B.R. from New York writes:
Dear Mister Condo,
Hi, Mr. Condo! Do you know if condo special assessment fees are matters of public records? I live in and am trying to narrow my search for a new condo to 3 different condo buildings. I want to know if these 3 condos have assessments in addition to their monthly maintenance charges. If I went to town hall, would I be able to research these fees? Thanks so much for your help with this issue.
Mister Condo replies:
Hi, B.R.! My answer is “yes and no”. I doubt your search of town hall records will reveal current special assessments. However, such assessments must be revealed at the time of sale and should be part of the resale package and/or purchase and sale agreement. Simply asking the question of the seller should give you a straight answer about current special assessments. However, you still need to beware as special assessments that are looming may not be revealed and the seller is not under any obligation to reveal what “might” happen a year or two (or even a month or two) down the road when the 15-year old roof needs replacing and there isn’t enough money in the Reserve Fund to cover the repair. Special assessments issued before you take possession of the unit are the responsibility of the current owner. Once you take possession of the unit, any special assessments levied are your responsibility.
Your best bet is to ask to see a copy of the current budget and a balance amount for the Reserve Fund. A healthy Reserve Fund is a generally good indicator that a special assessment isn’t likely any time soon. However, any condo association can find itself needing to raise cash for a variety of reasons and that cash only comes from one place – the unit owners. Either the money was collected and held in Reserve over time or unit owners will be asked to pony up when it is needed. One final consideration is that the association may even take out a HOA loan to pay for repairs. If so, those common fees that look enticing today may ned up increasing substantially to cove the debt service for the HOA loan. Ask the right questions and you’ll likely find the answers you are looking for. Good luck!