Reserve Funds And Assessments
How Are Assessments Calculated?
If the work needs to be done at a later date, say eight months, the amount will be spread out over that period, and each apartment owner will pay $500 a month in assessment charges, in addition to their monthly maintenance fees. If it’s urgent work (like replacing a boiler during winter), the board may take on debt to meet the expense, and the repayment of the debt is divided over apartment owners in the form of assessment charges.
Other Things You Need To Know About Assessment
- You cannot avoid paying assessments just as you cannot stop paying your monthlies.
- Many sellers disclose (in the listing) if there is an assessment charge currently in place. If not, the buyer’s agent or attorney can find out about it during their due diligence, and you can negotiate about who will pay it with the seller.
- The building’s condition and knowledge about the reserve fund can give you a good idea of whether you may have to pay for an assessment later on (once the building is improved).