Anyone that has ever lived in, worked in, or managed a condominium building knows that unexpected expenses are going to arise during the life of the condominium. This means that the condominium association will have to take steps to fulfill its obligations under its governing documents to make repairs, defray abnormal costs, and/or refund its capital reserves. Presuming the operating budget will not cover these expenses, the association will likely need to impose a special assessment.
For most condominiums, a “special assessment” is completely different from the association’s regular assessment. This is because it is usually imposed against all owners in addition to the regular assessment (i.e. annual, quarterly, monthly, etc.). Furthermore, this is above and beyond what owners already pay to the association, so most condominium instruments require membership approval if the special assessment is over a certain amount per fiscal year.
For condominiums with declarations recorded after July 1, 2015, the current Georgia Condominium Act (the “Act”) requires that any special assessment greater than one-sixth (1/6) of the annual common expense assessment (i.e. regular assessment) be approved by the majority of the unit owners. Prior to this change, the Act used to limit special assessments to $200.00 per fiscal year without a membership vote. In other words, if a condominium board wanted to specially assess owners more than $200.00 in a fiscal year, it would need to obtain at least a majority vote of the owners to actually impose it. The Georgia Legislature revised the $200.00 cap to “one-sixth (1/6) of the annual common expense assessment” so that the association’s unilateral right to impose a special assessment (i.e. without a membership vote) will continue to rise as regular assessments increase over time.
Please note that the revised language of the Act will only apply to condominium declarations recorded after July 1, 2015, as well as those that explicitly incorporate the special assessment limitations of the Act. All other condominiums—those whose governing documents provide for a lower cap than the Act and/or were recorded prior to July 1, 2015—may be bound by the$200.00 cap or lower amount that is expressed in that association’s declaration.
If an older condominium wants to take advantage of this update to the law, it will need to amend its governing documents to incorporate the new provisions of the Act. This process, like imposing a special assessment, can also be complicated and challenged if not done properly. This is why we always recommend to contact your association attorney before imposing a special assessment. Either way, careful financial planning by the condominium association can hopefully make special assessments a rare occurrence.