SPECIAL ASSESSMENTS
A special assessment is a one-time or short-term fee used by the association to cover
an unexpected or emergency cost. For example, if the elevator needs to be replaced five
years earlier than expected, the HOA's regular budget might not be able to cover that
cost. The building needs a functional elevator, so the HOA is forced to issue a special
assessment to pay for the replacement. To issue a special assessment, boards must
review state laws and follow the process within the governing documents to ensure the
decision has merit and is lawful. A special assessment may be issued if:
• Reserve funds are too low to cover a major expense
• Insurance deductibles are higher than what's in the reserve fund
• New laws require immediate upgrades
• Natural disasters damage critical structures
• There's an operational budget shortfall
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