Condo Assessments Explained For Chicago Buyers

Buying a condo in River North comes with a number you cannot ignore: the assessment. Whether you are a first-time buyer or moving up, monthly dues and the risk of special assessments can reshape your budget and your financing. The good news is you can spot most surprises before you write an offer.

In this guide, you will learn what assessments cover in downtown high-rises, how they affect loans and resale, and exactly which documents to review so you can buy with confidence. Let’s dive in.

What condo assessments cover

Monthly assessments (HOA dues)

Monthly assessments are the building’s operating budget in action. In River North high-rises, dues often help pay for:

• Building staff such as doormen, concierge, porters, and maintenance.
• Association-paid utilities like common-area electricity and water; some buildings include heat or hot water for units.
• Services and amenities: elevator service, chiller/HVAC maintenance, fitness centers, pools, cleaning, landscaping, and snow removal.
• Property management fees for on-site or third-party management.
• The association’s master insurance policy for the building’s structure and common elements.
• Routine repairs and maintenance, plus administrative costs and contributions to reserves.
• Parking or garage contracts when parking is part of the common elements.

Costs vary by amenity level, building age and systems, size and complexity, Chicago weather exposure near Lake Michigan, and local compliance obligations.

Special assessments (one-time or limited-term)

Special assessments are additional charges when regular dues and reserves are not enough for a major expense or capital project. Common triggers in River North include:

• Façade, brick, masonry, or window repairs and replacements.
• Elevator modernization.
• Roof replacement, podium or garage repairs, and structural fixes.
• Damage-related work or insurance shortfalls and large deductibles.
• Upgrades to amenities or building systems.

Collection can be a lump sum, an installment plan, or an ongoing increase tied to an association loan used to fund the project.

Reserves and reserve studies

Reserve funds cover predictable capital replacements like roofs, elevators, exterior work, and mechanical systems. A reserve study estimates the remaining life and cost of major components and recommends funding levels and schedules. Best practice is to follow a current reserve study and a long-term plan. Underfunded reserves raise the chance of special assessments. As a buyer, review the most recent reserve study and compare the current reserve balance to the recommended amount.

Why Chicago rules matter

Chicago’s Façade Inspection Program (FISP) requires periodic exterior wall inspections for applicable buildings. These inspections often uncover masonry and window repairs that can lead to large capital projects in older downtown buildings. For River North buyers, FISP-related work is a frequent driver of special assessments. Plan to review inspection reports, board minutes, and reserve funding with this in mind.

How assessments affect your budget

Monthly assessments are part of your carrying cost. When you budget, add HOA dues and any known special-assessment payments to your mortgage principal, property taxes, and insurance. Large or recurring special assessments can change your effective monthly cost. If the combined number goes beyond your comfort zone, consider other buildings or units.

Lending and loan approval

Lenders count HOA dues in your monthly obligations, which affects your debt-to-income ratio. Many lenders also review the condo project itself to confirm it meets standards for occupancy, finances, insurance, and governance. Project-level eligibility matters because it can determine which loan types are available for units in a building.

Here is what to expect:

• Special assessments and low reserves can trigger lender scrutiny or limit certain loan programs until issues are resolved.
• If a special assessment is already levied on a unit, most lenders require the seller to pay it off at closing or show an approved payment plan the lender accepts.
• If an assessment is planned but not yet levied, underwriters may review minutes and financials and factor the risk into your approval.
• Reserve adequacy expectations vary by lender. Very low reserves combined with a history of frequent special assessments can make financing harder.

Resale implications you should weigh

• Buyer pool: Higher dues or frequent special assessments can shrink your future buyer pool, especially among first-time buyers with tighter limits.
• Buyer perception: Repeated special assessments or thin reserves can signal deferred maintenance, which can dampen marketability and price.
• Disclosure and timing: Associations must disclose special assessments in resale documents. When assessments surface late, buyers and sellers often renegotiate.
• Financing limitations: If project-level issues restrict popular loan programs, fewer qualified buyers may be able to purchase, potentially lengthening market time.

What to review before you offer

High-priority documents

Request these early from the seller or listing agent so you can evaluate risk before waiving contingencies:

• Most recent annual budget and any approved amendments. Look for dues trends over the last 2 to 3 years and fast-growing line items.
• Current balance sheet and profit and loss statements, ideally for the last 3 years. Check operating cash and reserve balances.
• Most recent reserve study and the association’s reserve funding policy. Compare recommended reserves to actual balances.
• Minutes from board and annual owners’ meetings for the last 12 to 24 months. Scan for votes on capital work, planned assessments, and litigation updates.
• Copies of special assessment notices or resolutions, including repayment terms.
• Delinquency summary showing the percentage of owners behind on dues.
• Declaration, bylaws, and rules and regulations. Confirm reserve obligations, special assessment rules, voting thresholds, maintenance responsibilities, and rental or use restrictions.
• Master insurance declarations and evidence of fidelity bond and D&O insurance. Note deductibles, coverage types, and whether policies help mitigate special-assessment risk for uninsured losses.
• Litigation disclosures involving the association or major contractors.
• Management and vendor contracts for elevators, roofing, snow removal, and other major services.
• FHA/VA and conventional project eligibility letters if available.
• Any inspection reports, including FISP-related documents, plus the certificate of occupancy if applicable.
• Parking and commercial leases tied to common-area revenues, with expiration dates.

