What is a Special Assessment?

By: Robert M. Nordlund, P.E., R.S.
January, 2004

A Special Assessment is an unplanned, special tax levied upon the members of an association. Sometimes a special assessment comes about due to misfortune (in order to meet a large insurance deductible or a non-insured loss), or due to poor planning (failing to set aside sufficient funds in advance for a predictable expense).

A special assessment can be a single demand by the association for a lump sum, or it can be an amount spread over multiple payments to provide owners with some payment flexibility. Some associations even provide a small discount if the total is paid in full in advance.

When is a special assessment a "dues increase"?

A special assessment is not really a special assessment when the increase is intended to be a permanent change. That situation is called a "dues increase". A special assessment is a temporary increase in revenues to the association, whether in the form of a single payment or spread out as long as multiple years. If the "special assessment" were to remain in place, it would eventually provide too much income to the association.


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