Special Assessments: Why Are Special Assessments Such A Critical Issue?
This is the phrase that every condominium unit owner dreads to hear. In theory, the operation of a condo building is similar to that of an apartment building. Both buildings collect income; rent for apartment buildings, and monthly assessments for condominium buildings. Both types of buildings pay out expenses; typically, natural gas, electricity, water, insurance, and perhaps payroll for the doorman. In addition to the recurring monthly expenses, the major components of the building, such as the roof, boiler, air conditioner, must be repaired or replaced from time to time. Larger condo buildings are managed by professional property management firms. These professional property management firms in turn hire professional engineering firms to come in and make a study of the estimated remaining useful life of each of the major components of the building, and also to estimate what the replacement cost of those items will be. This is known as a Reserve Study. Based upon the Reserve Study, t
