HOA Special Assessments Explained: Why Condo and HOA Owners Get Hit With Extra Bills

Homeowners associations (HOAs) and condominium associations collect regular dues to cover routine expenses such as landscaping, insurance, and staff. But when a major, often unexpected, expense arises — a roof replacement, elevator overhaul, storm damage, or a lawsuit settlement — the association may not have enough money set aside to cover it. In that situation, the board can levy a special assessment: an additional, typically one-time charge billed to every owner, on top of regular dues.

Why Special Assessments Happen

Associations are supposed to build up reserve funds over time, ideally guided by a professional reserve study that estimates the remaining useful life and replacement cost of major components like roofs, siding, HVAC systems, and pavement. In practice, many associations have historically underfunded reserves to keep monthly dues low and attractive to buyers. When a big-ticket repair comes due sooner than expected, or costs run over budget, the shortfall has to come from somewhere — and that somewhere is usually a special assessment.

Other common triggers include:

• Storm, fire, or water damage not fully covered by the association's master insurance policy
• Rising insurance premiums or deductibles that blow through the operating budget
• Legal settlements, litigation costs, or fines
• Government-mandated inspections or repairs, such as structural or safety recertifications
• Catch-up funding required by new state reserve laws

The Post-Surfside Shift in Reserve Rules

The 2021 collapse of the Champlain Towers South condominium in Surfside, Florida, prompted several states to tighten reserve and inspection requirements for condominiums. Florida's legislature, for example, enacted structural integrity reserve study requirements and phased out associations' ability to waive or reduce reserve funding for certain components, effective for many associations starting in 2025 under state law. Associations that had underfunded reserves for years are now required to fund them more fully, and many are doing so partly through large special assessments rather than gradual dues increases. Other states, including California and Colorado, have also updated reserve and disclosure rules in the wake of Surfside. Because these rules vary by state and continue to evolve, owners and buyers should check current requirements with their state's real estate regulator or the association's attorney rather than assume rules from one state apply elsewhere.

What Owners and Buyers Should Check

Special assessments can range from a few hundred dollars to tens of thousands of dollars per unit, and they are usually not optional — owners who don't pay can face liens, interest, and even foreclosure in extreme cases, similar to unpaid dues. Before buying into an HOA or condo, and periodically after moving in, it's worth reviewing:

• The association's most recent reserve study and percent-funded level
• Current and prior years' budgets, and whether dues have kept pace with expenses
• Board meeting minutes for discussion of upcoming repairs or known deficiencies
• Any pending or recently approved special assessments and their payment terms
• The master insurance policy, including windstorm, flood, and liability coverage and deductibles
• State-specific disclosure documents, often called a condo questionnaire or resale certificate

Lenders also pay attention to this. Fannie Mae and Freddie Mac have specific condo project eligibility requirements, including questions about pending litigation, reserve funding, and deferred maintenance, because a financially troubled association can affect a building's ability to get project approval — which in turn affects whether buyers can obtain conventional financing in that building.

If You're Facing an Assessment

Governing documents (the declaration, bylaws, and rules) typically spell out how a board can levy a special assessment, including any owner vote requirements and notice periods. Many associations offer installment plans rather than requiring a lump sum, and some states require this option or cap how large an assessment can be without a membership vote. Owners who believe an assessment was improperly levied, or who need financial help, should review their state's condominium or HOA statute, request the board's supporting documentation (such as contractor bids and the reserve study), and consider consulting a real estate attorney familiar with community association law.