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
Monday, January 07, 2013
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