Who Pays for a Special Assessment at Closing?

If you’re selling your home, unexpected fees like a special assessment can come up at the closing table. A special assessment is an extra charge levied by a homeowners association (HOA) or local government for specific projects, such as repairing a roof, resurfacing roads, or upgrading community amenities. Typically, the seller pays any assessments that are due or approved before closing, while the buyer covers those approved afterward — though this can sometimes be negotiated in the purchase agreement.

Whether you’re selling a home in Chicago, IL, San Diego, CA, or Orlando, FL, this Redfin guide explains who typically pays the special assessments at closing, the factors influencing this decision, and how sellers can prepare to their advantage and avoid any surprises. 

What is a special assessment and why do they happen?

A special assessment is a fee imposed by a homeowners association (HOA), condo board, or even a municipality to cover large expenses that regular dues or taxes don’t fully cover.

Common reasons include:

• Major repairs like a roof replacement or structural work.
• Infrastructure costs such as repaving roads or sewer upgrades.
• Community improvements like new amenities, landscaping, or safety upgrades.

As communities age, special assessments are becoming more frequent due to increased expenses for maintenance, insurance, and materials. Property owners should factor these potential fees into their long-term financial planning.

Who is typically responsible for paying the special assessment?

Whether the seller or buyer is responsible for paying a special assessment depends on timing and what’s written in the purchase contract. 

• Before closing: If the assessment is approved and billed before the sale closes, the seller usually pays.
• After closing: If the assessment is imposed after the buyer takes ownership, the buyer generally assumes responsibility.
• Installments vs. lump sums: Assessments can be one-time or spread over time. The contract will declare if the seller pays in full or just their share.

Factors that determine responsibility

While timing plays a large role in determining who pays for a special assessment, state laws, HOA rules, and contract negotiations can also factor for buyer or seller responsibility.

For instance:

• State or local laws: Some states require sellers to settle all assessments before transfer. For example, Florida HOAs often file liens that must be cleared before closing.
• HOA/condo bylaws: Association documents may define how assessments are handled during a sale.
• Negotiation terms: Buyers may request that sellers cover part or all of an assessment; sellers can counter with credits or price adjustments.
• Title/escrow review: These services usually flag any unpaid or pending assessments before closing.

Turning a special assessment into a seller advantage

Handled proactively, a special assessment can actually help you stand out to buyers. Addressing it early builds trust and makes your home more attractive, turning a potential obstacle into a negotiation asset.

How to manage and leverage it

• Pay in full before closing: Eliminates uncertainty and shows transparency.
• Offer a credit: Lets buyers manage the cost their way.
• Negotiate a split: Sharing costs based on timing or fairness demonstrates flexibility.
• Use an escrow holdback: If the final amount isn’t confirmed, setting funds aside shows good faith and responsibility.

Real-life examples of seller strategies

• Condo roof replacement: Seller pays half of a $15,000 HOA assessment and credits the rest.
• Road project: Buyer assumes charges levied after signing since they weren’t billed pre-closing.
• HOA pool renovation: Mid-transaction vote—contract terms decide who pays.
• Deferred maintenance: Seller covers the cost upfront to keep the sale moving.

Preparing as a seller to avoid surprises

To prevent unexpected costs or last-minute complications, sellers should focus on early preparation and clear communication. Use this final pre-closing checklist to confirm all obligations are addressed and ensure a straightforward, confident closing process.

Seller checklist:

• Review documents: Go through HOA meeting minutes, budgets, and reserve studies for any signs of upcoming projects or assessments.
• Confirm with the HOA: Ask about pending or proposed special assessments so you can address them before listing.
• Disclose early: Be upfront about any known or potential fees, buyers appreciate honesty and it builds trust.
• Clarify contract language: Work with your Redfin agent to outline who pays what if a special assessment arises.
• Plan your budget: Set aside funds or negotiate credits for possible assessments, especially if your HOA has limited reserves.

FAQs: Who pays a special assessment at closing?

1. Can I refuse to pay a special assessment?

If you are the seller, paying the special assessment is typically your responsibility. It cannot be refused if it was already approved and billed before closing. Attempting to shift the responsibility to the buyer can delay or kill the deal.

2. What if the buyer walks away over an assessment?

Nondisclosure or a lack of negotiation can lead to deal cancellation. Generally, transparency and flexibility help preserve agreements.

3. Do I have to pay future installments if I move before they’re due?

Unless stipulated in the contract that the seller must pay the full balance, the buyer is typically responsible for any installments due after closing.

4. What if the assessment is approved but not billed yet?

Responsibility depends on the contract. If both parties know about it, they can negotiate who pays before closing.

5. Can the buyer back out if I don’t disclose a pending assessment?

Yes. Failure to disclose a known assessment can be considered a serious omission and may lead to cancellation or legal action.

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