What is a Special Assessment?

Special Assessment is a term used to describe a temporary, unplanned tax levied upon the members of an Association on the basis of a membership vote. A special assessment can be a single lump sum demand by the Association, or collected in multiple payments.

Sometimes the need for a special assessment comes about due to misfortune (to meet a large insurance deductible or a non-insured loss), but most of the time Special Assessments are levied to compensate for poor financial planning (i.e., failing to set aside sufficient funds in advance for predictable reserve expenses). Funding reserves through special assessments should be avoided because they unfairly penalize one unlucky set of Association members at a particular point in time.