Buying At Millennium Tower: Due Diligence Essentials

Thinking about buying a condo at Millennium Tower in SoMa? The building delivers luxury living, but it has a unique history that calls for careful review. You want clarity on engineering, assessments, insurance, and lending before you commit. This guide shows you exactly what to verify, which documents to request, and how to structure your offer to protect your interests. Let’s dive in.

Why diligence matters at Millennium Tower

Millennium Tower has been in the spotlight due to post‑construction settlement and lateral movement. That led to engineering investigations, monitoring, litigation among stakeholders, and a multi‑phase retrofit intended to stabilize the structure with deeper foundation elements. Because conditions can change, you should confirm the most recent engineering reports, permits, HOA disclosures, and any settlement documents before relying on prior summaries. Elevated diligence is normal here, and the right process helps you buy with confidence.

What to request from the seller and HOA

Start by obtaining the full resale disclosure packet and supplemental HOA materials. Ask for these primary sources so you can verify status and costs in writing.

HOA and governance

• CC&Rs, bylaws, and current rules and regulations.
• Meeting minutes for the last 12 to 24 months and any board resolutions about the retrofit or repairs.
• Most recent reserve study and the current reserve fund balance.
• Current year budget, recent financial statements, and 12 to 24 months of operating cash flow.
• Records of any special assessments, including board minutes, owner vote results, lien terms, payoff schedules, and what portion, if any, is still unpaid.
• Assessment collection history and any delinquency list.
• Construction contracts or owner summaries for the retrofit, including change orders.

Engineering, construction, and monitoring

• Latest structural and geotechnical reports prepared for the HOA.
• Retrofit design documents, drawings, specifications, and the names of the engineer(s) of record.
• Construction schedule, milestones, anticipated completion dates, and any delays or change orders.
• Active permits and inspection records from the City of San Francisco Department of Building Inspection.
• Monitoring data and logs, including settlement and inclination reports and reporting frequency.
• Warranties and performance bonds for the retrofit work.
• Any independent peer review reports.

Litigation, claims, and settlements

• Settlement agreements that affect unit owners, including release terms and payment or credit provisions.
• Current pleadings and status if any litigation is ongoing.
• Insurance claim summaries, payments received, and any reservations of rights.
• Notices of liens or threatened liens tied to the retrofit or original construction.

Insurance and risk transfer

• HOA master insurance policy declarations and full policy forms, including limits, deductibles, exclusions, and any endorsements.
• Evidence of builder or professional liability coverage if relevant.
• Any recent policy changes tied to building issues.
• Requirements for individual owner policies and recommended limits.

Unit-level and amenities

• Any relocation or temporary occupancy plans that affect unit habitability or amenity access.
• Unit‑specific repair records, warranty work on interiors, and status of completion.
• Sales history and appraisal data for comparable units, noting any adjustments tied to building issues.

Engineering and construction essentials to verify

Understanding the retrofit is critical. Read these items closely and ask questions until you are clear on the plan and performance metrics.

• Retrofit approach and intent. Confirm the method used to connect the foundation to deeper, more competent strata. Clarify whether it is designed to stabilize movement or permanently fix it, and the claimed design life and redundancy.
• Engineer of record and peer review. Identify the licensed firms responsible for design and monitoring, and whether independent peer review was performed.
• Performance metrics and acceptance criteria. Learn what thresholds for settlement or inclination are considered acceptable and how they are measured.
• Monitoring program. Confirm how often data is collected, who analyzes it, when reports go to owners, and which readings trigger remediation.
• Permits and inspections. Verify that all required permits were issued and that inspections and sign‑offs are current. Unpermitted work can create lender and title issues.
• Construction impacts. Clarify expected noise, dust, staging areas, parking or access changes, and whether any temporary relocation or compensation policies apply.

Financial and insurance considerations

Your financial exposure depends on assessments, reserves, insurance, and the terms of any settlements. Review these in detail.

• Special assessments. Get the approved amount, payment schedule, whether the assessment is fully funded, and whether outstanding balances must be cleared at closing.
• Reserve adequacy. Check the reserve study and current balance to see if funds cover near‑term capital needs beyond the retrofit. High delinquencies or low reserves can signal future assessments.
• Lender and title impacts. Confirm with your lender and title company how the retrofit, liens, or settlement terms affect mortgageability or title insurance. Some lenders may require conditions or holdbacks.
• HOA master insurance and earthquake exposure. Master policies often exclude earthquake. Understand deductibles and how any large deductible could be assessed to owners after a covered loss.
• Tax implications. Some special assessments may be partially tax‑deductible in the year paid. Consult a tax professional for guidance.
• Developer or insurer recoveries. If the HOA expects recoveries to offset costs, review the evidence, timing, and whether the budget assumes those funds.

