Q&A: Who Pays the Assessment?

Q There is a question in my building as to whether or not a new homeowner is responsible for paying an assessment that was extended by the HOA board before the transaction was completed. The previous homeowner paid the two-year assessment at the closing. After which, the board extended the assessment to the new homeowner.

The new homeowner does not want to make the extended assessment payments (7 months) because the original assessment was made prior to her moving in. Is the new homeowner responsible for the extended seven-month assessment fee when they were not liable for the original assessment?

—Newly Assessed Homeowner

A “The new homeowner is responsible for the extended assessment. Generally, when an assessment is levied by a condominium, cooperative or HOA, the homeowner or unit owner at the time of such assessment is responsible for paying it,” according to Andrew B. Freedland, Esq. of the law firm Rosen & Livingston in Manhattan.

“However, when a unit owner sells his or her apartment, generally their attorney will rely on a form contract and a rider. The rider is tailored to each deal and may amend the terms in the form contract. That contract will determine how an ongoing assessment is apportioned between the seller and purchaser of the unit. Most residential contracts of sale state that if an assessment is paid in installments; the installments that are due after the date of closing will be paid by the purchaser. Only those installments which were due and payable prior to the closing are paid by the seller at or prior to the closing. Since the installments in the letter writer’s question are due following the closing, it is axiomatic that the new owner of the unit is responsible because his contract most likely did not anticipate an additional assessment.

“In this particular situation, the extended assessment was not in place at the time of closing. Even if the contract of sale had stated that the seller was responsible for the entire assessment, the purchaser/new unit owner would be responsible for this extended assessment as it was unknown to the parties at the time of the closing. An HOA, condominium or cooperative voting to extend an assessment is in no way different from passing a new assessment. Furthermore, the HOA has no standing to collect the assessment from the prior unit owner.

“If the new unit owner continues to refuse to pay the additional assessment, the cooperative, condominium or HOA may take legal action against the unit owner, including filing a lien against the unit and commencing a foreclosure action (HOA or condominium) or commencing a lawsuit (cooperative).”

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  • does an assessment in a cooperative have to be based on the amount of shares issued or can it be an across the board assessment of one blanket amount. for example, an assessment of 600 per family was levied on our coop and people with less shares of stock feel that the assessment should be porportionate to their shares issued. i need to know the answer as soon as possible. thank you in advance
  • I feel that the assessment based on the shares issued is fair since more shares mean more space, more usage of common facilities (water, trash etc...), more value. At least that's what's being done at our co-op.