What Can I Do If I Can’t Pay HOA Assessments?

Here in Chicago and around Illinois, assessments are part and parcel of condo ownership.

For many condo, home, and townhome owners, every month brings a fee levied by the homeowners’ association (HOA).

About HOA Fees and Assessments

These routine fees are generally determined by the HOA board of directors, and are intended to be used to pay for the maintenance and upkeep the collectively-owned areas of the property, as well as cover things like insurance, HOA employee salaries, or contractors’ fees. So, depending on the size and make-up of your property or development, these assessments could be put toward everything from garbage collection, to utility bills, to landscaping, to the maintenance fees paid on community pools, exercise rooms, or so on.

Broadly speaking, assessments are set on a fixed schedule, and are determined by the HOA board of directors after a thorough evaluation of the community’s budget and expenses. Though a prospective buyer will be made aware of HOA assessments when they first purchase a property, these assessments can (and, more often than not, do) tend to rise over time.

In addition, many owners often find themselves faced with special assessments, which are charged to help with a specialized or emergency project for the community. This might include paying for repairs after a disastrous storm or special event, for instance. In other cases, special assessments can be levied for other projects above and beyond what the HOA board budgets, and might include anything from remodeling a lobby area, to repainting an exterior wall, to carrying out necessary repairs on a building’s foundation, plumbing or roof.

Though regular and special assessments are a common aspect of ownership in planned developments and condominiums, they can still be burdensome to owners. For instance, owners won’t be charged less in assessments, even if they don’t use the common areas being maintained. Ownership comes with a certain obligation in this regard.

“What If I Can’t Afford My Assessments?”

But what if these assessments start to mount up, and become more than property owners can manage? Special assessments, for instance, can easily cost thousands of dollars at a time. And for many owners, managing special assessments, routine HOA fees, and mortgage payments all at once can prove to be a difficult balance, financially.

If you cannot or do not pay assessments, what may happen? Much of the answer to that question will come down to the governing documents for your condo association or development. Generally, HOA documents will allow for various enforcement measures. In different cases, failure to keep up with assessments could potentially result in a property owner:

  • Facing late fees and fines on unpaid assessment amounts
  • Being prohibited from using common areas or amenities until fees are paid
  • Facing delinquent penalties, liens, or even foreclosure for non-payment

So, if owning a property comes with an obligation to pay assessments, what can owners do when they face the risk of falling behind? What if the monthly fees or special assessments are significant enough to prove burdensome – is there recourse out there?

Broadly speaking, in many situations, homeowners may have some options available. For instance, certain HOA directors and boards may be willing to sit down with property owners, and discuss payment plans or financing options. In other cases, homeowners may be able to challenge certain HOA fees and special assessments in court, perhaps if the HOA is acting outside of proper procedure or assessing an unreasonable sum.

Who’s In Your Corner?

Facing down your HOA board can be difficult to accomplish all alone. In many cases, homeowners may benefit from bringing on an experienced real estate attorney as they look into their options. An attorney can assist with negotiations, document review, litigation, and more.

A real estate attorney can assist homeowners in many different ways. For instance, as a prospective buyer considers a unit, a real estate attorney may be a key partner, one who can help the buyer to determine if the HOA is financially sound, and if their current fees and assessments are fair and reasonable. At this point, for instance, a lawyer may be able to inform a client if there is questionable language in the HOA bylaws that or documents, or if there are any signs that assessments may rise in the short term.

And, down the line, an attorney may be able to help homeowners review and understand their documentation, and help to assess if pursuing litigation is the best course of action in the face of mounting assessments. In other cases, an attorney may be able to help their clients get a better handle on their unique financial situation and provide guidance through the foreclosure or bankruptcy processes, if it comes to that.

Having a Good Real Estate Attorney Makes a Difference

The Gunderson Law Firm possesses unique expertise and insight, reinforced by years of experience and long-term connections throughout Chicago’s real estate, finance, and insurance industries. Our team’s full range of real estate legal services includes:

  • Residential Real Estate
  • Commercial Real Estate
  • Purchases and Sales
  • Mortgage Conveyancing & Advice
  • Real Estate Litigation
  • Property Development
  • Condominium Law
  • Foreclosures

Have any questions? Want to talk about your situation? Don’t hesitate to drop us a line or give us a call to set up your free initial consultation.

2018-11-28T11:04:47+00:00 October 18th, 2018|Community|