Undisclosed Condo Special Assessments

Sellers often believe that a special assessment that has not been “formally” passed by the Condominium Board does not have to be disclosed.  We are not of the same opinion.  As you may be aware, Section 3(c) of the FRBAR Condominium Rider speaks to levied and pending special assessments.  “Pending” is defined as an item on the agenda or reported in the minutes of the Association.  Many times special assessments, especially for big ticket items (windows, roof, painting, seawall, etc.), are discussed (i.e., reported) at multiple board meetings even though no formal approval is received.  We have found that Sellers are hesitant to disclose these discussions and possible implications to prospective buyers because no formal approval was obtained.  Pursuant to the FRBAR Condominium Rider Sellers who fail to disclose a levied or pending special assessment are required to pay such assessment in full at closing.

Furthermore, most Sellers provide a Seller’s Disclosure Statement to prospective Buyers that requires the disclosure of existing, pending, or proposed special assessments.  The failure to disclose a pending or proposed special assessment upfront (or even during the closing process) may trigger a default by the Seller allowing the Buyer an “out” under the contract and possibly the right to recover damages.  Keep in mind that if the listing agent has knowledge of the pending or proposed special assessment and fails to disclose such knowledge, that agent could potentially have liability, or worse yet incur a grievance action.

As always, should you have any questions regarding the foregoing, we urge you to please consult with your real estate attorney.


Berlin-Patten, PLLC

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

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