Practical red flags

• Reserves significantly below the reserve study’s recommendation.
• Multiple special assessments in recent years.
• High delinquency rates that put cash flow at risk.
• Large concentration of units owned by a single entity.
• Active litigation related to façade, structure, or developer claims.
• Buildings under developer control or recently converted, where obligations and warranties differ.
• Insurance gaps or very high deductibles that shift costs to owners.
• Frequent management turnover or contentious meeting minutes.

Buyer checklist and smart questions

Use this quick checklist during your contingency period or pre-offer diligence:

• Request: current budget plus last two budgets; current balance sheet and P&L; reserve study; meeting minutes (12–24 months); special assessment notices; insurance declarations; vendor contracts; reserve balance vs. recommended; delinquency summary; litigation filings; project eligibility status; FISP reports or other inspection documents.
• Clarify: assessments planned in the next 12–24 months, estimated amounts, and payment structure.
• Verify: any association loan or line of credit and its terms.
• Confirm: whether the seller will pay outstanding special assessments at closing or provide an approved payment plan acceptable to your lender.

Questions to ask the board, management, or your agent:

• Is there a current reserve study, and are reserves funded as recommended?
• Has the building received FISP reports, and are required repairs completed or scheduled?
• Are any assessments currently levied or under consideration? What are the payment options?
• What is the current delinquency rate and the collection policy?
• Is there active litigation that could result in assessments? What is the potential exposure?
• What is the master policy deductible, and what losses could lead to owner assessments?
• Are there long-term vendor contracts expiring soon that could change the budget?
• What percentage of units are investor-owned or rented, and how does that affect lender eligibility?

Ways to reduce your risk

• Get documents early and review them before waiving inspection or finance contingencies.
• Ask the seller for disclosures and proof of payment or plans for any existing assessments.
• Consult your lender at the start to understand project-level requirements and reserve expectations.
• Negotiate protections such as seller-paid assessments or an escrow at closing if a planned assessment is imminent.
• Inspect for deferred maintenance and align findings with meeting minutes and reserve plans.
• Confirm your HO-6 policy includes appropriate assessment coverage where available.

River North project patterns to watch

Certain capital needs appear often in downtown high-rises:

• Façade, masonry, and window work, frequently prompted by FISP findings.
• Elevator modernization in older towers.
• Mechanical and chiller replacements for central systems.
• Roof and podium or garage repairs tied to water intrusion or structural wear.
• Window seal and glazing projects for failed thermal seals and efficiency upgrades.
• Deck, terrace, and amenity renovations with waterproofing.

Seasonal construction windows and Chicago winters can compress schedules and affect costs, so timing and planning matter.

Work with a local advocate

Assessments do not have to be a guessing game. With the right documents and a focused review, you can understand the true monthly cost, identify upcoming projects, and protect your financing. If you want a hands-on, senior broker who knows downtown high-rises and how boards operate, connect with Cara Buffa for a personal, one-on-one strategy.

FAQs

What do monthly condo assessments include in River North?

• They typically cover building staff, common utilities, amenities and services, property management, the master insurance policy, routine maintenance, and reserve contributions.

What is a special assessment and how is it paid?

• It is an extra charge for major projects when dues and reserves fall short; it may be collected as a lump sum, through installments, or as an ongoing increase tied to an association loan.

How do assessments affect condo mortgage approval in Chicago?

• Lenders count dues in your monthly obligations and review the project; special assessments and low reserves can limit loan options or require proof of payment plans and adequate insurance.

What is Chicago’s Façade Inspection Program (FISP) and why care?

• FISP requires periodic exterior wall inspections for applicable buildings; resulting repairs often drive large capital projects and special assessments in downtown high-rises.

Which HOA documents should I review before making an offer?

• Review the budget, financials, reserve study, minutes, special assessment notices, insurance documents, governing documents, litigation disclosures, vendor contracts, eligibility letters, inspection reports, and any revenue-related leases.

Can a seller be required to pay a special assessment at closing?

• Many lenders require outstanding, levied assessments to be paid by the seller at closing or documented under a lender-approved payment plan.

Do higher dues hurt resale in River North?

• High dues or a history of frequent assessments can shrink the buyer pool and affect marketability and price, especially if financing options are limited by project issues.