When handling real estate transactions in Colorado, title companies often face unexpected challenges related to homeowners’ associations (HOAs). One of the most overlooked—and potentially costly—issues is special assessments. These charges can derail closings if not identified and managed early. Here’s what you need to know to protect your clients and keep transactions on track.
Special assessments are one-time charges levied by an HOA to cover expenses beyond the regular budget. Common reasons include:
Unlike regular dues, special assessments can be substantial and often come with short payment windows.
Unpaid special assessments can become liens against the property, creating title defects and delaying closings. Even if the seller has paid their regular dues, an outstanding assessment can surprise everyone at the eleventh hour. Title companies must ensure these charges are disclosed and addressed before issuing a commitment.
Proactive research is key:
Colorado law requires sellers to disclose known assessments. Failure to do so can lead to disputes post-closing. Title insurance typically excludes coverage for unpaid assessments unless specifically addressed, so diligence is critical.
COCRS simplifies the process by:
With COCRS, title companies can reduce risk, save time, and ensure smooth closings—even when HOAs throw curveballs.
Special assessments don’t have to be a deal-breaker. By identifying them early and leveraging tools like COCRS, title companies can protect all parties and keep transactions moving forward.