Special assessment
A special assessment is a one-time charge a board levies on unit owners or shareholders, on top of regular maintenance or common charges, to cover an extraordinary expense the operating budget and reserves can't absorb. Typical triggers are façade work, boiler failures, litigation, or insurance shortfalls.
Frequently asked questions
Does a special assessment require a unit-owner or shareholder vote?
Usually no — most bylaws give the board authority to levy assessments up to a stated threshold or without limit. Vote requirements typically attach to amending the budget structure or borrowing, not to one-time assessments. Read your bylaws first.
Can unit owners deduct the assessment for taxes?
It depends on what the assessment funds. Operating-purpose assessments are generally not deductible. Capital-improvement assessments are added to the unit owner's cost basis (reducing capital gains at sale) but not immediately deductible. CPA territory.
What happens if an owner doesn't pay?
Same enforcement tools as unpaid maintenance/common charges — interest accrual, late fees, lien filing (condo), share cancellation proceedings (co-op), and ultimately foreclosure or eviction under the proprietary lease. Boards should not give informal extensions outside a documented hardship policy.
Should we borrow instead of assessing?
Often yes for large capital projects. Underlying co-op mortgages or condo capital loans spread the cost over 10–30 years, matching the useful life of the asset. The interest expense is real but smaller than the disruption of a six-figure per-unit assessment, and lenders treat it as normal building finance.