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Sticker shock: Special assessments can send condo costs even higher. What buyers should be asking.

Ask the Expert Buying
Special assessments can be costly, but owners of single-family homes have to shoulder maintenance costs alone. illustrations by ADOBE stock

The Boston condo world in the early aughts simmered — explosively boiled, some might say — with the drama played out in the media regarding special assessments that left owners with six-figure bills for hefty, overdue maintenance projects.

According to the online news site Curbed, Brook House in Brookline underwent a $38 million special assessment in 2006 to replace a heating system, which penciled out to roughly $50,000 per unit, and a 2005 special assessment to replace garage flooring, a brick exterior, and emergency generator at 50-60 Longwood Ave., also in Brookline, averaged $160,000 per condo.

The most infamous case, however, involved Harbor Towers on the Boston waterfront. The development already was coming off an assessment in the 1990s that replaced windows and waterproofed the building, averaging about $15,000 per unit. But that was just a dustup compared with the battle that brewed over a special assessment to repair the building’s broken heating and cooling system and corroded pipes.

That $75 million special assessment was levied in 2007, averaging $120,000 per unit. But owners of the larger condos were hit with bills of more than $400,000. A legal battle between disgruntled owners and the building’s trustees played out in the press, and some owners sold their units before the special assessment moved forward.

“It was so contentious that, on the elevator, you didn’t know who you could talk to and who you couldn’t talk to,’’ said Renée Greene, who lived in an 880-square-foot seventh-floor unit and was hit with a roughly $95,000 special assessment. “It was like living in a movie.’’

Harbor Towers might be the stuff of local legend when it comes to special assessments, but the collapse of the Champlain Towers South condo building in Surfside, Fla., north of Miami earlier this year has pushed the topic of deferred maintenance to the national forefront.

“It was like a turn of a switch. There was the volume and rate before Surfside, and there was the volume and rate after Surfside,’’ Thomas O. Moriarty, a real estate attorney and partner at Moriarty Troyer & Malloy who is president of the Community Associations Institute’s New England chapter, said of the rate of building inspection requests since the Florida tragedy. “If you ask any engineer that does building envelope surveys and structural analysis, they’ll tell you it was the catalyst.’’

The Surfside collapse sparked a wave of emergency inspections of older buildings in Miami-Dade County, even forcing residents out of a second development over structural concerns. The Miami tragedy reveals there’s a national lesson to be learned regarding special assessments — and why prospective buyers need to be wary.

“Everybody kind of started going crazy,’’ said Carlos Martín, project director of the Remodeling Futures Program at Harvard’s Joint Center for Housing Studies. “There’s a state of practice among property managers about how much to keep in reserves, knowing how often different systems in the building may deteriorate. There’s a huge conversation in this country around condo costs and repairs.’’

It’s hard to discern how many condo buildings in Boston are reviewing their safety and maintenance schedules now because this is a practice largely done out of city oversight.

A condo building generally operates where owners are responsible for their individual unit and the condo association is responsible for common areas, depending on how the building’s documents are written. Building management companies can provide ongoing maintenance for both common and private areas within a building.

State and city governments in Massachusetts, like other parts of the country, primarily rely on condo associations to self-regulate, except for fire safety and exterior inspections every few years.

Boston regulations require façade and exterior conditions, as well as fire escapes, of condo buildings to be inspected every five years by private engineers who certify the results to Boston’s Inspectional Services Department. Interior conditions of a rental building are inspected on a five-year basis, but that is not the case with condo buildings. The city, however, will step in anytime they receive a complaint or report of poor conditions.

ISD maintains this “proactive and reactive’’ inspection protocol is enough for the city’s housing stock.

