We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

Get insider access to our best financial tools and content

Get insider access to our best financial tools and content

Looking for the perfect credit card?

Narrow your search with CardMatch™

Get insider access to our best financial tools and content

Get insider access to our best financial tools and content

Get insider access to our best financial tools and content

Get insider access to our best financial tools and content

Get insider access to our best financial tools and content

Get insider access to our best financial tools and content

We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here’s an explanation for how we make money.

Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.

Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.

We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.

Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.

A special assessment is a levy that homeowners associations or local governments periodically charge homeowners under certain circumstances. The money may be used to pay for repairs, installations or other community-related construction or maintenance expenses that cannot be covered by the existing operating budget or cash reserves.

There are two types of special assessments — one that is charged by a homeowners association (HOA) and one that is charged by municipalities.

In communities managed by HOAs — like condos — and residential co-ops, homeowners pay monthly dues or fees to fund the upkeep of the community. This money is generally used to cover the cost of routine maintenance of community facilities, landscaping and sometimes even water and trash bills.

However, an HOA (or co-op board, in the case of co-operative buildings) may periodically levy what’s known as a special assessment that is separate from monthly homeowners dues. Special assessments are typically charged when the community experiences an unexpected or particularly large maintenance expense that cannot be covered by the association’s operating budget or its reserve funds.

When special assessments arise, the HOA may require homeowners to pay the fee in one lump sum or it may tack on a little bit extra to the monthly homeowners dues until the special assessment is fully paid off. The authority to levy these assessments is typically outlined in the HOA Covenants, Conditions and Restrictions (CC&Rs) document.

The other type of special assessment involves the dues that county or city governments may charge homeowners. A municipality may impose a special assessment on residents in a certain area to fund urgently needed repairs, maintenance or to upgrade the area with infrastructure – such as installing pavements, water and sewer lines or repairing roads. The money may also go towards regular services such as street lighting or fire protection.

Because the work benefits people who have purchased homes in specific areas, such special municipal assessments or levies will be restricted to only a limited group of property owners.

Special assessments are typically imposed in an emergency situation when something in the community breaks or a large unexpected expense occurs. They may also be charged to cover the costs of more significant or infrequent maintenance projects if an HOA does not maintain an adequate reserve fund to cover such infrastructure or maintenance expenses.

Special levies are paid for by the homeowners in the community directly impacted. In some cases the amount may need to be paid all at once, or the HOA may decide to charge extra dues each month until the assessment is paid in full.

As a homeowner, you can review the governing documents of your community, which include the Declaration of Covenants, Conditions, Restrictions, and Easements, as well as the articles of incorporation and also the bylaws for the community, to find out what sort of notice the HOA is required to give you regarding special assessments. These documents may also detail how such assessments are to be handled — whether the community is allowed to vote on the assessment and if there are certain specific conditions under which an assessment is allowed to be charged.

The exact amount of a special assessment varies based on the work being done. In the case of a homeowners association the amount of the repair or special project costs would be divided evenly among the number of homes in the community.

Say there are 100 homes in the association and the levy is being used to cover the $25,000 cost associated with installing a new irrigation system because the previous system unexpectedly broke, then that cost might be divided among the 100 homes. In this example, each homeowner would have to pay $250 towards the special assessment.

Special assessments charged by an HOA are different then a special assessment tax. As a homeowner, you will have to pay standard property taxes to the local government. Periodically, your local government may also charge a special assessment tax in addition to your property taxes, in order to pay for neighborhood projects. (See “Local government special assessment,” above.)

The money from special assessments is generally used to cover the cost of necessary infrastructure projects or other community improvements that benefit your specific area. Examples that may involve a special assessment include sewer and water system work, upgrading and maintaining roads and sidewalks, installing park drains or other public utility projects.

Only residents who will benefit from these upgrades or additions will be taxed. In addition, these projects typically increase the value of the real estate in area, which can benefit the homeowners funding the special assessment.

Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.

Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access BR Tech Services, Inc. NMLS ID #1743443 | NMLS Consumer Access

© 2022 Bankrate, LLC. A Red Ventures company. All Rights Reserved.