Monday, January 07, 2013

What are Special Assessments on condominium properties?

What are Special Assessments on condominium properties?

A special assessment is an additional payment or a levy that a condo board  has to impose when unexpected shortfalls or unexpected expenditures occur in  the budget, or when an expensive system has to be replaced (i.e., windows,  mechanicals) and there is not enough money in the reserve fund to cover for  it.

Special assessments often occur in condos that were built before 2001, when  reserve fund studies were not mandated by the previous Condo Act. As a  result, developers and boards failed to build up sufficient  reserve funds  for future replacements.

The fact that the owners have paid this already means that you will not have  to assume the additional payments when purchasing this condo, which is  great.

Buying a condo townhome is the same risk as buying a condo apartment -  anytime you buy a condo you are becoming responsible for the debt of the  condo (shared with the other owners). Condo townhomes are less likely to  have special assessments as there are not as many expenses due to less  amenities in the building.

As an agent, we ensure to request a status certificate that your lawyer  would review to make sure the  reserve fund of the condo is in good standing and has sufficient money.

As for the increase in condo fees, they usually increase each year, but the amount varies and it is stated in the status certificate for each particular building. It is usually a small amount (under $20.00) but again, each
situation varies.

If you have any further questions or would like to view this condo please let me know.

Thank you!
Mark Argentino
Mississauga Real Estate

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