Understanding Special Assessments in Residential Condos
Before we begin it’s important to note that you should check with your Calgary condo management company to best understand any special assessment that is being assessed due to repairs and renovations.
What is a special assessment?
A special assessment is an additional fee imposed on condo owners to cover unexpected or extraordinary expenses not covered by the regular condo fees. These expenses can include major repairs or renovations to the building, upgrades to common areas, or unanticipated expenses such as legal fees or insurance claims. The amount is determined by the condo property management and is typically based on the size of your unit and your share of the common areas. Special assessments can be a significant financial burden for condo owners and can affect the value of their property.
Am I able to contest a special assessment with condo management?
The rules around contesting an assessment can vary depending on the specific condo corporation and the governing legislation in the province or territory. However, in general, condo owners may have the option to contest a special assessment by attending a condo board meeting and raising their concerns or objections. It is important to review the condo bylaws and any relevant legislation to understand the process and requirements for contesting a special assessment.
If a condo owner does not want to pay a special assessment, they may have several options available. One option may be to negotiate with the condo board to come up with a payment plan or to defer payment until a later date. However, it is important to note that not all condo corporations may be willing to negotiate or defer payment.
Another option may be to take legal action against the condo corporation, although this can be costly and time-consuming. It is important to consult with a lawyer to understand the potential consequences and risks of taking legal action.
In most cases, not paying a special assessment can result in late fees, interest charges, and legal action from the condo corporation. It is important to review the bylaws and seek legal advice before taking any action.
How can I determine if my condo is susceptible to a special assessment?
Determining if your condo may be susceptible to a special assessment can be challenging, as unexpected expenses can arise at any time.
There are a few factors that could indicate a higher likelihood of a special assessment:
One factor is the age of the building. Older buildings may require more frequent and extensive repairs, which can lead to higher expenses and a higher likelihood of a special assessment. If the building has not been well-maintained or if major repairs have been deferred for an extended period of time, this can increase the likelihood of a special assessment.
Another factor is the level of amenities and services provided by the condo. If the building has extensive amenities such as a pool, fitness center, or security system, these can result in higher maintenance and repair costs.
It is important to keep in mind that unexpected expenses can arise at any time, even in well-managed condos. Having a contingency fund and regularly reviewing the condo corporation’s financial statements can help you prepare for potential special assessments.
What due diligence should I take when buying a condo?
First begin by requesting a copy of the condo minutes, for complete insight into past board meetings for a comprehensive overview of the building.
Second, request a copy of the condo corporation’s financial statements and budget to understand the level of reserve funds and predict potential expenses.
How much can an assessment be?
The amount can vary widely depending on the specific circumstances of the condominum corporation and the nature of the expenses that need to be covered. In some cases, a special assessment may be relatively small, while in other cases, it can be quite substantial and may even exceed several months of regular condo fees.
Special assessments can be a significant financial burden for condo owners, and it is important to understand what expenses are being covered and to review the financial statements and budget of the condo corporation.
If you have concerns about a proposed special assessment, it is important to contact your condo board and ask questions. The condo board can provide you with information on the specific circumstances of the special assessment and can help you understand your options.
By staying informed and proactive, you can better prepare for unexpected expenses and protect your investment in your condo.
