What Happens With HOA Special Assessments When You Sell or Buy a Home in Minnesota?
When selling or buying a Minnesota home in an HOA, special assessments, both from the city and from the association, must be disclosed and negotiated before closing. Under MN Statute 515B.3-116, the owner at the time an assessment becomes due is responsible for payment. A buyer is NOT liable for any assessments absent from the Resale Disclosure Certificate (MN Statute 515B.4-107). Whether the seller pays the full balance at closing, credits the buyer, or the buyer assumes remaining installments depends entirely on how the purchase agreement is written, which is where your agent earns their commission.
By Darin Bjerknes | June 4, 2026
I was working with a seller in Woodbury last spring, a townhome near Tamarack Village, priced well, accepted an offer in a week. Three days before closing, the HOA management company delivered the resale disclosure packet. Inside was a special assessment notice: $8,400, levied the previous fall for a roof replacement. Half the units had already paid their share. The seller had no idea it existed.
That situation got resolved, the $8,400 came out of the seller's proceeds at closing, but it rattled them. They'd owned the townhome for six years, assumed they were current on everything, and nearly walked into closing with a surprise obligation that changed their net proceeds significantly. And I see some version of this story several times a year across the east metro, as aging townhome associations, many built in the late 1990s through 2000s, face major capital projects and shrinking reserve funds.
If you're buying or selling a townhome or condo in Woodbury, Oakdale, Lake Elmo, or anywhere in Washington County, understanding how special assessments work in a Minnesota real estate transaction is not optional. There are two entirely different types of special assessments, a specific statute that controls who pays them at closing, and purchase agreement language that can protect or expose either side if it isn't drafted carefully.
Two Kinds of Special Assessments, and They Work Very Differently
The word "special assessment" gets used loosely, and that's where confusion starts. In a Minnesota home sale, you're likely to encounter one of two distinct categories.
Municipal Special Assessments
A municipal special assessment comes from your city or county for public improvements that benefit your property, new streets, sidewalks, water main replacements, sewer connections, or curb and gutter projects.
In Woodbury and across Washington County, these are levied under MN Statute Chapter 429, appear on your property tax statement, and are typically payable over 10 to 20 years in annual installments. The homeowner can either pay the full balance off early or continue paying the installments with property taxes.
When you sell, the unpaid balance of a municipal special assessment represents a real cost. Buyers and sellers routinely negotiate whether the seller pays off the remaining balance at closing or whether the buyer assumes the installment obligation, and the purchase agreement controls that choice explicitly.
HOA / Association Special Assessments
An HOA special assessment comes from your homeowners association board for private, shared-space capital projects: roof replacement, siding, parking lot resurfacing, foundation repair, or any major expense that exceeds the association's reserve fund balance.
Under the Minnesota Common Interest Ownership Act (MCIOA), these assessments are governed by MN Statute 515B.3-116 and attach as a lien against individual units until paid.
In Minnesota, 82% of new homes built in the last decade are in an HOA. Washington County has over 200 townhomes listed for sale in spring 2026, and a large portion of those are in associations that are now 20 to 30 years old, exactly the age when roofs, siding, and mechanical systems start requiring major capital expenditure.
The timing of a special assessment relative to your closing date matters enormously.
The 515B.3-116 Rule: Who Owes the Assessment?
MN Statute 515B.3-116 establishes that the owner at the time an assessment is due is responsible for payment. This sounds simple. In practice, it creates friction when the timing of an assessment straddles the closing date.
Here's a common scenario:
An HOA board voted to levy a $6,000 special assessment per unit in October 2025, payable in three installments:
- November 2025
- March 2026
- September 2026
Your seller accepted an offer in April 2026 and is scheduled to close in June 2026.
The first two installments are already the seller's obligation. The third installment due in September, who pays that?
Under 515B.3-116 alone, the buyer would owe it because they'll be the owner when it's due.
But that's not how it has to go.
The purchase agreement can, and should, address this directly. In most transactions I handle in the east metro, we negotiate that the seller pays off the full remaining assessment balance at closing from proceeds, or provides the buyer a credit equal to the remaining installments.
Buyers don't love assuming someone else's infrastructure debt.
The Resale Disclosure Certificate: The Buyer's Legal Shield
This is the document that protects buyers under MN Statute 515B.4-107, and it's one of the most important pieces of paper in any townhome or condo transaction.
The seller is required to provide the buyer with a Resale Disclosure Certificate from the association before closing.
The certificate must disclose all of the following:
- Current regular monthly assessments
- Pending or levied special assessments
- Reserve fund balance
- Outstanding litigation
- Known deferred maintenance
Once the buyer receives the certificate, they have a 10-day period to review it and, if something is unsatisfactory, rescind the purchase agreement and recover their earnest money.
Here's the buyer-protection provision that sellers sometimes don't know:
Under 515B.4-107, a purchaser is NOT liable for any unpaid assessment that was not set forth in the Resale Disclosure Certificate.
If the seller fails to disclose a levied assessment and the buyer closes without knowing about it, the obligation stays with the seller, not the buyer.
This is why sellers should order the certificate the moment they list, not a week before closing.
Management companies in the Woodbury area, firms like Gassen and FirstService Residential, typically charge $200 to $500 for the certificate and take 5 to 10 business days to produce it.
Budget for that cost and timeline when you list.
What the Resale Disclosure Certificate Should Tell You About Reserve Funds
Beyond active assessments, the certificate reveals the association's reserve fund balance, and that number tells you a great deal about the association's financial health.
