When you sell your home, there may be unexpected fees at the closing table, such as special appraisals. Special assessments are additional fees levied by a homeowners association (HOA) or local government for certain projects, such as roof repairs, road repaving, or community improvements. Typically, the seller pays the due or approved appraised value before closing, and the buyer pays the approved appraised value thereafter, although this can sometimes be negotiated in the purchase agreement.
Whether you’re selling a home in Chicago, IL, San Diego, CA, or Orlando, FL, this Redfin guide will explain who typically pays the special assessment at closing, the factors that influence this decision, and how sellers can prepare to their advantage and avoid surprises.
What is special evaluation? Why is special evaluation done?
Special assessments are fees levied by homeowners associations (HOAs), condominium boards, and even local governments to cover large expenses that cannot be covered by regular dues and taxes.
Common reasons include:
Large-scale repairs such as roof replacement and structural work. infrastructure costs such as road resurfacing and sewer rehabilitation; Community improvements such as new amenities, landscaping, and safety improvements.
As communities age, special assessments are becoming more frequent due to increased maintenance, insurance, and material costs. Property owners should factor these potential fees into their long-term financial plans.
Who is generally responsible for paying special assessments?
Whether the seller or the buyer is obligated to pay the special assessment amount depends on the timing and the contents of the sales contract.
Before Closing: If the appraisal is approved and requested before the sale closes, the seller typically pays. Post-Closing: If an appraisal is imposed after the buyer takes ownership, the buyer is generally responsible. Installments vs. lump sum payments: The appraisal can be a one-time payment or can be spread over time. The contract will declare whether the seller will pay the full amount or just his share.
Factors determining liability
Timing plays a big role in determining who pays for a special assessment, but state law, HOA rules, and contract negotiations can also factor into buyer or seller liability.
for example:
State or local law: Some states require sellers to settle all appraisals before the transfer. For example, HOAs in Florida often file liens that must be cleared before closing. HOA/Condominium Bylaws: Association documents may define how appraisals are handled during the sale. Negotiation Terms: Buyers can require sellers to cover some or all of the appraisal. Sellers can respond with credits or price adjustments. Title/Escrow Review: These services typically flag any unpaid or pending appraisals before closing.
Convert special appraisals to the seller’s advantage
Taking advantage of special reviews can really help you stand out to buyers. Addressing them early builds trust, makes your home more appealing, and turns potential obstacles into bargaining chips.
How to manage and utilize it
Full payment before closing: Eliminate uncertainty and demonstrate transparency. Provide credit: Give buyers control over costs in their own way. Negotiate the split: Demonstrate flexibility by sharing costs based on timing and fairness. Use an escrow holdback: Setting aside funds in case the final amount is not confirmed shows good faith and responsibility.
Examples of seller strategies
Condominium roof replacement: Seller pays half of the $15,000 HOA assessment and takes a credit for the remainder. Road Projects: No tolls were invoiced before the contract, so the buyer assumes they will be charged after the contract. HOA Pool Renovations: Mid-Transaction Vote – Contract terms determine who pays. Deferred maintenance: Seller pays upfront costs to continue selling.
Preparations to avoid unexpected situations as a seller
To prevent unexpected costs and last-minute complications, sellers should focus on early preparation and clear communication. Use this final pre-closing checklist to ensure all obligations are met and ensure an easy and confident closing process.
Seller checklist:
Review documents: Prepare to research HOA meeting minutes, budgets, and any signs of upcoming projects or evaluations. Check with your HOA: Ask about any pending or proposed special assessments so you can address them before listing. Disclose early: Be upfront about known and potential fees. Buyers value honesty and it builds trust. Clarify contract language: Work with your Redfin agent to outline who pays what in the event of a special assessment. Plan your budget: Set aside funds or negotiate possible assessment credits, especially if your HOA has limited reserves.
FAQ: Who pays the special assessment at closing?
1. Can I refuse to pay a special assessment?
If you are a seller, paying any special assessments is usually your responsibility. We cannot refuse your order if it has already been approved and billed before closing. Attempting to shift responsibility to the buyer can delay or cancel the transaction.
2. What happens if the buyer ignores the appraisal and walks away?
Non-disclosure or lack of negotiation may lead to cancellation of the transaction. Transparency and flexibility generally help maintain consensus.
3. If I move before the deadline, do I have to pay future installments?
Unless the contract specifies that the seller must pay the entire balance, the buyer is usually responsible for paying any installments after closing.
4. What if my evaluation has been approved but not yet billed?
Responsibilities vary by contract. If both parties know that, they can negotiate who will pay before closing.
5. Can the buyer back out if I don’t disclose the pending appraisal?
yes. Failure to disclose known ratings is considered a material omission and may result in cancellation or legal action.
