When looking at real estate listing descriptions for NYC, you’re likely to wonder, “What’s a co-op or condo assessment? Should I be worried about it?”
Read on to find out more!
A co-op or condo assessment is an extra monthly charge on top of a shareholder or unit owner’s monthly maintenance or common charges. Buildings use them to cover the cost of major building repairs, unexpected large expenses or to shore up the building’s reserve fund.
Assessments aren’t intended to be permanent increases and have an end date. Sometimes they can last for just a few months. But often, they can last for a year or more, depending upon the expense that needs to be covered.
Why would a building prefer to use an assessment? It helps them avoid having to either raise the maintenance or to dip into their building reserve fund. Neither of which owners are fond of doing! But it basically boils down to what they feel makes the most financial sense for them.
As mentioned previously, assessments are often used to pay for major building repairs. So if an assessment was employed to update the building lobby or ventilation system or install a new roof, those are all great things for the value of your property going forward.
However, using assessments too often could be a sign that the building has financial issues. Especially if their building reserve fund is low (which could lead to financing issues). Your attorney will give you a better sense of this when they conduct their due diligence review process.
Got more questions about buying in NYC? Then check out my First Time Buyer Resources page! It has my top posts on buying in NYC and more!
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