A reserve fund is what the association accumulates over time to pay for future capital projects.
If a Woodbury townhome association built in 2001 has a reserve fund that's only 15% funded, the roof was last replaced in 2007, and there are 120 units, you're looking at a significant special assessment in the near future, even if nothing has been formally approved yet.
Smart buyers ask their agent to pull recent board meeting minutes and look for any discussion of pending projects or votes on reserve studies.
A depleted reserve fund doesn't necessarily kill a deal, but it should inform your offer price.
I've seen buyers in Oakdale and Woodbury price in $5,000 to $10,000 for anticipated near-term assessments based on a reserve study that showed the association was severely underfunded.
How the Purchase Agreement Language Controls Everything
In Minnesota, the MNAR Residential Purchase Agreement has specific provisions that address special assessments, and this is where the deal gets made or broken.
There are three distinct categories the agreement can address:
Levied Assessments Payable With Property Taxes
These are municipal assessments billed as part of your annual property tax.
The purchase agreement designates whether:
- The seller pays the remaining balance at closing
- The buyer assumes the installment obligation going forward
All Other Levied Assessments
This covers HOA assessments that have been formally approved and levied by the board.
Again:
- Seller pays off at closing
- Buyer assumes the balance
The parties negotiate.
Pending Assessments
These are approved projects or votes that have not yet been formally levied as an assessment against the units.
The purchase agreement can specify that the seller is responsible for pending assessments as of the date the agreement is signed, protecting the buyer from a surprise levy that occurs between offer acceptance and closing.
The default in many purchase agreements is that sellers pay all levied assessments and buyers take on pending ones.
That default can hurt buyers significantly if the board has already voted on a $12,000-per-unit siding project but hasn't formally levied it yet.
In every townhome transaction I handle in the east metro, I make sure the pending assessment language is explicit, not assumed.
One practical note for buyers using FHA or conventional financing:
Some lenders will not fund a loan on a property with outstanding association assessments unless they're paid off at closing.
If you're financing a townhome with a levied assessment and your purchase agreement says the buyer assumes installments, your lender may reject that.
Have your agent confirm lender requirements before you negotiate the split.
The East Metro Townhome Landscape in 2026
Washington County and Woodbury in particular have a dense townhome market with over 200 units listed as of spring 2026, a meaningful share of the local inventory.
Many of these are in associations built between 1995 and 2010.
Typical life spans include:
- Roof systems: 25 to 30 years
- Vinyl siding: 20 to 30 years
- Parking lot asphalt: 15 to 20 years
A significant number of Woodbury-area associations are approaching or past those thresholds simultaneously.
That doesn't mean every townhome sale comes with a special assessment surprise, many well-managed associations have healthy reserves and predictable schedules, but it means buyers should treat the Resale Disclosure Certificate as essential due diligence, not a formality.
Frequently Asked Questions
If I buy a Minnesota townhome and discover later there was a special assessment that wasn't disclosed, am I responsible for paying it?
Under MN Statute 515B.4-107, you are not liable for any assessment not listed in the Resale Disclosure Certificate. The seller and/or the association bear the liability for failing to disclose it.
The HOA assessment on a condo I'm looking at is $14,000. Does the seller have to pay all of that at closing?
Not automatically. It depends on the purchase agreement. If the assessment is payable in installments, the parties can negotiate who assumes the remaining balance.
What's the difference between a municipal special assessment and an HOA special assessment?
A municipal assessment comes from the city or county for public improvements like street work, sewers, or sidewalk projects.
An HOA special assessment comes from the homeowners association for private shared-property projects like roofs, siding, or parking areas.
Can a seller be genuinely surprised by a special assessment they didn't know about?
Yes, and more often than you'd think. Sellers should contact their HOA management company before listing and ask whether any assessments have been approved, are under consideration, or are being discussed in recent board meetings.
How do I find out what special assessments are attached to a Woodbury townhome I'm buying?
Request the Resale Disclosure Certificate as early in the transaction as possible and review recent board meeting minutes for pending projects and votes.
How To Handle a Special Assessment in a Minnesota Home Sale
Step 1: Order the Resale Disclosure Certificate
Sellers should order the certificate as soon as they list.
Buyers should confirm it's included in their due diligence materials and review it before the 10-day rescission period expires.
Step 2: Review the Certificate for Both Levied and Pending Assessments
Look for:
- Any assessment already levied with unpaid installments
- Any approved project that has not yet been formally levied
Step 3: Review the Reserve Fund Balance
A reserve fund below 25% funded is a warning sign of future assessments.
Factor this into your offer price or ask for a concession.
Step 4: Negotiate Explicit Purchase Agreement Language
Your agent should address:
- Levied municipal assessments
- Levied HOA assessments
- Pending assessments
All in writing, not assumed.
Step 5: Confirm the Payoff or Credit Appears on the Closing Disclosure
At closing, verify that any assessment payoff or credit appears correctly on the closing disclosure.
If the seller is paying off a municipal assessment, confirm with Washington County that the lien has been satisfied before the deed records.
Thinking about buying or selling a townhome or condo in Woodbury, Oakdale, or anywhere in the east metro?
Special assessments, whether from the city or the association, can shift your net proceeds or your closing costs by thousands of dollars. The purchase agreement language is what protects you.
Reach out at [email protected] or book a call at calendly.com/darintheminnesotan.
Darin Bjerknes | Minnesōtan, Brokered by REAL | [email protected]
