Two similar downtown Chicago condos can have very different monthly assessments, and buyers notice. The assessment pays for running the building and saving for future repairs. Whether yours is high or low, what moves your sale price is what it covers and how well the building is funded. If you're selling, you'll want to explain your building's finances before a buyer's attorney finds questions in the documents.
What a Chicago Condo Assessment Covers
A condo assessment is the monthly amount you pay the association to run the building. It's separate from your property taxes and your own condo insurance. Most assessments fund two things:
- Operating costs: staffing and management, common-area utilities, cleaning and maintenance contracts, the master insurance policy, and administration. Many downtown buildings also include water and trash, and some include heat. Parking is often separate when spaces are deeded or leased.
- Reserves: savings for long-term capital work such as roof replacement, elevator modernization, boilers and chillers, façade and window projects, and garage repairs. A healthy reserve contribution lowers the chance of a special assessment later.
Assessments don't cover your mortgage, most in-unit utilities unless they're billed centrally, or your personal upgrades. They also don't replace your own HO-6 policy, which covers your belongings and gaps beyond the master policy.
Special Assessments
A special assessment is a one-time or installment charge when the association needs money beyond its regular budget. Common triggers in Chicago high-rises include mechanical failures, masonry and window projects, elevator upgrades, garage repairs, and water damage. A large master policy deductible after an insurance claim can also lead to one.
Boards levy special assessments under the building's declaration and bylaws and the Illinois Condominium Property Act. Some projects can be approved by the board alone, while larger ones may require an owner vote. Unpaid assessments become a lien on the unit.
When you sell, a special assessment becomes part of the negotiation. Buyers often ask the seller to pay the remaining balance or give a credit at closing. Here's what sellers and buyers should know about a special assessment, using a Lakeshore East example.
How Your Building's Finances Affect Your Sale
Buyers aren't just buying your unit. They're buying a share of the building's budget, reserves, and future projects. That affects your sale in three ways:
- Financing: lenders review the association's budget, reserves, delinquency rate, litigation, and special assessments. Weak reserves, high delinquencies, or active litigation can limit which loans buyers can use, which shrinks your buyer pool.
- Value: appraisers and buyers weigh the monthly cost of ownership. A pending special assessment or a history of repeated ones can lower offers.
- Comparison: buyers compare your total monthly cost with similar units in nearby buildings. A higher assessment that includes heat, amenities, and strong reserves can compete well. A low assessment in an underfunded building often doesn't hold up once buyers read the documents.
A lower monthly assessment doesn't always mean a lower cost of ownership, and informed buyers know it. Here's why a lower monthly assessment doesn't always mean a lower cost.
What Sellers Should Do Before Listing
- Request your Section 22.1 documents early. Illinois requires sellers to give buyers the building's governing documents, budget, reserve information, and other disclosures. Associations can take weeks to deliver them, so ask before you list.
- Read them the way a buyer will. Check the reserve balance, planned capital projects, assessment increases, the delinquency rate, the master insurance deductible, and any litigation.
- Know about any special assessment. If one is approved or under discussion, factor it into your price and decide in advance how you'll handle it in negotiation.
- Explain what your assessment includes. If it covers heat, internet, or a full-time door staff, say so in the listing. Buyers compare totals, not just the monthly number.
- Point to the strengths. A recent reserve study, completed major projects, and stable assessments are selling points. Put them in front of buyers.
What Buyers Should Review
If you're comparing downtown buildings, request these documents and review them with your attorney before your attorney review period ends:
- the current budget and year-to-date financial statements
- the most recent audited or reviewed financial statements
- the reserve study, its date, and the current reserve balance
- board minutes for the past 12 months
- special assessment and assessment increase history for the past several years
- completed and planned capital projects
- master insurance coverage and deductibles
- the delinquency rate and any litigation
- rental, occupancy, and parking rules
Red flags include no recent reserve study, a reserve balance far below what the study recommends, repeated special assessments, rising legal fees or active litigation, and a master policy with a very large deductible.
What's Different About Downtown High-Rises
Many high-rises in Lakeshore East, Streeterville, River North, the Gold Coast, the South Loop, and the West Loop offer door staff, fitness centers, rooftop decks, package rooms, bike storage, and sometimes pools. These add value, but they also add staffing and operating costs. Large towers depend on boilers, chillers, and central HVAC systems that are expensive to replace, and window walls, masonry, and balconies need periodic work. Chicago winters add heating, snow removal, and freeze-related maintenance.
Building type matters too. Newer towers may have stronger reserves but higher amenity costs. Older loft conversions often have fewer amenities but may face exterior or mechanical upgrades. Knowing where your building stands in each project's life cycle helps you, and your buyers, forecast future costs.
How My 3P-to-SOLD™ Strategy Applies
- Prepared: your 22.1 documents are requested and reviewed before you list, so there are no surprises.
- Priced: your condo is compared with recent sales in your building and nearby buildings, adjusted for what each assessment covers and how well each building is funded.
- Protected: special assessments and building questions are addressed up front, so attorney review stays on schedule, and a backup offer is pursued whenever possible.
Frequently Asked Questions
What does a Chicago condo assessment include?
It usually covers staffing and management, common-area utilities, maintenance contracts, the master insurance policy, administration, and a reserve contribution for future capital projects. Some buildings also include heat, water, or internet.
Does a high assessment hurt my condo's resale value?
Not necessarily. Buyers often accept higher assessments that include utilities, valuable amenities, and strong reserves. Repeated special assessments and unstable budgets do more damage than a high monthly number.
Who pays a special assessment when I sell my condo?
It depends on your contract. Buyers often ask the seller to pay the remaining balance or give a credit at closing, so it's usually part of the negotiation.
When should I request my condo's Section 22.1 documents?
Before you list. The association can take weeks to deliver them, and reviewing them early lets you price and negotiate with no surprises.
How do I know if my building's reserves are healthy?
Compare the current reserve balance with the recommendations in the most recent reserve study. A recent study and a balance close to its recommendation are good signs.
What triggers a special assessment in a downtown Chicago high-rise?
Common triggers include mechanical failures, window and masonry work, elevator upgrades, garage repairs, water damage, and large insurance deductibles after a claim.
Thinking About Selling Your Downtown Chicago Condo?
Your building's finances are part of your price. If you're planning to sell in the next year, request your condo selling strategy: what your condo could sell for, what's worth fixing first, and how it compares with others in your building and nearby.
About Larissa Brodsky
Larissa Brodsky is a Chicago real estate broker affiliated with Compass and has been in Chicago real estate since 2008. She specializes in downtown Chicago condominiums, including Lakeshore East, Streeterville, River North, the Gold Coast, and the South and West Loop. With a background in technology and a strategic, detail-oriented approach, she helps sellers navigate pricing, property preparation, marketing, negotiations, and the closing process.
This article provides general educational information. Association rules, contract terms, and lending requirements vary. Consult your real estate attorney about your specific building and sale.
