Have you heard about a “special assessment” only after falling in love with a condo? You are not alone. In Downtown Fort Lauderdale, assessments can change your budget and your loan options if you do not plan for them. In this guide, you will learn what assessments are, how they differ from dues and reserves, how to compare buildings, and how assessments can affect your mortgage. Let’s dive in.
What assessments are
An assessment is a charge your condo association can levy on owners in addition to the regular monthly dues. It usually funds a specific repair or shortfall when the budget and reserves are not enough.
- Monthly dues: Recurring payments for day-to-day operations like common-area utilities, management, cleaning, insurance for common elements, and routine repairs.
- Reserves: A capital fund set aside for big-ticket replacements over time, such as elevators, roofs, façade and balcony repairs, parking garages, seawalls, and major mechanical systems.
- Special assessments: One-time or time-limited charges to cover a project or unexpected expense when reserves fall short. You may pay in a lump sum or installments.
Under Florida’s Condominium Act, associations can levy assessments, record liens for unpaid amounts, and pursue collection if needed. Many associations rely on budgets, reserve studies, and inspection reports to decide if an assessment is necessary.
Why they matter in Downtown Fort Lauderdale
Coastal and building age
South Fort Lauderdale and Downtown Fort Lauderdale include many high-rises built from the 1960s through the 2000s. Older buildings and coastal conditions bring added wear from salt, wind, and storms. That can mean more frequent capital needs like façade restoration, balcony concrete repairs, elevator modernization, and waterproofing.
Insurance costs and deductibles
Broward County condos face higher property and windstorm premiums than many inland areas. Master policies often have large hurricane deductibles. If a named storm causes damage, associations may levy a special assessment to cover the deductible and related repairs.
Post-Surfside inspections
After the Surfside tragedy, Florida increased inspection, disclosure, and oversight for aging and coastal buildings. You should confirm whether a building has completed required inspections or recertifications and how any recommended repairs are funded.
How to compare buildings
Documents to request
Start with these items when you begin comparing options:
- Most recent annual budget
- Audited or reviewed financial statements and current reserve balance
- Latest reserve study or engineer’s report with a funding plan
- Board meeting minutes for the last 12 to 24 months
- Notices of any pending or recently approved assessments with payment schedules
- Declaration, bylaws, and any amendments covering assessments and voting
- Certificate of insurance with details on deductibles and exclusions
- Litigation disclosures and status reports
- Required building inspection or recertification reports
- Owner delinquency report
Key metrics to review
- Reserve strength: Look for a recent reserve study and compare the recommended contributions to what the association actually funds. A declining balance can be a warning sign.
- Assessment history: Check how many assessments occurred in the last 5 to 10 years and the typical per-unit amounts.
- Operating dues vs. peers: Dues that are far lower than similar nearby buildings can signal deferred maintenance.
- Delinquency rate: A higher share of owners behind on dues raises the risk of future increases or assessments.
- Pending projects: If the building plans major work, confirm the funding source and timeline.
Red flags to watch
- No recent reserve study or a study that recommends much higher contributions than the association is making
- Engineering or inspection reports that identify major work with no funding plan
- Frequent or large special assessments that suggest chronic underfunding
- High owner delinquency or several units in foreclosure
- Significant litigation against the association
- A master insurance policy with a very large windstorm deductible and no contingency plan
Calculate true monthly cost
To see what a condo will really cost each month, include both dues and the monthly impact of any assessments.
- Start with monthly HOA dues.
- Add any recurring assessment installment you will assume at closing.
- If an assessment is a lump sum, convert it to a monthly number by dividing the amount you will pay by the number of months you expect to own or by the association’s payment schedule.
- The total is your estimated monthly housing cost for budgeting and lender review.
This method helps you compare buildings on an apples-to-apples basis and avoid surprises.
Mortgage and approval impacts
Project-level approval matters
Lenders review the entire condo project, not just your unit. Weak reserves, large pending assessments, significant litigation, or low owner-occupancy can limit eligibility for certain loan programs. Some buildings may require extra documentation or may not qualify for FHA or VA financing.
