What if owner can’t pay large assessment?

Q: Our condominium association recently passed a rather large special assessment to get some work done that we do not have enough money in reserve to cover. Times are tight, and some of our neighbors will have trouble paying. What happens if someone is unable to pay a large special assessment? — Wilmena

A: Many community associations have passed special assessments recently due to delayed maintenance and underfunded cash reserves. A special assessment is an expense charged to a homeowner by their association to cover unexpected expenses or to fund upcoming repairs or improvements. These assessments are typically levied in addition to regular monthly dues and can be significant. Depending on the community’s governing rules, they are typically voted on and approved by the association’s board of directors or the membership.

Homeowners in a community association, such as an HOA, condo, or co-op, who do not pay their regular or special assessments risk losing their home to foreclosure and having a personal money judgment against them. If their community takes legal or collection action, the homeowner will have to pay those costs, which include attorney fees, interest, and administrative expenses, on top of the assessment amount. These costs can be very high, and I have seen many cases where they are much higher than the unpaid assessment.

If a homeowner disagrees with a charge, they should contact the association immediately to discuss it and continue making regular payments while it is being worked out. The assessments remain due even if the owner disagrees and is actively fighting them, and if not timely paid, will pile up, along with additional collection expenses. Once the invoice is paid, you can continue to dispute the charge without getting deeper into debt.

If a homeowner faces financial difficulties, most associations are willing to cooperate to address the problem. Maintaining open and honest communication is key.

However, you need to be aware that there are legal limitations to what an association can do. By working with their association instead of against it, homeowners can achieve better outcomes in resolving issues.