Navigating HOA Special Assessments

What Title Companies Need to Know

🧭 Why Special Assessments Matter in Real Estate Transactions

Special assessments are one-time fees levied by HOAs to cover unexpected expenses—think roof replacements, litigation costs, or emergency repairs. These assessments can significantly impact a buyer’s financial obligations and even stall closings if not properly disclosed.

For title companies, identifying and managing special assessments is critical to ensuring clean title and protecting buyers from surprise costs.

🔍 How to Detect Special Assessments Early

Title companies can use COCRS’s HOA Document Services to obtain:

• Review meeting minutes and budgets for upcoming or approved assessments.
• Identify recent amendments to CC&Rs that authorize new fees.
• Contact HOA boards or managers for confirmation of pending charges.

📑 What to Include in the Title Commitment

When a special assessment is discovered or suspected:

• Disclose it clearly in the title commitment.
• Escrow funds if the assessment is unpaid or disputed.
• Request a status letter that explicitly confirms assessment amounts and due dates.

⚖️ Legal and Risk Considerations

Colorado law requires sellers to disclose known HOA obligations, including special assessments. Title companies should:

• Verify whether the assessment is recorded as a lien.
• Confirm whether the buyer or seller is responsible for payment post-closing.
• Consult legal counsel if the assessment’s enforceability is unclear.

🛠️ How COCRS Can Help

COCRS’s tools streamline the process by:

• Obtaining HOA documents.
• Offering contact reports to reach HOA representatives.

✅ Final Thoughts: Don’t Let Special Assessments Derail Closings

Special assessments can be a hidden liability. By proactively identifying them and using COCRS’s services, title companies can ensure smoother closings and better protection for all parties involved.