What Are Special Assessments? [Homeowner Associations]

What is a special assessment for HOAs and condominium associations? If your community association imposes a special assessment, it's an extra fee homeowners are required to pay in addition to their regular monthly dues. 

It's not always appropriate to raise routine management fees, so why would an HOA need a special assessment? What's the process to require one within the governing rules of your association? We dig into some of the answers here, with insights from one of the best HOA management companies in the Puget Sound area!

Why Would HOA Boards Need a Special Assessment (In Addition to Management Fees)?

Adding an assessment on top of routine HOA dues can be tricky when communicating with community residents. If you've already experienced frustration or confusion about regular association management fees, boards must carefully consider the need for an additional amount and how to communicate it to the community appropriately.

There are a few possible reasons your homeowners association might need to impose a special assessment. These reasons can include:

• The board may have failed to properly calculate monthly expenses, resulting in a budget deficit. Without an additional assessment, your condo association board might have to reduce some services or close community resources until the shortfall is recovered. 
• Unforeseen repairs may require the extra financial resources that routine management fees can't cover. 
• If certain amenities or fixtures in the community require upgrading or replacing, homeowners might also be assessed for those additional costs. 
• The board and your community approve a new addition to the neighborhood, like a swimming pool or clubhouse. New projects often require funds above regular assessments to avoid a decrease in normal services and amenities. 

While there are plenty of reasons why it's appropriate for HOAs to add an additional fee to cover costs outside of an approved budget, it's important to follow guidelines outlined in your association's governing documents when considering and approving a new assessment. If you're not sure how to properly consider and approve a special assessment, a company providing professional HOA management services can guide your board members through the process. 

Special Assessments Are "Special" For a Reason

It's important to remember that special assessments should always be a last resort for HOAs. Boards should exhaust all other avenues before levying this type of fee on homeowners. They should also be aware of the process and expectations surrounding a special assessment before taking such a step. 

Maintain Relationships and Trust

One of the biggest reasons homeowners can feel taken advantage of by their HOA is when an unexpected and undesired expense arises. In these cases, homeowners are often required to pay an additional fee on top of their regular monthly dues—even if they're not happy about it. This can be a difficult pill to swallow, so homeowners must understand why their HOA board members might need to impose a special assessment and what the process will be for doing so.

If your community association is faced with the need for a special assessment, working with a professional management company can help ensure the process goes as smoothly as possible. Communicating with homeowners in advance and being transparent about why the assessment is necessary will help minimize frustration. Before your homeowners association faces this dilemma, be sure to communicate with one of the best community management companies in the Puget Sound area about how to avoid these issues!

Good communication can go a long way toward ensuring that homeowners are happy with their HOAs, rather than wondering what's happening behind closed doors. Good communication among homeowners is also key for understanding why fees are assessed and what the money is used for.

Calculate Special Assessment Fees Appropriately

When considering a new assessment, condominium association boards and HOAs must consider the fee amount carefully. If your homeowners association is considering a new special assessment, it's important to know the ins and outs of how these fees are calculated. In many cases, the assessment is usually calculated based on the individual homeowner's share of the total cost that's needed to cover the expense. 

By working with a professional community association management company, your board can ensure that homeowners are treated fairly and that the assessment process is handled in a way that maintains trust between homeowners and their community association.

Get Help With Special Assessments from an HOA Management Company!

If your HOA board has been considering a special assessment, it's important to approach these fees appropriately. Make sure there is a justified need for the extra fees assigned to residents and communicate this reason in a way that maintains trust and relationships with homeowners. Trestle Community Management can help association board members create an effective communication strategy that will address homeowner concerns about why they are being asked to pay more money on top of their regular monthly dues. We can also help you review budgets and costs for a project requiring additional funds to help you set an appropriate assessment amount for residents. 

Reach out to us today, so we can answer any questions you have or provide some guidance moving forward!

We cover many more important topics for HOAs in our free resource, "Best Practices for HOA Operations: A Checklist!"