Building types
Condo in a converted building
A condominium created by converting an existing rental building, where non-purchasing tenants, the reserve fund and building-wide conditions carry into the declaration.
What carries over when a rental building is converted to a condo?
Quick Answer
What is the property interest, legally?
- The conversion plan filed with the Attorney General governs, and it is either an eviction or a non-eviction plan
- Under a non-eviction plan, tenants who did not buy keep their occupancy rights and their regulatory status
- The declaration and bylaws are new, but the building and its records are not
- Open DOB and HPD violations against the building survive the conversion
- The sponsor funds a reserve at conversion, and the adequacy of that reserve is a live question
How is a purchase of this type financed?
- The loan is a recorded mortgage, so mortgage recording tax applies
- Lenders look at the percentage of units sold and the percentage still tenant-occupied
- A high non-purchasing-tenant share can make a building non-warrantable for some programs
- Reserve adequacy and deferred maintenance affect the lender’s view of the building
Which taxes and building fees apply?
- Mortgage recording tax applies to the recorded mortgage
- NYS transfer tax and NYC RPTT apply, and sponsor sales often shift them to the purchaser
- The mansion tax applies at the statutory threshold
- Assessments to fund deferred work are a cost to plan for, not a tax
What does the approval path look like?
- Read the conversion plan and every amendment, including the tenant schedule
- Confirm whether the unit is vacant or subject to a non-purchasing tenancy
- Review the reserve fund, the engineer’s report and the building’s violation history
- Order the title search, the municipal searches and the questionnaire
- Closing held, deed recorded in ACRIS
What is a non-purchasing tenant?
A tenant who was in occupancy at conversion and chose not to buy. Under a non-eviction plan they keep the right to remain, and rent-regulated tenants keep their regulatory protection. A unit sold subject to such a tenancy is an investment, not a home a purchaser can move into.
Do old building violations survive a conversion?
Yes. Violations attach to the property and the building, not to the ownership structure, so DOB and HPD items open before the conversion remain open after it. They surface in the municipal search and they become the new board’s problem, funded by common charges or an assessment.
How much reserve fund is enough?
There is no single right number, but the engineer’s report in the conversion plan is where the answer starts: it lists the building systems and their remaining life. A reserve that does not cover the near-term items in that report points to an assessment rather than a surprise.
What else should you read before closing?
In the glossary
- Violation (cited against the premises)An agency record that a condition at a property does not comply with a code or rule. It attaches to the premises and follows the property through a...
- Certificate of Occupancy (C of O)The Department of Buildings document that fixes a building's legal use and occupancy. Lenders and title companies read it to confirm the property c...
- Municipal searchThe record search covering agency violations, municipal arrears and occupancy documents for a property. It runs alongside the land records search r...
- CovenantA recorded promise or restriction that runs with the land and binds future owners. Restrictive covenants limit what the property may be used for or...
- ACRISNew York City's public index of recorded property documents. Deeds, mortgages, satisfactions, easements and many liens are recorded here, which mak...
- ECB judgmentThe judgment entered on an unpaid or defaulted summons heard at OATH (formerly ECB). It is a collectible City debt tied to the respondent and to th...
Questions this raises
- What happens if the title search finds a problem before closing?Schedule B-I requirements are the punch list, not a dead deal. How New York closings clear old liens, missing satisfactions and name hits before th...
- What does title insurance cover?Old liens, recording errors, forged deeds, undisclosed heirs, easements: what a New York title policy covers, what Schedule B excludes, and how cla...
Title issues
- Open permitAn open DOB permit is work the City still shows as unfinished. It rarely kills a NYC deal outright, but it moves the date and it follows the buyer.
- Judgment lien against the sellerA docketed money judgment attaches to New York real property the seller owns in that county. Here is how it surfaces, how it clears, and who pays it.
Building types
- Standard condoA New York City condominium unit: real property conveyed by deed, recorded in ACRIS, with an undivided interest in the common elements.
- New-development condoA first sale from the sponsor of a newly built condominium, governed by an offering plan, often delivered on a temporary certificate of occupancy.
- Mixed-use condo with commercial unitsA condominium holding both residential and commercial units, where the declaration allocates common charges, voting rights and use restrictions bet...
- Townhouse and 1-4 family condo declarationA small building divided into condominium units, where outdoor space, party walls, multiple-dwelling registration and the certificate of occupancy ...
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Legal Disclaimer: This page is general information about New York practice. It is not legal advice, it does not account for the terms of any particular contract, building or transaction, and reading it does not create an attorney-client relationship. This is attorney advertising. Prior results do not guarantee similar outcomes.