Special Assessments: Unexpected Charges Explained
A special assessment is a levy charged to vacation ownership members in addition to the standard annual maintenance fee. It is typically used to fund costs that were not anticipated in the regular fee budget — major repairs, refurbishment, or extraordinary events like natural disaster damage.
When special assessments occur
Special assessments are levied when the resort's reserve fund is insufficient to cover an unexpected or major capital expense. Common triggers include: major infrastructure repairs, refurbishment of common areas, damage from a natural disaster or unforeseen event, or changes in local regulations requiring significant capital investment.
How much they can be
There is typically no cap on special assessments in vacation ownership agreements. The amount is determined by the total cost of the required work divided across all owners. Large refurbishment programmes or significant infrastructure repairs can result in assessments of several thousand dollars per owner.
Your obligations
Special assessments are contractually binding in most club agreements. Non-payment typically triggers late fees, restrictions on booking, and in serious cases, legal action or forfeiture of ownership. If you believe a special assessment is unreasonable or improperly levied, review your membership agreement and seek legal advice before refusing payment.
What to ask about reserve funds
Before purchasing, ask the club to disclose the current reserve fund balance and whether any special assessments have been levied in the past five years. A well-managed resort should have an adequately funded reserve. Low reserves are a warning sign for future special assessments.