Are you worried about a surprise condo fee popping up before closing? You are not alone. Special assessments can be confusing, and in Downtown St. Louis they come up more often than you might expect. In this guide, you will learn what special assessments are, why they happen in downtown buildings, how they affect price and financing, and exactly where to find the facts before you sign. Let’s dive in.
What a special assessment is
A special assessment is a one-time charge the condo association levies on owners, separate from your monthly dues. Associations use it when an unexpected or large capital expense exceeds the reserve fund. Typical uses include major repairs to roofs, façades, elevators, parking structures, or mechanical systems, plus legal or insurance costs and code or life-safety upgrades.
Your building’s declaration, bylaws, and rules set how assessments are calculated and approved. State law in Missouri provides background rules for notice, collection, and enforcement. For building-specific interpretation, you can consult the association’s counsel or a Missouri real estate attorney.
Why Downtown St. Louis sees them
Downtown St. Louis has many historic loft conversions, mid-century towers, and newer infill condos. Older brick and masonry buildings often need façade and waterproofing work, especially after freeze–thaw cycles near the riverfront. Mid and high-rises may need elevator modernization and mechanical replacements as systems age. Parking garage repairs and historic-preservation or code updates also appear in downtown projects.
Here is how it usually unfolds:
- An engineer or reserve study identifies shortfalls or failing components.
- The board evaluates options such as raising dues, using reserves, levying a special assessment, or taking a loan.
- The board votes and issues a formal resolution with the amount, allocation method, and payment schedule.
How assessments affect your deal
Cash and closing logistics
The owner of record on the specified date is responsible for the assessment. If any portion is unpaid at closing, lenders and title companies usually require payoff or escrow. Some assessments are due in installments, which can shape who pays and when.
Pricing and marketability
A large announced assessment can reduce buyer demand and pricing. Buyers factor in the cost and the risk of future assessments if reserves look thin. Sellers often agree to pay part or all of an assessment to keep a deal on track.
Lenders and loan programs
Mortgage underwriters review project health, including reserve funding and special-assessment history. Some programs, including FHA and VA, and agency-backed loans review project eligibility that may be affected by assessments, reserve levels, litigation, or delinquencies. Many lenders require that outstanding assessments be paid at or before closing or clearly documented if the buyer will assume installments.
Liens, ledgers, and insurance
Unpaid assessments can become liens that show up in title searches. Reviewing the owner ledger helps you spot delinquencies across the building. If the assessment follows an insured loss, check how insurance proceeds are being applied alongside reserve funds.
Where to find the facts
Resale certificate or estoppel
Request a current resale certificate from the association or manager. It should state monthly dues, any special assessments on the unit, unpaid balances, and whether new assessments are planned. Verify the date so you know it is current.
Budgets, financials, and reserve study
Review the current budget, year-to-date financials, and balance sheet to see reserve levels. A reserve study or engineering report shows remaining useful life of major components and recommended funding. A large shortfall can signal a likely assessment.
Minutes, notices, and resolutions
Read the last 12 to 24 months of board minutes and any assessment notices or ballots. Ask for the signed board resolution authorizing the assessment, showing the total amount, unit allocation, and payment schedule.
Public records in St. Louis
Declarations, amendments, and recorded liens are filed with the local Recorder of Deeds. For downtown addresses inside the City of St. Louis, confirm records with the city office. If a parcel is in the county, check St. Louis County records. Local title companies can pull recorded documents and liens.
Verify accuracy
Cross-check the resale certificate with board minutes, resolutions, owner ledgers, and contractor contracts or invoices. Ask the association or manager for a written statement on any pending or likely assessments and whether a vote is scheduled. Coordinate early with your lender and title company to confirm payoff or escrow requirements.
Buyer checklist
- Obtain the resale certificate, current budget, year-to-date financials, reserve study or engineer’s report, and 12–24 months of board minutes.
- Ask directly: Are assessments levied or planned, what is the total amount, your unit’s share, and the payment schedule?
- Confirm whether the association has borrowed funds and the repayment terms.
- Request contractor bids, engineering reports, and the board resolution authorizing the work.
- Run a title search for recorded association liens and check the owner ledger for delinquencies.
- Talk with your loan officer about how the lender will treat the assessment and project eligibility.
- Budget for cash needs, including any assessment installments due soon and possible dues increases after work is complete.
Seller game plan
- Disclose any announced assessments early and keep your documentation organized.
- Decide whether to offer to pay the assessment in full, credit the buyer at closing, or price accordingly.
- If an assessment is levied after you go under contract, follow the contract language and be ready to negotiate responsibility.
Smart negotiation moves
- Common solutions:
- Seller pays the assessment in full prior to closing.
- Seller credits the buyer at closing, sometimes with escrow holdback until work is complete.
- Buyer assumes installments, with a price reduction or other concessions from the seller.
Helpful contingencies
- HOA document review contingency, allowing cancellation if documentation reveals unacceptable risk.
- Assessment contingency that triggers if a new or larger assessment appears during the process.
- Financing contingency tied to lender approval of the project and assessment status.
Budgeting tips
- Look beyond monthly dues. Include your per-unit share of any assessment in your cash plan.
- Study the reserve study for future needs and assess the building’s history of assessments.
- For sellers, expect concession requests for large assessments and plan pricing and terms accordingly.
Local notes for downtown
- High-cost items in downtown buildings often include masonry and façade restoration, roof and waterproofing, elevator modernization, and parking garage repairs.
- Many downtown associations use professional management. Up-to-date reserve studies, clear minutes, and stable management are positive signals. Sparse documentation or frequent turnover are red flags.
- Work with a local title company and a lender familiar with downtown condo projects for smoother underwriting and closing.
Work with a local expert
Special assessments do not have to derail your move. With the right documentation, clear lender guidance, and smart negotiation, you can protect your budget and make a confident decision. If you want a downtown-focused advisor who knows the buildings, boards, and lender expectations, reach out to Adam Briggs for a plan tailored to your unit or purchase.
FAQs
What is a condo special assessment?
- A one-time charge the association levies on owners to pay for expenses that exceed reserves, such as major repairs, insurance gaps, or code upgrades.
How common are special assessments downtown?
- Downtown buildings with aging systems or historic façades see them periodically, especially for elevators, masonry, waterproofing, or parking structures.
Who pays an assessment at closing in Missouri?
- Responsibility depends on the record date and your contract; lenders and title companies often require payoff or escrow before closing.
Can a lender deny a loan because of an assessment?
- Yes, some underwriters limit financing in projects with severe reserve shortfalls, frequent large assessments, or other eligibility issues.
Where do I find assessment details before I offer?
- In the resale certificate, budget and financials, reserve study, board minutes, and the board’s signed resolution; confirm with title and association records.
Do assessments lower a condo’s value?
- Large announced assessments can reduce demand and pricing, though completed capital projects may benefit the building long term.
