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I would like to know from agents and others on here how special assessments are handled between buyers and sellers of condos at closing. Are the amounts pro-rated, as the HOA dues and property taxes would be? Or is the seller responsible for any special assessments until they relinquish possession of the condo?
The reason I ask is that we just signed a contract to purchase a condo and sent our deposit (earnest money) check. Instead of signing the contract, as expected, the sellers are now demanding that we pay a $1,000 special assessment that the HOA charged them and other homeowners for cleanup due to Hurricane Sandy. As a sign of good faith, we floated the idea of splitting the cost and were told that the sellers were "annoyed." Just to be clear, we do not yet own this condo and would not take possession before late May or early June.
We believe it is truly odd that this issue is suddenly coming up the day after we signed the contract. We have asked our agent to get us a copy of the dated special assessment notice and we have also asked the property manager to contact us and provide us with an explanation.
Can you not find a property that doesn't have any issues? It seems everything you post is about a problem you're having with buying and/or selling. There aren't usually that many "issues" so how do you keep finding them all?
And to answer the question, the sellers owned the property during the hurricane, thus they should be responsible for the amount.
Can you not find a property that doesn't have any issues? It seems everything you post is about a problem you're having with buying and/or selling. There aren't usually that many "issues" so how do you keep finding them all?
Yes, we too are amazed at the number of issues that have cropped up on our transactions since we first had a serious buyer making an offer on our home last fall. We have never had any prior transactions like these. It has been a real ordeal and we have created none of the issues. In fact, we have tried to act in good faith all along the way, being patient when our buyers took way longer than expected to get their mortgage and being forgiving in not asking the sellers to correct more defects cited by the inspector. As I mentioned, our latest attempt to resolve the assessment by splitting the cost -- a generous gesture based on your response -- was met with annoyance from the sellers.
Part of the reason for the problems is that we live in New York, where people are probably more difficult and distrustful than in other parts of the country. Beyond that, I guess we've just been unlucky with our buyers and sellers.
Renting is starting to look pretty good right now.
I'm not in NY state, but I have only seen this handled one of three ways.
Either the special assessment is tacked onto and becomes part to the monthly HOA fee and simply becomes the buyer's responsibility when he takes possession or sometimes the fee can be paid off before hand- always by the seller. The third way is for a smaller, one time special assessment to be paid in a few installments separate from the HOA fee.
I've never, ever heard of a seller asking a buyer to pay off any part of a special assessment.
You have some weird stuff going on in Long Island. Sellers sure have chutzpah there.
Forget about the special assessment. The sellers just said they changed their minds and they now want $1000 more. Pay the thousand or walk. Or counter.
They need to deliver to you a clean title, that is, a house with no pending bills. You are negotiating how much you will pay for that.
You have some weird stuff going on in Long Island. Sellers sure have chutzpah there.
Yup, and these are the same folks who are still awaiting municipal approval of their illegal finished basement and bath. We took care of that issue in the contract and they told us -- through the agents and attorneys -- that they were extremely anxious to sign. Now, not so much.
Go over to the Long Island forum and read what a lot of us residents think about living here and what our neighbors are like. If some of us weren't tied to Long Island by employment, we'd be out of here in a flash. It's a tough environment in which to be honest and upstanding. As with the aforementioned sellers, any act of goodwill is not treated with gratitude, but is looked upon as a sign of weakness that the other side exploits as an opportunity to extract even more.
Forget about the special assessment. The sellers just said they changed their minds and they now want $1000 more. Pay the thousand or walk. Or counter.
They need to deliver to you a clean title, that is, a house with no pending bills. You are negotiating how much you will pay for that.
Getting ready to lace up my walking shoes now. Time to call their bluff.
The reason I ask is that we just signed a contract to purchase a condo and sent our deposit (earnest money) check. Instead of signing the contract, as expected, the sellers are now demanding that we pay a $1,000 special assessment that the HOA charged them and other homeowners for cleanup due to Hurricane Sandy. As a sign of good faith, we floated the idea of splitting the cost and were told that the sellers were "annoyed." Just to be clear, we do not yet own this condo and would not take possession before late May or early June.
Can the sellers rightfully keep the earnest money (and sell to another buyer) if the OP refuses to pay the $1,000 extra?
Can the sellers rightfully keep the earnest money (and sell to another buyer) if the OP refuses to pay the $1,000 extra?
Of course not. The Sellers haven't signed the contract which was the purpose of the deposit.
To the OP: most often, special assessments are paid off by the Seller at closing, although they can be negotiable, primarily depending on the circumstances. Since the $1,000 special assessment was for the hurricane cleanup, I assume that has already taken place so the Sellers received the full benefit of the special assessment--so it seems rather foolish of them to ask that you pay for any portion of it.
And to answer the question, the sellers owned the property during the hurricane, thus they should be responsible for the amount.
Not exactly true. Sellers are responsible for special assessments that are due before closing unless negotiated otherwise with the buyer. Sometimes an HOA will divide a special assessment into several payments due over several months. Unless the buyer got the seller to agree on the contract to pay those that are due after closing they are the buyer's responsibilty.
I'm closing one tomorrow that had exactly this situation. Two more payments are due after closing but we got the sellers to pay them off before closing. We negotiated these terms in the beginning.
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