Special Assessments and what you need to know

If you are purchasing a property within a Homeowners Association (HOA), one important factor to understand is the possibility of a special assessment.

A special assessment occurs when an HOA does not have sufficient reserve funds to cover unexpected or large repairs within the community. When this happens, the HOA may require homeowners to contribute additional money to cover the shortfall.

What Is a Special Assessment?

Special assessments are typically issued when major repairs or events exceed the HOA’s budget or insurance coverage. A common example is hail or storm damage that impacts community-wide elements such as roofs, siding, or common structures.

While most HOAs carry insurance, claims do not always cover the full cost of repairs. When insurance falls short, the remaining balance is passed on to homeowners through a special assessment.

These assessments can range widely — we have personally seen them run anywhere from $2,500 to $10,000 per homeowner, depending on the scope of the repairs and the size of the community.

How to Protect Yourself as a Buyer

If you are concerned about the financial impact of a potential HOA special assessment, there are steps you can take:

• Review HOA financials carefully, including reserve studies and meeting minutes

• Ask questions during the due diligence period about past or pending assessments

• Speak with your insurance provider

Some homeowners insurance policies include coverage for HOA special assessments, or you may be able to add a rider for additional protection. Without this coverage, any assessment would need to be paid out of pocket.

Why This Matters

Understanding special assessments is an important part of protecting your investment and avoiding unexpected costs after closing. With the right information — and the right insurance coverage — you can move forward confidently when buying in an HOA community.

If you have questions about HOAs, special assessments, or how to evaluate a property before you buy, we're always happy to help guide you through the process.