HOA Special Assessments: How Title Companies Can Spot Future Financial Risk Before Closing

Special assessments can be a financial shock for new homeowners—often surfacing months after closing. These one-time charges are levied by HOAs to cover unexpected expenses like major repairs, legal settlements, or insurance shortfalls. For title companies, identifying the potential for upcoming assessments is key to protecting buyers and ensuring a smooth transaction. COCRS makes this process easier by providing access to the right documents and insights.

What Are Special Assessments?
Unlike regular dues, special assessments are:

• Unpredictable and often tied to emergencies or capital projects
• Approved by HOA boards or member votes
• Charged in addition to monthly dues, sometimes in large amounts

They can range from a few hundred to several thousand dollars per unit.

Why Title Companies Should Care

• Buyers may be unaware of pending assessments
• Unpaid assessments can delay closings or create escrow complications
• Future assessments can affect property value and buyer satisfaction
• Disclosure laws may require title companies to flag known financial risks

How to Spot Potential Assessments
Title professionals can use COCRS to obtain documents so they can:

• Review HOA budgets and reserve studies for underfunded reserves
• Check meeting minutes for discussions of upcoming projects
• Look for recent insurance claims or litigation
• Identify aging infrastructure or deferred maintenance

Best Practices for Title Companies

• Request financial documents early in the closing process
• Include assessment risk summaries in title commitments
• Educate buyers and agents on what to look for in HOA financials
• Escrow funds if a pending assessment is confirmed but unresolved

How COCRS Helps
COCRS streamlines this process by:

• Retrieving budgets, reserve studies, and meeting minutes
• Providing status letters that confirm current and pending charges
• Offering contact reports to reach HOA managers for clarification

Conclusion
Special assessments can derail buyer expectations and complicate closings. Title companies that proactively identify and disclose these risks build trust and reduce liability. With COCRS, accessing the right documents and insights is fast, reliable, and built for Colorado’s unique HOA landscape.