Legal and title protections

Your contract and escrow are tools to manage risk. Use them to ensure you can review materials and respond to new information.

• Resale disclosure packet. California law requires a complete package with HOA financials, governing documents, and known material facts. Ask for any HOA supplemental disclosures tied to the retrofit or litigation.
• Liens and judgments. Search public records for liens or judgments impacting the HOA or the unit tied to construction or unpaid assessments.
• Settlement language. Review any releases. These can limit future claims or assign credits and burdens among owners.
• Escrow protections. Consider holdbacks or seller credits to cover unresolved work, pending claims, or a portion of assessments not yet levied.
• Professional advisors. Retain a real estate attorney with HOA litigation experience and a structural or geotechnical engineer to review the building’s reports. Coordinate lender and title reviews early.

Buyer action checklist and timeline

Use this step‑by‑step plan to move from interest to closing with the right protections.

Before you write an offer

• Obtain the full HOA resale and disclosure packet and read it in full.
• Request the latest engineering reports, retrofit contract, and monitoring data.
• Confirm special assessments: total amount, paid or unpaid status, due dates, and whether any balance will be cleared at closing.
• Confirm permit status with the City’s building department and ask for permit numbers and recent inspection sign‑offs.
• Ask about any units subject to relocation or limited occupancy during work.
• Review recent meeting minutes for new funding requests or schedule changes.

During contingencies

• Include an HOA review contingency so you and your counsel can analyze all materials.
• Add an inspection contingency that allows review by a qualified structural or geotechnical engineer and access to monitoring data.
• Include a financing contingency conditioned on lender approval that does not impose unusual building conditions.
• Add a title review contingency addressing any liens, settlement terms, or encumbrances.
• Negotiate escrow holdbacks or seller credits for unresolved items or anticipated near‑term assessments.

At or before closing

• Confirm the seller has paid required assessments or that funds are held to clear them.
• Obtain the most recent monitoring report and a written summary of future monitoring and who pays for it.
• Verify insurance status and get the current master policy declarations. Arrange individual coverage, including earthquake, as needed.
• Confirm required notices to new owners are included in the title package.

Red flags to slow down or walk away

• Missing or outdated engineering reports, or reports not signed by licensed professionals with relevant high‑rise experience.
• Monitoring data showing new or accelerating movement without a clear mitigation plan.
• Large or imminent assessments with no credible funding source, low reserves, or high delinquencies.
• Unpermitted work or missing inspection sign‑offs for key phases.
• Ongoing litigation with unclear indemnities that could lead to uncapped owner costs.
• Insurance gaps such as unusually high deductibles or unclear earthquake strategy.
• Sellers unwilling to provide full documentation or reasonable time for review.

Lifestyle impacts to weigh

Beyond costs, consider daily life during and after construction. Noise, dust, staging areas, and reduced access to certain amenities may occur during active work. Ask for the contractor’s schedule, quiet hours, and building communication plans. Confirm if any amenities have temporary closures and how the HOA manages access or alternatives.

How a seasoned local broker helps

Buying in a complex, high‑profile tower calls for precise coordination. A hands‑on broker can gather the right documents fast, engage the lender early, and structure contingencies and credits that protect you. You also benefit from a vetted network of attorneys, engineers, insurance brokers, and lenders who understand San Francisco high‑rise transactions.

If you want a focused plan for Millennium Tower and guidance tailored to your goals, connect with Jeff Marples for a private consultation.

FAQs

Will the building’s history reduce my resale value?

• Market perception and the status of repairs and settlements influence value. Review recent sales in the building and verify current documentation. Resolved, well‑documented fixes tend to stabilize value, while uncertainty can reduce buyer pools.

Can I get a mortgage on a unit here?

• Many lenders will lend, but you may see added scrutiny or extra documentation. Engage a lender early and share HOA and engineering materials so underwriting can proceed without surprises.

Who pays for the retrofit and related costs?

• Costs can come from special HOA assessments, insurance recoveries, and any settlements among developers or contractors. Verify current allocations in the HOA records and CC&Rs.

Is it safe to live in the building during retrofit work?

• Safety depends on the approved plan, monitoring thresholds, and contractor protocols. Review safety plans, monitoring data, and any temporary relocation policies provided by the HOA.

Will title insurance exclude retrofit or litigation matters?

• Title commitments may list exceptions for specific liens or claims. Review the preliminary title report and ask the title company to clarify any exclusions before removing contingencies.