Condo Special Assessments In Chicago: Buyer Guide

Thinking about a River North condo but worried about surprise fees after closing? You’re not alone. Special assessments can pop up and change what you pay each month, or force a big one-time payment you did not plan for. The good news is you can spot most risks early if you know where to look and what to ask. In this guide, you’ll learn how special assessments work, how to use Illinois 22.1 disclosures, and what to watch for in River North buildings so you can buy with confidence. Let’s dive in.

What a special assessment is

A special assessment is an extra charge your condo association collects for specific needs. It is separate from the regular monthly assessment. Associations levy these fees to cover big or unexpected costs such as façade and masonry repairs, elevator overhauls, roof or waterproofing work, window replacement, mechanical systems, parking-deck repairs, or legal expenses not covered by insurance.

You care because special assessments affect both your cash flow and your long-term return. They can lead to higher monthly obligations if paid in installments or require a lump sum at once. They can also signal deferred maintenance or thin reserves in the building.

Why it matters in River North

River North has a mix of converted lofts and purpose-built condo towers. Many buildings are older masonry structures or high-rise glass towers with amenities. That variety brings different cost profiles. Masonry and window work, elevator modernization, and mechanical plant replacement are common across the neighborhood. Amenity-heavy buildings can also see higher capital and operating needs over time.

When reserves do not match upcoming projects, a special assessment is often the solution. Your goal is to understand the building’s roadmap before you commit.

How 22.1 disclosures help you

Illinois condominium law requires sellers to provide a packet of association information commonly referred to as Section 22.1 disclosures. This packet is designed to help you evaluate the association’s financial and operational health. It typically includes the current budget, financial statements, governing documents, insurance information, and disclosures about assessments and litigation.

The statute provides a right to receive the packet and a limited time to review and potentially cancel after receipt. Exact timelines and procedures vary, so have your attorney confirm the current requirements and your options. The packet is a starting point, not the final word, and many items require follow up.

Where to find assessment clues

Review these documents in your 22.1 packet to find current, pending, or likely assessments:

• Association budget (current and prior year). Look for line items labeled special assessments or capital improvements. Compare reserve contributions to operating needs and past shortfalls.
• Balance sheet and reserve statements. Check the reserve balance relative to expected replacements. A low or zero reserve is a red flag.
• Reserve study. A recent study outlines when major components need replacement and how much funding is required. The absence of a study is itself a risk.
• Meeting minutes from the last 12 to 24 months. Search for engineer reports, contractor bids, votes, or notices related to capital projects and assessments.
• Written resolutions or owner notices. These record approved assessments, dates, amounts, allocation method, and payment terms.
• Seller’s unpaid assessment statement. Confirms whether the seller owes money that must be handled at closing.
• Contracts, bids, and engineering reports. Signed contracts or clear bids for major work suggest an assessment if reserves are insufficient.
• Litigation and insurance claim disclosures. Active lawsuits or claims tied to common elements can lead to future costs if not fully insured.
• Governing documents. Confirm how the association allocates special assessments, whether board-only approval is allowed, and what vote thresholds apply.

How assessments are allocated and paid

Allocation depends on the declaration and bylaws. Many associations allocate by each unit’s percentage interest in the common elements. Other buildings use per-unit or square-foot formulas. Larger units often pay a larger share. Parking spaces, storage, and commercial units may have separate treatment, so confirm how your deeded components are handled.

Associations may allow lump-sum payment or installments. Some charge interest on payment plans. If the association has an underlying loan to fund a project, you may pay via monthly charges for a period of years. Always confirm the terms and timing.

Quick example

If a building levies a 500,000 dollar special assessment and your unit’s allocation is 0.75 percent, your share equals 500,000 times 0.0075, or 3,750 dollars. Ask the association to show its math, rounding rules, and whether parking or storage is included.

Budgeting, lending, and insurance impacts

A special assessment hits either your savings or your monthly budget. It can also affect lending. Mortgage underwriters evaluate the stability of the condo project. Large or recent assessments may change your debt-to-income calculation if you choose installments. Some loan programs have specific rules about projects with pending assessments or low reserves. Lenders may ask for documentation that the assessment is approved and payable under a defined plan.

Insurance and risk also matter. If an assessment is tied to uninsured damage, review the association’s coverage and deductibles. Chronic assessments or underfunded reserves can affect resale and liquidity, since some buyers and lenders will be cautious.

River North risk patterns to watch

Different building types in River North tend to face different maintenance themes:

• Older masonry or loft conversions. Masonry and façade tuckpointing, window replacements, roofs, and waterproofing are common needs. Freeze-thaw cycles and urban exposure accelerate wear.
• Mid and high-rise towers. Elevator modernization, mechanical plant replacements, and envelope remediation for water infiltration can drive large projects.
• Buildings with structured parking. Parking deck repairs and waterproofing can be expensive.
• Amenity-heavy properties. Pools, fitness centers, concierge staffing, and parking operations increase both operating costs and long-term capital needs.

