What is a special assessment on a Boston condo or building?
Boston condo associations pay monthly fees. These fees in Beacon Hill typically range from $300 to $700 per month, but on Boston high rise condos they can go as high as several thousand dollars a month depending on what they cover. Some fees only cover exterior maintenance and cleaning the interior common areas, while others are more comprehensive, and may also cover common gym and concierge services.
Low Boston condo association reserves
Typically, a portion of the condo fees is allocated to the association’s reserve fund—essentially a rainy-day fund for larger, occasional expenses such as paving, re-roofing, replacing water heaters, exterior painting, or hallway flooring.
Yet unexpected expenses can also occur. Every once in a while, something big gives out, like a roof or an elevator, the reserves may not cover the costs. Thus, a special assessment is needed to cover an unexpected expense.
If your Boston high rise reserve is low or depleted when disaster strikes, you and your fellow condo owners will have to pay a special assessment. In some instances, assessments are tacked on to the monthly condo fees in small amounts until the debt is paid off; in other cases, the assessment is a one-time charge that must be paid by each homeowner as a lump sum.
How much money should be in reserve to avoid a special assessment?
Naturally, this raises the question: How much money belongs in the reserve fund? Unfortunately, there’s no magic number. It can range significantly depending on a number of factors, such as the number of condos and how old the building is.
A condo association assessment shouldn’t be confused with a special assessment tax
A special assessment tax is a surtax levied on property owners to pay for specific local infrastructure projects such as the construction or maintenance of roads or sewer lines. The tax is charged only to the owners of property in the neighborhood that will benefit from the project.