It’s one of the worst things that can happen in the middle of a real estate deal: the condo association issues a special assessment on the unit. Who is responsible for paying what may be a very hefty fee? The answer is, it depends.
Special assessments are levied in Florida under the authority of the Florida Condominium Act, which allows associations to add periodic assessments in addition to their standard monthly fees. These levies are usually done to pay for pricey things, such as damage from a major event like a hurricane or fire; the loss of a lawsuit by the association; or to buy or replace expensive items like landscaping, pools, or new roofing.
A special assessment may become the obligation of whoever owns the condo on the date the assessment is approved by the condo board. That would require the seller to pay off the entire assessment before closing. Or, the real estate contract may shift the burden to the buyer, stating that if an assessment comes down after the contract is signed but before the deal is closed, the seller is off the hook. Sometimes, the buyer and seller come to a middle-of-the-road arrangement in the contract, where the seller agrees to pay a portion of the assessment in a lump sum at closing and the buyer assumes the rest of the charge, which, depending on the terms set by the board, maybe stretched out over months or even years. It is crucial that the contract specify this in a way that both parties can live with–one of several reasons I believe it is imperative for a lawyer to review your real estate contract at the outset.
Of course, if the seller doesn’t disclose an assessment he knows about before the contract is signed, that may shift the entire payment to the seller.
Special assessments are serious business; if they are not paid according to the board’s decree, the association can put a lien against the property. That is why they should never be ignored.
Before you sign a real estate contract, or if you have questions about a special assessment levied in your condo, contact the Law Office of Gary M. Landau by email or call 954-979-6566 for a free phone consultation. Real estate attorney Gary Landau personally returns all calls to him.