W.L. from outside of Connecticut writes:
Dear Mister Condo,
My condo is under contract and set to close very soon. I just received a notice about a week ago of a meeting of the owners to approve/disapprove an assessment of $750,000 ($7,500/unit). I immediately notified the buyer’s agent and invited the buyer to attend the meeting. The assessment was approved last night (the buyer was out of town… supposedly). Is the buyer obligated to close? Note: I am willing to finance the $7,500 amortized over 3 years. Note 2: Closing attorney says buyer is obligated to close because he will ‘enjoy’ all the benefits of the expenditure.
Mister Condo replies:
W.L., congratulations on selling your unit. Special Assessments are ugly for so many reasons. The timing of this one as you are selling your unit is almost calamitous. The liability for the assessment is with the unit owner of record when the assessment was levied. So, depending on when the closing date and time and transfer of deed for your unit occurred, the assessment is on the unit owner of record at that time. The purchase and sale agreement you have with the new owner is a separate entity and your attorney can best advise you on what legal options you have if the buyer breaks that agreement, for whatever reason. So, in the simplest of terms, look at the date and time the assessment was levied. Look at who owned the unit at the date and time of the assessment. That is who owns the assessment. As for offering to finance the assessment for the new buyer, that is a decision you need to make. Personally, I would not offer that option as it isn’t your problem, but very well could be if the unit owner defaults on the repayment. Then you will need your attorney for a whole other reason. Good luck!
2 thoughts on “Timing of Special Assessment Hampers Condo Unit Sale”
Our seashore Condo building has 4 units. One of the units was recently “sold” by the estate of the deceased owner to one of the adult children of the owner. A sibling of the buyer has asked me ,as treasurer, to transfer 1/4 of the Association checking account balance as of the date of sale, to the Estate of the seller. The buyer would then, presumably, pay this same amount back into the Association account for our regular expenses such as insurance, repairs and maintenance. This does not feel right to me and others. Should sellers take there “share” of these funds on the sale of their unit?
B.V., unless you governing documents state otherwise, there is no such thing as an owner’s “share” of the common fund. Common funds and Reserve Funds are property of the Association. You are correct to feel that this is not right. Good luck!