Definition: A special assessment is a one-time fee imposed on property owners by a homeowners association (HOA), condominium board, or local government to cover the cost of unexpected or necessary improvements, repairs, or infrastructure projects that are not included in the regular budget.
Explanation: Special assessments typically arise when major repairs or upgrades—such as roof replacements, elevator repairs, road resurfacing, or safety compliance improvements—need funding beyond what is available in the community’s reserve fund. Unlike regular HOA dues or property taxes, which are ongoing, a special assessment is usually a one-time or temporary fee assigned to homeowners within a building, neighborhood, or municipality.
For condominium owners, special assessments are common when unforeseen expenses arise, such as structural repairs following storm damage or legal compliance updates. In single-family home communities, local governments may levy special assessments to fund new sidewalks, sewer system upgrades, or road expansions that benefit all residents in a designated area. The cost may be divided equally among all owners or based on property size or assessed value.
Example: A condominium building requires a $1 million roof replacement, but the HOA’s reserve fund only has $600,000 available. The HOA board approves a special assessment to cover the remaining $400,000 and divides it equally among the 100 condo owners, requiring each owner to pay $4,000. While this expense is unexpected, it is necessary to maintain the building’s integrity and protect property values.