What is a Special Assessment in Wisconsin and Why Do I Have to Pay it in Full at Closing?
A special assessment in Wisconsin is a charge imposed by a local government, such as a city, village, or town, on property owners within a specific area for the purpose of funding public improvements or services that directly benefit the properties in that area. Special assessments are authorized under Wisconsin Statutes Chapter 66.0703 and are used to finance various public improvement projects such as:
Street construction or repair
Sewer or water system installation
Sidewalk construction or repair
Street lighting installation or maintenance
When selling a property, it's common for the Seller to pay any outstanding special assessments to in full before the property can be transferred to a new owner. The standard Offer to Purchase requires that the Seller pay these charges in full if the assessment was actually levied prior to the date of the Offer. This requirement helps ensure that the new property owner doesn't inherit outstanding debts related to public improvements or services that primarily benefit the property being sold. Paying off the special assessment in full also reduces the financial risk for the new owner, as they won't have to worry about unexpected expenses related to past improvements.
The specific requirements and procedures for paying off special assessments before selling a property can vary by local government. It's essential to consult with a real estate attorney familiar with the local regulations in your area to understand the requirements and process for addressing special assessments when selling your property.