Assessments

What are assessments as they relate to HOAs?

HOA assessments are typically fees that HOAs charge to community members to cover unbudgeted costs. Also known as “special assessments,” such levies may be imposed if a disaster strikes an HOA’s common property and repairs or replacement costs more than insurance will pay. They may also reflect the costs of special maintenance, such as unscheduled street repairs or the expansion of a water system’s capacity.

Special assessments stand in contrast to HOA dues, which are usually fees imposed to cover the costs of normal operations such as routine maintenance, landscaping, insurance, and administrative expenses.

Why are assessments important?

Assessments can be necessary in a host of situations. In a particularly bad winter, snow removal costs may far exceed the amount budgeted. In a dry summer, irrigation and/or replacement of drought-damaged landscaping may impose more costs than was reasonably planned for. Earthquakes, flooding, fires, and other natural or manmade disasters may also create repair or replacement costs that outstrip insurance settlements and HOA contingency funds.

HOA boards must explain the reasons for any special assessments, and homeowners usually have procedures available to question or to organize opposition to a given levy. In some states, assessments that exceed a certain percentage of the HOA annual budget must be approved by a majority of the membership.

How can you use “assessments” in a sentence?

HOA boards can vote to impose special assessments on property owners to cover unexpected costs.