May 6, 2024
When delving into the world of real estate, particularly condominiums, it’s essential to familiarize yourself with various terms and processes, including the concept of condo special assessments. As you embark on your journey of selling your condo, understanding the intricacies of special assessments becomes crucial. In this comprehensive guide, we’ll explore everything you need to know about condo special assessments and who is responsible for them when selling your property.
Before delving into the specifics of selling a condo with a special assessment, let’s first understand what a condo special assessment entails. Often referred to as a special levy, a condo special assessment is an additional charge imposed on condo owners, separate from their monthly condominium fees. This levy is typically imposed to cover unforeseen expenses or fund necessary repairs and improvements within the condominium complex.
Condo boards may impose special assessments for various reasons. One common reason is to bolster a low reserve fund, which helps cover ongoing maintenance and repair costs within the building. Additionally, special assessments may be levied to cover costs arising from unforeseen events such as lawsuits against the condo corporation or catastrophic damage to the property. Capital improvements and renovations not accounted for in the reserve fund study report may also prompt the imposition of a special assessment.
As a seller, it’s essential to be aware of your obligations regarding condo special assessments. When selling your condo, the condominium association is obligated to inform you about any pending or upcoming special assessments. This information is typically provided in the unit’s resale certificate, which outlines details such as the amount of the special assessment, the reason for its imposition, and your share of the assessment as the unit owner. It’s crucial to understand these details and factor them into your selling process.
If a pending special assessment exists on the unit you’re selling, you’ll be responsible for paying it once you become the new owner. It’s vital to consider this financial obligation when evaluating your budget and deciding whether to proceed with the purchase. Understanding the reason behind the special assessment is essential, as it ensures you’re prepared to address any underlying issues once you assume ownership of the property.
In some cases, condo owners may feel compelled to protest against a special assessment, either due to its magnitude or concerns regarding its allocation. While you have the right to file a complaint or protest against a special assessment, it’s essential to have valid reasons and potentially garner support from fellow condo residents. However, if your protest is unsuccessful, you’ll still be required to pay the special assessment as mandated by the condominium association.
Condo boards follow a specific procedure when imposing special assessments, which involves assessing the scope of the project or repairs, consulting professionals, and obtaining approval from a majority of condo owners. This process ensures transparency and accountability in the imposition of special assessments, allowing condo owners to understand the rationale behind the levy and its associated costs.
There are several misconceptions surrounding condo special assessments that warrant clarification. Contrary to popular belief, special assessments are not static and may be subject to change based on various factors such as inflation or increased maintenance needs. Additionally, special assessments are not intended to cover unnecessary luxuries but rather essential repairs and improvements to maintain the property’s integrity.
As a condo owner, it’s essential to take an active role in condo governance to ensure transparency and accountability in the management of special assessments. This may involve seeking legal advice, questioning large expenditures, and participating in board elections to influence decision-making processes. By staying informed and engaged, condo owners can safeguard their financial interests and contribute to the overall well-being of the condominium community.
Navigating condo special assessments when selling your property requires careful consideration and understanding of your rights and obligations as a condo owner. By familiarizing yourself with the reasons for imposing special assessments, your obligations as a seller, and the process of determining and protesting special assessments, you can approach the selling process with confidence and clarity. Remember to seek guidance from reputable real estate professionals and legal advisers to ensure a smooth and informed transaction process.
Hi! I’m Erin Crocker. I’m a real estate lawyer with over 10 years of experience in Alberta and British Columbia real estate law. I love technology and efficiency. I’m on a mission to create a modern, digital closing experience for buyers and sellers through technology, transparency and sharing knowledge.
