Special Assessment

A one-time or temporary charge levied on homeowners to fund unexpected expenses or large capital projects that cannot be covered by the operating budget or reserve fund. Special assessments often arise when reserves are underfunded and a major component fails prematurely — for example, a $500,000 roof replacement in a 100-unit community could mean a $5,000 per-unit special assessment. In California, special assessments exceeding 5% of the current fiscal year's budgeted gross expenses require approval by a majority of the membership (Civil Code Section 5605(b)). The board may levy a special assessment without member approval if it does not exceed that 5% threshold, or in an emergency involving an immediate threat to health or safety (Civil Code Section 5610). Associations typically offer payment in installments — often 6 to 24 months — to reduce the financial burden on homeowners. Boards should provide detailed documentation showing why the special assessment is necessary, how the amount was calculated, and what alternatives (such as a loan) were considered. Well-funded reserves significantly reduce the likelihood of special assessments, which is why maintaining a percent funded level of 70% or higher is recommended. Special assessments are legally enforceable obligations and follow the same collection procedures as regular assessments, including late fees and liens.