As we enter spring, many communities are planning capital improvement projects that might require a special assessment. While not ideal, a special assessment is a common method for funding large projects. In a perfect world, associations would have enough funds in reserves to pay for all projects. To achieve that, monthly assessments would increase significantly to adequately fund reserves for capital repairs. While it might seem shortsighted, many associations opt to keep monthly assessments low and pass special assessments when needed. Low monthly assessments are attractive to buyers, and a special assessment is no longer viewed as a “deal killer” since it’s generally paid in full by the seller at closing time.
The Illinois Condo Property Act and the Common Interest Community Association Act give a Board of Directors the authority to adopt a separate (special) assessment with certain notice provisions. These assessments can be a one-time charge, or spread out over months or even years. For very large projects that require funding prior to collecting the additional assessment, a board might opt to finance the project, in which case the special assessment pays off the loan. An association’s governing documents might establish a limit on the amount a board can pass without owner approval, as well as a method for owners to overturn the assessment. However, state laws expressly grant the board authority to pass assessments without limitation in the event of an emergency or to bring a property into compliance with state or local laws.
It’s important for unit owners to read meetings notices, attend meetings, and read the meeting minutes. Far too often when a board passes a special assessment, the manager will hear from at least one owner stating they know nothing about the assessment. Special assessments don’t happen overnight. They are often discussed at more than one board meeting, disclosed in meeting minutes, and announced in detail (amount and reason) at least 10 days in advance of a meeting of the unit owners for the sole purpose of discussing the assessment. Staying informed about association affairs will make it much easier to plan for the added expense of a special assessment well before the due date.