Special assessments help keep dues low

Our association is specially assessing all the owners several extra payments to fund a refinance of a loan we took out for the clubhouse renovation from a few years ago. Can they do this?

When your association has a unique expense that regular maintenance dues cannot cover, it can pass a “special” assessment. These assessments can be a onetime payment or spread out over a period of time. However, unlike regular dues, they don’t continue indefinitely. Once their purpose is funded, the assessment is complete, and the money can’t be used for any purpose other than what it was created for.

Generally, a board can pass a special assessment without a full vote of all owners. The board must specifically notify owners in advance that the issue will be voted on at an upcoming meeting and must publicly decide. As with many association-related matters, your community may have more stringent requirements, so check your community’s documents.

Special assessments are often levied for needed repairs the association cannot currently afford or to renovate the community. Common examples are for roofing projects, to replace fences or repave roads. Since your association may not have the necessary reserves, and it isn’t realistic to expect homeowners to pay for the entire repair up front, your board may borrow the money from a bank and have the special assessments repay the loan.

While it is unpleasant to pay extra, it’s often the only way to maintain a community while keeping monthly dues as low as possible.