Staring at a condo you love but unsure what those monthly assessments really cover? You are not alone. In Chicago, assessments and special assessments can shape your budget, your mortgage, and your peace of mind. In this guide, you will learn what assessments fund, how reserves work, what to review in a resale packet, and how to budget and negotiate with confidence. Let’s dive in.
What condo assessments cover in Chicago
Monthly assessments fund the day-to-day operation of the building and future repairs. A board prepares a budget each year, and dues are set to cover that budget and contributions to reserves. Your share is usually based on the allocation formula in the declaration, such as percentage interest or unit factor.
Common operating costs include management, building staff, janitorial and trash, landscaping and snow removal, common-area utilities, elevator and HVAC contracts, pest control, security systems, and the association’s master insurance. Some buildings also include debt payments for past capital projects in the budget, which raises monthly dues.
Utilities and insurance details
In many Chicago buildings, certain utilities are included in assessments. Water is common, and sometimes heat or gas is included too. Always confirm what is included for the specific building because it affects your monthly costs.
The master insurance policy typically covers the structure and common areas. You will still need an HO-6 policy for interior improvements and your belongings. Ask for the certificate of insurance and a summary that shows what the master policy covers versus owner responsibility.
Reserves and reserve studies
A reserve fund pays for big-ticket items like roofs, boilers, elevators, façade work, and parking membranes. Healthy reserves help reduce the chance of surprise special assessments. Best practice is to refresh a reserve study every few years so the board can plan funding and timing for replacements. For an overview of industry standards, review guidance from the Community Associations Institute.
Special assessments: how they happen
A special assessment is a one-time charge when operating funds and reserves are not enough to cover a major project or emergency. In Chicago’s older masonry buildings, common triggers include roof membrane replacement, tuckpointing and façade repairs, elevator modernization, boiler or central plant replacements, window projects, and parking garage structural work.
Your declaration and bylaws explain how a special assessment is allocated and approved. Board meeting minutes and official notices will show when a vote occurred and how payments are scheduled. The resale or estoppel certificate usually discloses any assessments that are approved or pending.
What to review before you buy
Request the resale packet or estoppel early in your contract period. Then review these items carefully with your agent and attorney:
- Current budget, year-to-date statements, and the latest balance sheet
- Reserve study, current reserve balance, and recent reserve spending
- Minutes of board and owner meetings for the past 12 to 24 months
- Declaration, bylaws, and rules to confirm allocation formulas and assessment authority
- Certificate of insurance and master policy summary
- Estoppel showing current dues, amounts owed, and any pending special assessments
- List of current or upcoming capital projects, plus any board resolutions
- Details on any association loans or mortgages
- Litigation disclosures and owner delinquency levels
- Parking and storage policies and any capital plans for those areas
Key red flags and signals
- Reserves far below the reserve study recommendation
- Board discussions about major projects without a funding plan
- Recently approved or proposed special assessments
- Association loans that will add to dues for years
- High owner delinquency rate or active litigation
- Utilities not included, which can shift more costs to owners
How assessments affect your mortgage
Lenders review condominium projects during underwriting. They often request a condo questionnaire and may analyze the budget, reserve contributions, delinquency levels, and any special assessments. Projects with major deferred maintenance or a large pending special assessment can face stricter review, and some loan programs have specific project eligibility criteria.
Tell your lender about any special assessment as soon as it is disclosed and share the resale packet promptly. Review general condo financing considerations from the National Association of Realtors, and keep your financing contingency aligned with how your lender handles assessments.
Budgeting and negotiating smartly
Plan for monthly assessments as part of your total housing cost and keep a personal contingency for unplanned building expenses. Older Chicago buildings often require periodic capital work even with good planning. Budgeting for both dues and a rainy-day fund will help you avoid surprises.
If an assessment is known, negotiate with the seller. Options include having the seller pay the assessment at or before closing, a closing credit, or an escrow holdback. Ask for an updated estoppel shortly before closing so you know the exact amounts due and any pending charges.
Quick buyer checklist
Use this shortlist when you request documents and tour buildings:
- Request the resale packet or estoppel early
- Review the current budget, balance sheet, and reserve study
- Check minutes for any approved or proposed special assessments
- Confirm which utilities are included in dues
- Ask about recent capital projects and upcoming plans
- Verify master insurance coverage and your HO-6 needs
- Ask for owner delinquency levels and any association loans
- Confirm how assessments are allocated to units
- Share disclosures with your lender and get guidance
- Negotiate seller responsibility or an escrow if an assessment exists
Compare buildings like a pro
Look at each building’s history with special assessments, the age and condition of major systems, and the discipline of its reserve funding. Buildings with more amenities may have higher dues, but they can also have professional staffing and consistent maintenance. When possible, attend a meeting or speak with board members or management to learn about upcoming projects.
For local market context and buyer resources, the Chicago Association of REALTORS is a helpful starting point. For property tax information, visit the official resources provided by Cook County. Remember that unit property taxes are separate from assessments, while some associations carry taxes on common elements within the association budget.
Ready to shop Chicago condos?
You do not need to decode condo documents alone. If you want help reviewing reserves, minutes, and resale disclosures before you write an offer, or if you are comparing buildings across the North Side and nearby suburbs, reach out. Schedule a buyer consult or plan a targeted condo tour with an experienced local team. Connect with Meldina Dervisevic to get clear next steps and a confident plan.
FAQs
What is a condo assessment in Chicago?
- Monthly assessments are dues set by the association to fund operating expenses and contributions to reserves. Your share is based on your unit’s allocation in the governing documents.
What is a special assessment and why is it used?
- A special assessment is a one-time charge to pay for major or unexpected projects when reserves are insufficient. Common Chicago drivers include roof, façade, elevator, boiler, and parking structure work.
How can I find out if a special assessment is pending?
- Check the resale or estoppel certificate and review recent board and owner meeting minutes. These documents disclose approved or proposed assessments.
Do assessments include utilities and insurance?
- It depends on the building. Some include water and heat, while others do not. The master policy covers the structure and common areas, but you will need an HO-6 policy for interior coverage.
Can assessments affect my loan approval?
- Yes. Lenders review the project’s finances, reserves, delinquency levels, and any special assessments. Share the resale packet early and follow your lender’s guidance.
What documents should I request before buying a condo?
- Ask for the budget, financial statements, reserve study and balance, meeting minutes, insurance documents, governing documents, estoppel, construction plans or contracts, loan details, litigation disclosures, and delinquency levels.
Where can I learn more about reserves and best practices?
- Review resources from the Community Associations Institute for guidance on reserve studies, special assessments, and association financial planning.
