I would say that it would have to be capitalized, but that is a guess based on very limited information. If the dry rot existed when you purchased your condo, you definitely would have to capitalize the costs since they were incurred to fix a material defect in the property that existed before you purchased the property. If this was not the case, it could be repairs and be expensed, but that would depend on multiple factors. Perhaps the condo association could engage a local CPA to give all of you guidance how to treat the assessment.
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