Condo special assessments are legal and, sometimes, necessary. Still, they can also come as an unwelcome surprise to many unit owners, especially considering they are an added expense. By understanding what these assessments are, when they are issued, and why they are needed, unit owners can better prepare themselves.
What are Condo Special Assessments?
A condominium special assessment is an extra fee that a condo association charges to unit owners. They are in addition to the regular condo dues. When regular dues aren’t enough to cover the association’s expenses, the board may need to levy special assessments.
Special assessments should be rare. If the condo board budgets correctly and maintains the reserves effectively, the need for special assessments shouldn’t come up often.
Common reasons for issuing a special assessment include:
- Emergency repairs such as roof damage or burst pipes
- Major replacements like elevators, siding, or plumbing systems
- Legal expenses or insurance gaps
- Natural disaster recovery
- Budget miscalculations
- Reserve funds falling short
Unlike condo dues, which owners pay regularly, condo special assessments are paid one time. That said, owners may also be able to enter a payment plan to settle this assessment in increments, depending on the governing documents.
Condo Special Assessment vs Condo Fees
A special assessment for condo communities differs from regular condo fees. While both are financial obligations, they serve different purposes.
Condo fees are recurring charges that fund the association’s operating budget. These payments cover routine expenses like maintenance, utilities, insurance, landscaping, and management services. They are predictable and typically paid monthly or quarterly.
A special assessment for condo owners is different. It is a one-time or limited-term charge that a COA uses to cover a specific shortfall or project. It is not part of the normal operating budget.
The key difference lies in timing and purpose. Regular condo fees keep the community running day to day. Special assessments address gaps, emergencies, or large-scale improvements that go beyond routine maintenance.
Are Condo Special Assessment Fees Legal in Illinois?
Yes, condo special assessments are legal in Illinois. State law allows condominium associations to charge these fees under certain conditions. The Illinois Condominium Property Act provides associations with the authority to issue special assessments when needed (765 ILCS 605/18).
Condo boards must follow proper procedures, including giving notice and holding open meetings. The board must also act in the best interest of the community. They can’t misuse funds or impose assessments without justification.
In Illinois, courts generally uphold the board’s authority as long as the association followed proper approval procedures, the assessment is reasonable in amount, and the assessment is used for legitimate purposes.
Is There a Condo Special Assessment Cap?
There is no statewide cap on condo special assessments in Illinois. Condo associations can impose evaluations as necessary, provided they follow their governing documents and state law.
Some condo declarations or bylaws may include internal limits or thresholds. These might require a unit owner vote for assessments over a certain amount. For example, a board may need owner approval for assessments that exceed three times the monthly condo fee.
That said, Illinois law does have certain protections in place (765 ILCS 605/18). If the total assessments for the current fiscal year (including any special assessment) would exceed 115% of the total assessments from the prior fiscal year, then:
- Unit owners holding at least 20% of the association’s votes can submit a written petition within 21 days of the board’s decision.
- The board must then call a unit owner meeting within 30 days.
- At that meeting, owners can vote to reject the assessment.
- Unless a majority of total unit owners vote to reject, the assessment is automatically ratified.
Condo Special Assessment Rules
Many associations have rules concerning condo special assessments. These rules serve to protect both the board and the association’s members.
Notice Requirement
Before issuing a special assessment, the board must provide written notice to all unit owners. This notice typically includes the amount, reason, and payment schedule. It may also outline the impact of the assessment on future fees or the reserve fund.
Most associations require at least 10 to 30 days’ notice before the board takes action. Owners should receive the notice by mail, email, or in a physical meeting packet.
Open Meeting
For most COAs, the board must vote on the special assessment at an open board meeting. This meeting allows owners to ask questions, voice concerns, and learn about the details of the assessment.
What Happens if I Don’t Pay Condo Special Assessments?
Assuming the special assessment is legal and enforceable, there are specific penalties that owners face if they fail to pay. These penalties can vary from one association to another. State laws and the governing documents can dictate what is and isn’t possible.
1. Late Fees
Most associations charge a late fee or interest for unpaid special assessments. This compounds the amount the member owes to the association. The condo’s governing documents should outline the specific requirements and conditions of late fees.
Sometimes, as a compromise, a COA would offer to waive all late fees if the owner settles their debt. This way, the association can secure the amount due while the owner can avoid additional fees.
2. Suspension of Privileges
Some associations might temporarily suspend a member’s privileges until they pay the full amount. This includes restricting access to amenities, such as the pool or clubhouse, for those who don’t pay.
3. Legal Action
If the special assessment remains unpaid, the COA can file a lawsuit to recover the amount due. Legal action can also mean hiring a law firm or collection agency. This could negatively affect the owner’s credit score.
4. Liens
Condo associations can place a lien on the unit if the owner doesn’t pay their special assessment. If the owner wishes to sell or refinance their mortgage, they must settle the debt first.
5. Foreclosure
In extreme cases, the association may initiate foreclosure proceedings after recording the lien. While rare, Illinois law does allow foreclosure, which means owners stand to lose their homes if they refuse to pay the special assessment.
A Necessary Charge
Condo special assessments are a tool that associations use when unexpected costs or large projects arise. Although they may be frustrating, they are legal, necessary, and often unavoidable. Unit owners should understand their financial obligations, while condo boards should know how to levy and collect special assessments to avoid liability properly.
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