We're bringing up special assessments, because frankly, we've never really talked about them here on the pLog. They're one part of the whole municipal lien search puzzle that gives a buyer a clear look at the financial health of a property and can be tricky to track down. While you may be totally familiar, perhaps your client isn't aware of just how crucial this piece is to ensuring they know exactly the financial situation they're getting into.
Here's the classic conundrum: You are buying a home. You have searched the current owner's name in the clerk of the court and requested the most current utility balance on the property. However, after closing, you come to find that there is an unpaid assessment on the property for sewer connection. Where did you go wrong?
What is a special assessment?
Special assessments are charges levied against a particular property that will gain a benefit from a public project. Special assessments typically include infrastructure improvements such as new roadways, street lights, or sewer and water connections to the municipal supply. This type of charge is not covered in the taxes of the property.
In addition to public special assessments, living in a Condo, townhome or house that is part of an HOA or COA may also see special assessments levied by the private association. This can go toward anything in the community that will improve the general amenities for the residences. This assessment is in addition to HOA fees.
How do you find a special assessment?
The major problem with public special assessments is that they can be easy to lose track of on a property that has changed owners several times since the assessment was first placed on the property. Special assessments are usually found in the public record of the county, but not always. If a new buyer is not aware of the chain of title and only does a name search in the clerk of the court on the most current owner, the assessment and pay off will not be found under that owner. This is why it is imperative to get an official assessment search, payoff request, or lien search from the municipality who would be responsible for levying the assessment.
For instance, in Pasco county, any property, whether it be in the jurisdiction of the county or in an incorporated city, has the potential of being assessed for paving improvements by the county. Unless this is specifically requested from the county, the unpaid assessment may be missed. To ensure that no amounts owed to the municipality are overlooked, it is highly advised to always get this paving assessment search completed by the county for every property in Pasco.
Palm Beach County also levies special assessments on property for pavement, water, and sewer connections. Although the original lien might be easy to find on the owner that it was levied on at the time in the clerk of the court, this lien does not always list the most current amount owed to the municipality due to interest or adjustments in cost. A payoff request must be made to the county in order to receive the most accurate amount due before the closing.
It's the job of our property analysts to work diligently to report all money owed to a municipality or homeowner's association on commercial or residential property. We know that special assessments can be especially sneaky for a new home buyer. We've got your back. ;)