“With Boston being one of the oldest cities [founded in 1630] in North America with temperatures that are constantly fluctuating, it is imperative that we ensure our structures are safe and code-compliant,’’ Sean Lydon, interim commissioner of the Inspectional Services Department, said in a statement to the Globe. “Homes and buildings that are built in compliance with building, zoning and all other applicable codes produce resilient structures, minimizing the risk of death, injury and property damage. Here in the City, we take a very aggressive approach into ensuring that criteria is met in a safe and timely manner in regards to building maintenance with standards that must be met and recorded with the Building Department. In addition to the previously mentioned ordinances, our team of building and fire prevention officials inspect hundreds of buildings and review construction plans daily to ensure where you live, work and play are safe.’’

Special assessments can provide enough sticker shock to existing residents, but prospective buyers may not know that they are being considered or were already levied and that the seller is just trying to skip out on the bill.

Courtney Cramer, a 34-year-old assistant principal in White Plains, N.Y., bought a $405,000 condo with her fiancé late last year. The couple figured it would be an intermediate place to live before they found something roomier, but a special assessment has them financially trapped in that condo for another decade.

Their share of the cost to address a structural issue in the building — something Cramer said was mentioned only as a “potential courtyard and garage renovation’’ when they were negotiating the sale — came out to $105,000. The monthly fees are expected to double over the next 10 years to pay for it.

“I’m trapped for a decade in a property that I had no interest in living in for more than three to four years,’’ Cramer said. “I would never buy a condo or co-op in New York ever again.’’

Special assessments are a sometimes-overlooked reality of multifamily developments. Rather than just the maintenance of one’s own unit, an owner is on the hook for the upkeep of common areas. This can be costly, but the owners of single-family homes and apartment buildings have to deal with maintenance, so why wouldn’t they?

New York’s lack of disclosure laws when it comes to special assessments can be a brutal lesson in “buyer beware’’ for a condo owner like Cramer, who cannot pursue legal action. It’s also a fresh reminder to buyers everywhere to read the fine print and ask as many questions as possible during the home-vetting process.

Massachusetts sellers are not required to disclose an assessment as long as they aren’t involved in “trade or commerce,’’ Moriarty said. A broker or a seller engaged in trade or commerce has to disclose information that would be relevant to a buyer’s decision to close.

This means a seller could withhold this information from their broker and legally move through a sale without ever disclosing an assessment — a harsh lesson about never shying away from asking questions or requesting building documents.

Condo owners are not required to disclose when a pricey assessment has been made or is expected.

“The owner of the unit has no duty,’’ Moriarty said, “so it really does fall upon the buyer.’’

Developers and brokers are supposed to disclose any terms likely to influence the buyer’s decision to close, including pending assessments and those likely to be assessed in the next several years, but the seller faces no recourse for not disclosing the information.

“The seller’s broker should be disclosing affirmatively this information, but … no one can force a seller to provide the information,’’ Moriarty said. “If you pose some questions, and the seller refuses to provide information, that could be a red flag.’’

Where should buyers look? Condo association documentation will note current and upcoming assessments.

But there’s no reason for mass panic regarding special assessments.

Those experts interviewed for this story said the majority of special assessments are disclosed and, if one is pending, the price of the listing is often discounted.

That doesn’t mean much now for Cramer in White Plains and the assessment that came in at roughly a quarter of her condo purchase price.

“There’s nothing we can do about it now, so people should just be made aware of the problem that can impact them,’’ she said.

Greene initially feared she might have to sell her Harbor Towers condo when the special assessment arrived back in 2007, as the full payment was due in a matter of months after first getting levied.

Thanks to a financial adviser who told Greene to get a second mortgage based on her condo’s likelihood of appreciation, she was able to draw a line of credit on her condo to make the payment. She eventually made all the money up in her condo’s appreciated value and sold it five years ago.

During the worst of the Harbor Towers special assessment scuffle, Greene thought she would never live in a condo again. But she has moved into a different development and even went through another special assessment (this time for about $93,000 less than she owed at Harbor Towers in 2007), recognizing that what happened in Florida is a reminder of the importance of keeping a building safe.

“You know, assessments might actually be what they’re worth,’’ Greene said.

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