HOA Special Assessment- What is it?

August 14, 2023

person Checking HOA special Assesment Homeowners Associations (HOAs) are known for imposing various types of fees to maintain and enhance community living. Among these charges, the concept of “HOA special assessments” may arise, often leaving homeowners puzzled. What are special assessments, and why are they necessary? Heywood Community Management, located in Gilbert, Arizona, is here to break down HOA special assessment rules, the process, and everything you need to know about this important subject.

What is an HOA Special Assessment?

An HOA special assessment is a fee charged to homeowners in addition to regular HOA dues. Unlike monthly or annual dues, this special assessment fee is usually levied for specific projects or unforeseen expenses that exceed the HOA’s budget. Understanding what is an HOA special assessment is vital for homeowners, as it directly impacts their financial obligations to the community.

Reasons Why HOAs Impose Special Assessments?

HOAs impose special assessments for various reasons, such as:
  • Emergency repairs or renovations.
  • Major community improvements.
  • Legal obligations or liabilities.
  • Depleted reserve funds for planned projects.

How are Special Assessments Calculated?

Calculating HOA special assessments requires considering multiple factors:
  • Total Cost: The total cost of the project or need.
  • HOA’s Reserve Funds: The existing funds available in the HOA’s reserves.
  • Number of Homeowners: The special assessment fee is usually divided equally among homeowners or based on property value.
  • HOA Special Assessment Limit: Many states and HOAs have limits on how much can be levied, ensuring that the fee is reasonable.

Can Special Assessments be Claimed on Taxes?

Special assessments may or may not be deductible, depending on their purpose. It is essential to consult with a tax professional to understand the specifics of your situation.

How the HOA Notifies Homeowners about Special Assessments is Critical!

An HOA special assessment notice is typically required to inform homeowners. This notice of special assessment often includes:
  • A detailed explanation of why the special assessment is necessary.
  • A breakdown of how the special assessment was calculated.
  • Information on how special assessments are paid, including payment options and deadlines.

How Often Should You Charge a Special Assessment?

Special assessments should be a rare occurrence and only imposed when necessary. Continuous reliance on HOA special assessments can signal poor budgeting and management. However, there are times where some associations do a special assessment annually for insurance costs. That way, the association can pay for insurance with the exact amount which is necessary.

Are HOA Special Assessments Legal?

Yes, HOA special assessments are legal and are usually outlined in the HOA’s governing documents. However, there may be limits and rules that must be followed, such as providing proper HOA special assessment notice and adhering to state laws.

How to Avoid HOA Special Assessments?

While not always entirely avoidable, the following steps can minimize the likelihood:
  • Maintain a well-funded reserve.
  • Plan and budget accurately for future expenses.
  • Regularly review and adjust the budget.
  • Ensure transparency and clear communication with homeowners.


HOA special assessments are an essential but complex aspect of community living. Whether you are concerned about who pays special assessments at closing or seeking to understand the intricacies of this practice, Heywood Community Management is here to assist you. Understanding and properly managing special assessments is crucial for a harmonious community. If you need further clarification or assistance regarding HOA management in the Phoenix metro market, don’t hesitate to contact Heywood Community Management, your trusted expert in all matters related to HOAs.

Heywood Community Management specializes in homeowners' association (HOA) management in Arizona and surrounding areas such as Gilbert, Chandler, Tempe, Mesa, Queen Creek, Scottsdale, Phoenix, and more. Heywood HOA Management has actively been a part of Arizona's Real Estate market since 1933. With a single focus on community association management, Heywood Community Management is dedicating its resources to raising the community management standard of quality.

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