Condominium purchasers ought to satisfy themselves that the condominium they are about to purchase is not soon to be the subject of a Special Assessment cash call.
Condominiums are directed by a Board of Directors and managed, most often, by a professional manager. The Board has a duty to ensure that the condominium’s property is properly maintained. From time to time there is not enough money in the condominium’s reserve accounts to pay for all repairs needed. When that occurs the Board of Directors will usually look to the individual condominium owners to make up any shortfall. The Board does so by a Special Resolution which requires all owners to pay an extra amount, over and obove their normal condominium fees.
A cash call.
Sometimes such Special Resolution cash calls ask for several thousands of dollars. Sometimes even more. The money will have to be paid. Penalties for non-payment are usually high.
How will a Purchaser satisfy her or himself as to whether there are any Special Resolution cash calls tied to the condominium they are considering? The answer is simple–ask the realtor. Call the management company and ask them. Find out the names of the members of the Board and ask them.
Don’t rely upon someone else to ask those tough questions for you. It is your investment, do the due diligence.