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Assessment
Practical Law Glossary Item 9-567-0405 (Approx. 3 pages)
Glossary
Assessment
The process by which a municipality determines the assessed value of a property when calculating ad valorem taxes, such as real estate taxes. The methodology that a municipality applies in making its assessment varies based on the jurisdiction and the property type. How often assessments are conducted depends on where the property is located. Certain events, such as a sale or significant improvement of the property, typically trigger a new assessment of the property.
The term assessment is also used to identify a special tax or charge levied by a municipality against the owner of real estate benefiting from certain municipal:
- Infrastructure improvements, such as the construction or repair of sidewalks, roads, water or sewer lines, or storm drainage facilities.
- Services, such as sewer, water, trash removal, or tree trimming.
Private assessments can be levied by:
- A condominium association against the unit owners for the common expenses.
- A cooperative housing corporation against the owners of the cooperative interests for the costs associated with the operation and maintenance of the cooperative.
- A homeowners association, board of directors, or other governing body against the owners of real estate in a planned unit development or other common interest development for the cost of maintaining shared improvements or amenities, sometimes created under a declaration of covenants, conditions, and restrictions.
Depending on the property's jurisdiction and the type of expense:
- An assessment levied to cover a one-time expense or project may be called a special assessment. Examples are the cost to repair a storm-damaged roof in a condominium development or a municipality's cost to replace damaged or old infrastructure.
- A lien for the assessment may be imposed on the real estate when either the assessment is levied or payment is delinquent.