None of these are deal breakers. They are simply signals to verify reserves, review the reserve study, and confirm whether work is already planned and funded.

Document checklist before you offer

Request these items early so you have time to review and ask follow-up questions:

• Full Section 22.1 disclosure packet.
• Current year budget and prior year budgets.
• Most recent financial statements and reserve bank statements.
• Latest reserve study and any capital expenditure plan.
• Board and owner meeting minutes for the last 12 to 24 months.
• Written resolutions authorizing any special assessments.
• Contracts, bids, and engineering or architect reports for capital work.
• Certificate of insurance and summaries that show deductibles.
• Documents for any pending litigation or insurance claims.
• Governing documents: declaration, bylaws, and rules.
• Seller’s statement of unpaid assessments and confirmation of current status.
• Any owner communications about upcoming projects or anticipated funding needs.

Smart questions to ask

Direct questions help you clarify risk and timing:

• Is any special assessment already approved? If yes, what is the amount, allocation method, payment schedule, and effective date? Did the vote meet required thresholds?
• Are there pending votes or owner ballots that could lead to an assessment soon?
• What is the current reserve balance and what level does the latest reserve study recommend?
• Have engineers or attorneys advised immediate work or flagged future costs?
• Are any contracts signed for capital work and how will it be funded?
• Are there open permits, code issues, or city orders that could trigger costs?
• How are parking and storage treated in special assessments?
• Are installment plans available, and is interest charged? Is payment required at closing for sellers?
• Has the association recently increased monthly assessments, and why?
• Are there pending insurance claims or litigation, and what is the potential exposure?
• Will your lender accept the project given the assessment history and reserve levels?

Negotiation and protection strategies

Structure your offer and timeline to keep options open:

• Build in time. Make sure the contract allows enough time to receive and review the 22.1 packet and related documents. Your attorney can guide specific timelines.
• Attorney review. Ask your attorney to confirm that any special assessment was approved consistent with the bylaws and state law. They can also flag gaps in the 22.1 packet.
• Representations. Request that the seller represents there are no assessments other than those disclosed.
• Credits or escrow. If an assessment is imminent but not yet levied, negotiate a seller credit or an escrow holdback to cover your estimated share.
• Reprice or walk away. If the building shows chronic underfunding or a large upcoming project without a plan, consider renegotiating or moving on.
• Lender consultation. Share the 22.1 packet with your lender early so underwriting questions do not surface at the last minute.

Step-by-step buying workflow

A simple, predictable process keeps you in control:

1. After contract acceptance, request the full 22.1 packet immediately.
2. Have your attorney review legal compliance, current and pending assessments, and the seller’s unpaid status.
3. Review financials, minutes, and the reserve study. Call your lender to confirm any underwriting implications.
4. If red flags appear, negotiate solutions such as price adjustments, credits, escrow, or extended review. Remove contingencies only after issues are resolved.
5. Before closing, verify that settlement statements prorate assessments correctly and that any seller obligations are satisfied.

How to decide with confidence

Buying a River North condo can be a great move if you verify both the lifestyle fit and the building’s financial health. Special assessments are not always a negative. They can reflect responsible catch-up work or a one-time upgrade that preserves property value. Your job is to understand the size, timing, frequency, and funding plan, then confirm how they fit your budget and lender requirements.

If you want a steady, experienced guide that understands both the transaction and the day-to-day realities of condo ownership, our family-run team is here to help. We combine Chicago condo brokerage experience with hands-on property management insight, so you get practical advice from contract to closing and beyond. Reach out to TGI Realty for a focused River North condo consult.

FAQs

What is a condo special assessment in Chicago?

• It is a one-time or limited-period charge by the association to fund specific costs such as capital repairs, emergency work, uninsured damage, or legal expenses separate from monthly assessments.

Where do I find assessments in an Illinois 22.1 packet?

• Check the budget, financial statements, reserve study, meeting minutes, written resolutions or notices, litigation disclosures, and the seller’s unpaid assessment statement.

How are special assessments allocated in River North buildings?

• Allocation methods vary by declaration, often by percentage interest or per unit; larger units and deeded components like parking may carry higher shares based on the governing documents.

Will a special assessment hurt my mortgage approval?

• Not automatically, but lenders review project stability, pending assessments, and reserves, and some loan programs have rules that may affect eligibility or require more documentation.

How are special assessments handled at closing?

• Assessments already due and unpaid are commonly prorated or collected from the seller at closing, while upcoming assessments are negotiated in the contract; confirm local practices with your attorney and closer.