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Special Assessment Fees Condo

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JAM

Sophomore Member
Joined
Apr 8, 2016
Professional Status
Certified Residential Appraiser
State
Florida
Hello Appraiser Forum Members,

I am curious on how to figure out market value on a condo I am appraising that just received a $1,500,000 special assessment to 28 "lucky" (not! just kidding) home owners to be spread out in 10 years. How does this affect the value of the the condo if it was for sale and a prospective buyer had to pay approximately $5,357 per year in special assessment fees for 10 years?

This is a private appraisal I am doing, but the representative wanted to know how that would affect value on the subject property. Any resources or seasoned advice from your experience that I could think about to put in the report or tell the representative? How do I calculate market reaction for a special assessment like that when there aren't any known comparables with this issue?

Another concern was that some of the units have some mold issues that have to gutted. I don't think it would affect the subject directly, nor do I claim to be an expert as I have already recommended the representative to hire a mold home inspector to look at the subject property. If I am wrong on saying it wouldn't affect the subject directly, please let me know. I want to be accurate, not right.

Thank you for your time and input on the special assessment and mold issue.

JAM
 

nstanbru

Senior Member
Joined
Feb 19, 2009
Professional Status
Certified General Appraiser
State
California
If the special assessment was very recently enacted, it may be too soon to ascertain the effect. I would start by speaking with any agents that have had recent transactions in the development. They may offer some insight as to buyer reaction. I would also suggest that you get copies of any documents associated with the assessement so you have a complete understanding of all the associated details. I would also try to locate sales in competing developments that may also have a special assessment.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
$1500 spread over 10 years is such as small yearly amount I doubt it will have any impact on value. Usually an assesment is for an improvement that benefits the owners
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
sorry I misread it...yes that amount per year is a substantial amount of $ and depending on price range, likely would depress values to compensate for the $ due each year. Ask RE agents, look if there is anything listed. Then will have to find condos that sold with similar assesments to see what impact on value might be.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I've seen these kind of situations where to move the unit, the sellers offering to cover first year or two of assessments. What is the harassment for?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Another concern was that some of the units have some mold issues that have to gutted. I don't think it would affect the subject directly, nor do I claim to be an expert as I have already recommended the representative to hire a mold home inspector to look at the subject property. If I am wrong on saying it wouldn't affect the subject directly, please let me know. I want to be accurate, not right.

Was there roof leaks that might have affected a number of the units? What is the assessment for, (and what is the price range of units)? Remediation to point of gutting means mold could have progressed to a level impacting air quality/safety, the whole complex might be stigmatized by it. Take your time with this assignment gather all information.

Re need to see if there are lawsuits stemming from this, if part of the assessment is to cover legal fees (or is it all for repairs?).

Might be good to give a range of values depending on speculation of how severely (or not) assessment might impact value ( and marketing time as well). Would depend heavily imo if there are lawsuits going on and if mold was confined to just those units or there were roof leaks/window leaks possibly affecting structural elements of all units (or common element areas)
 
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