be available in every situation.
For those who fail to pay and do not make arrangements, the association has the right to take legal action. This could include placing a lien on your unit, and if not resolved, pursuing foreclosure to recover the unpaid amount.
While this is usually a last resort, it underscores the importance of addressing the issue promptly.
You can look into borrowing money from a family member or tapping into the equity in your unit.
If you are a senior citizen, consider exploring a reverse mortgage. While this type of loan is not ideal for every circumstance, it could help with yours, since a reverse mortgage does not require monthly payments.
If none of these options work for you, you can also consider selling your condo and using the proceeds to buy an apartment aligned with your budget. While this option is far from ideal, it is preferable to being foreclosed, as it allows you to preserve your equity in the apartment before it is consumed by the costs associated with foreclosure.
Board-certified real estate lawyer Gary Singer writes about industry legal matters and the housing market. To ask him a question, email him at gary@garysingerlaw.com, or go to SunSentinel.com/askpro.