How lenders treat assessments
Your lender will count monthly HOA dues and any recurring assessment payments in your debt-to-income ratio. Large one-time assessments are usually handled in one of three ways: paid by the seller, paid by the buyer before or at closing, or counted as an ongoing monthly payment if there is an installment plan.
FHA, VA, and agency guidelines
Programs like FHA and VA and agency investors such as Fannie Mae and Freddie Mac have specific condo project rules. Reserve funding, litigation status, and occupancy mix all play a role. If a project does not meet guidelines, you may need a different loan type or additional approvals.
Practical steps with your lender
- Ask the seller or listing agent to confirm in writing who will pay any pending assessment.
- Provide your lender with the association budget, reserve study, and assessment details early.
- Verify condo project eligibility upfront if you plan to use FHA or VA financing.
- If a large assessment is planned but not levied, ask your lender how they will treat it and whether escrow is required.
Smart negotiation tips
- Include a condo document review contingency so you can cancel if the financials or reports are not satisfactory.
- Negotiate for the seller to pay any approved assessments in full before closing or escrow funds to cover them.
- If minutes or inspections point to structural or envelope issues, consider an engineering review or require repairs to be funded before closing.
- Where timing is uncertain, discuss pro rata arrangements so you are not paying for periods before your ownership.
Buyer checklist
Quick pre-offer checks
- Building age and whether recent inspection or recertification reports exist
- Current monthly dues and what is included
- Reserve balance and presence of a recent reserve study
- Any pending or anticipated assessments and typical per-unit amounts
- Whether the project is eligible for your intended loan type
After-contract due diligence
- Last 2 to 3 years of audited or reviewed financial statements
- Current budget and latest reserve study with funding schedule
- Board minutes for the last 12 to 24 months
- List of pending projects, bids, and contractor estimates
- Certificate of insurance and master policy deductibles
- Litigation disclosures and status
- Owner delinquency report and manager or board contact for follow-up
Questions to ask
- Has the building had a recent structural or engineering inspection, and were any repairs completed?
- What projects are planned in the next 3 to 5 years, and how will they be funded?
- Is the reserve funded according to the last study? If not, why?
- What special assessments occurred in the last 5 years and what were the reasons and amounts?
- What is the current owner delinquency rate?
- Are there any known insurance issues that could lead to assessments?
Local guidance you can use
Assessments do not have to be a deal breaker. Clear financials, a current reserve study, and a realistic funding plan can be positive signs. In South Fort Lauderdale, buildings that stay ahead of maintenance and budget for coastal realities tend to offer more predictable costs.
If you want help reviewing budgets, minutes, insurance terms, and reserve studies before you commit, you can lean on a local advisor who understands both the numbers and the lifestyle. With a background in accounting and association management, and deep knowledge of Broward County condos, I guide you through the documents, coordinate with your lender, and help you negotiate the right protections.
Ready to compare buildings with confidence in Downtown Fort Lauderdale? Connect with Hasnaa Boutros PA for a clear, step-by-step plan from first tour to closing.
FAQs
What is a special assessment in a Fort Lauderdale condo?
- A special assessment is a one-time or time-limited charge that a condo association levies to fund a specific need when regular dues and reserves are not enough.
How do reserves differ from monthly HOA dues?
- Dues pay for routine operations each month, while reserves are a capital fund for big repairs and replacements like roofs, elevators, and façade work.
How can a condo assessment affect my mortgage approval?
- Lenders count monthly dues and any recurring assessment payments in your debt-to-income ratio, and large one-time assessments may need to be paid before or at closing.
Are older Broward County buildings more likely to have assessments?
- Older coastal high-rises often face larger capital needs due to age and salt exposure, which can increase the likelihood of assessments if reserves are insufficient.
Can I negotiate who pays a pending assessment at closing?
- Yes, you can request the seller pay approved assessments in full or escrow funds to cover them, and include contract language to protect you during document review.
