A special assessment is a charge given to all homeowners within the association for improvements and/or repairs to the property. Usually, the charge will be divided between all homeowners and levied in addition to the regular assessments charged each month. Special Assessments is a great way for the community to make general improvements of the overall land.

The problem with Special Assessments in a transaction of property is that most Special Assessments owed by the Seller will need to be paid at closing and parties in the transaction may not be aware of such condition at the negotiation table.

For example, a condo is being sold from NA HOA for $300,000.00. The HOA has levied a Special Assessment monthly charge to each homeowner within the association of $900.00 a month for a total of two years. That is a $21,600.00 charge for each homeowner within those two years. The Seller has been paying for exactly a year now, so he only owes half ($10,800.00). Most HOAs require this assessment to be paid at closing if the condo is being sold. This will not be reflected until the Estoppel letter is ordered (most of the time it is after the inspection period). Now, who pays?

This is a common problem seen many times, especially in Miami-Dade County. How can we avoid this? Real Estate Agents shall include this in the Sales Contract. This is a great opportunity to negotiate the price of the property and be able to come to terms with specific payments from each party for when closing comes. In addition, our specialists can also help with the drafting of such language in a sales contract. If you have any questions regarding Special Assessments and how you can better help your client, please contact our office.