What is a Special Assessment? Tips & Advice For Buying a Condo. Top rated real estate agent Toronto
Thursday Oct 15th, 2020
**CHECK OUT THE FULL TRANSCRIPT BELOW**
What is a Special Assessment? 🏡
Toronto based lawyer, Jazz Dhillon, explains what a Special Assessment is along with his advice for buyers who are looking to purchase a condo that is undergoing a special assessment.
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Below are the clickable TIMESTAMP links for the video
00:26 - what is a Special Assessment?
00:37 - is a special assessment in addition to regular condo fees?
00:45 - various reasons for a special assessment
2:31 - what is the advice to clients who are looking to purchase a condo with a special assessment?
4:00 - contact information for Jazz Dhillon
4:11 - contact information for Karen Law
Full Video Transcript:
Karen: Hey guys, it's Karen from Toronto here.
And today we're joined by Jazz, who is a fantastic lawyer in Toronto.
Now in our last video, Jazz answered three common questions about condo maintenance fees. And continuing along with the topic of condominiums, something that buyers might come across when purchasing a condo, is a condo with a Special Assessment.
Jazz, would you like to explain what a special assessment is?
Jazz: condo corps can charge something called a special assessment to the unit owners. Now, this charge is on top of the regular maintenance fees that a unit owner would actually pay to the condo corp. So there are various reasons why a condo corporation may, you know, adopt a special assessment for the condo.
One of them being that they had unexpected expenses.
So to cover those expenses, if the reserve fund is depleted or insufficient then a special assessment usually occurs to cover those expenses. Same thing goes for, if the condo corp underestimated or under-budgeted for any repairs or renos into the condo. So then again, the special assessment is usually implemented.
And then lastly, a very common reason why a special assessment would be conducted is because the condo corp recently had a judgment against them or they are a party to a lawsuit, or something like that.
So to cover those expenses, again the legal fees and what not, a special assessment is usually conducted.
Karen: I see. You know, when I work with buyers who are looking to purchase a condo, they usually avoid condominiums that are undergoing a special assessment.
For instance, the building might have a known structural issue that is in the process of being remedied. A building for example, might be in the process of replacing glass panelling on the balconies if there's been evidence that you know, any glass is not 100% secure, which could lead to the risk of glass falling off of the balcony.
So in cases where there is a structural issue that a condo building is currently fixing or planning to fix, I guess it would lead to a special assessment. Jazz, what's your advice to clients who are looking to purchase a condo in a building that has a special assessment?
Jazz: so this is where you would want to do a review of the status certificate. So prospective buyers have that right to order a status certificate and it will show what the special assessment is, if there is going to be one or not, and perhaps they will mention the cost associated with that special assessment.
So for prospective buyers, that's very important to review that document.
So if there is a special assessment, then what you could potentially do is that you may ask for a lower price for the condo unit knowing that there's a special assessment on it. So you can use it as a negotiating tactic in purchasing that condo. That would be one of the best ways of going about it. But at the end of the day, it's at your own risk when purchasing a condo, if you want to take on that special assessment, knowing that it's there. So that would be the one thing to do. Try to negotiate the price to a lower price. Start with that.
Karen: And you know, for everyone who's listening, I think the takeaway point here is the importance of working alongside an experienced and well trusted real estate team who can advise you accordingly when purchasing a condo.
So with our team, you have Jazz as our experienced lawyer who will review the condo status certificate documents very closely and will provide his honest legal input. And my team on the real estate side, will provide you with all the information you need to make the best well-informed decision for yourself. If you guys are looking to purchase a property in Toronto or even sell a property, feel free to give either of us a call. Thank you so much for sharing your advice and input Jazz.
Jazz: thank you very much for having me again Karen. I look forward to our next video.
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