Special service area and special assessment areas

Does everyone know about these?

They're tricky and you need to be aware of them...particularly in the outlying, new growth areas. I remember running into one on a deal in Bolingbrook not too long ago. And in this post, I'm going to wear my residential real estate attorney hat.

Here's the gist of the special service or assessment area, a developer finances their new development (roads, sewers, sidewalks, ect.) through tax-exempt bonds. Then, these bonds actually get re-paid by the benefited properties. Why are they important? They can carry a pretty large price tag for the undiscerning buyer in these new developments over many years.

What to know:

• Look closely at your title committment...the ordinance creating the service area must be recorded against the properties.
• Most municipalities require the developer to provide a disclosure rider to the sales contract of the initial buyer.
• Be particularly wary of secondary transactions...does the assessment have to be paid off by the Seller?
• Has the Buyer's acceptance of the assessment been accurately reflected in the purchase price?

These can be tricky. Get proper disclosures up front and make sure you/your client is getting compensated appropriately.