February 2022
Special assessments arise when owners fail to adequately fund their reserve fund. When repairs are necessary for major systems such as a roof or parking area in the near future, the assessment can be necessary to obtain needed funds in a timely manner.
There are times when unit owners may have insurance to cover their share of a special assessment.
Title insurance, if purchased when buying a condo, may provide coverage for a special assessment not disclosed in the Status Certificate. This occurs when the corporation is aware that a special assessment might be assessed, or of circumstances that could result in a special assessment, and fail to disclose this information in the Status Certificate.
Special assessment insurance is available to condo owners. Its purpose is to cover an owner’s share of a special assessment to cover the uninsured portion of a covered loss. These are atypical situations unrelated to regular maintenance. The corporation may have purchased insurance to the maximum available coverage which is inadequate for necessary repairs. Owners unaware of the risk or having chosen not to purchase special assessment insurance are obligated to pay their share of any special assessment.
