Building types in Manhattan
New development condos in Manhattan
A Manhattan new development purchase is governed by the sponsor’s offering plan, and the plan is written by the sponsor for the sponsor.
What is different about buying a new development condo in Manhattan?
Quick Answer
A Manhattan new development purchase is governed by the sponsor’s offering plan rather than by a negotiated contract of sale. The plan allocates closing costs, sets the delivery obligations and defines what the sponsor has promised. Very little of it is negotiable, which makes reading it the whole of the diligence.
Which condominiums of this kind are actually in Manhattan?
- Tower construction through Midtown, the far West Side, Chelsea and the Financial District
- Smaller boutique buildings on the Upper East and West Sides and in the Village
- Conversions of office and institutional buildings declared as new condominiums
- Buildings where the amenity program is extensive and permanently funded through common charges
What changes about the waiver and the loan file in Manhattan?
- The purchase agreement comes from the offering plan and is largely non-negotiable, though a purchaser can and should ask
- Warrantability turns on presale closings, sponsor holdings and commercial square footage, and early purchasers can face a narrower lender list
- Deposits are held in escrow under the plan and the Attorney General’s rules, and the escrow terms are worth reading before signing
- Closing dates move with construction, and the plan sets what happens when they do
Which taxes and recording steps apply in Manhattan?
- Manhattan sponsor plans routinely shift the New York State and New York City transfer taxes to the purchaser, which is the opposite of the resale custom
- That shift is itself additional consideration, which can move a deal across a mansion tax threshold it would otherwise sit under
- Mortgage recording tax applies to the recorded mortgage as on any condominium purchase
- The deed and mortgage record with the City Register through ACRIS once the unit is finally released for closing
What pattern does a purchaser meet in Manhattan?
- Manhattan plans commonly ask the purchaser to pay the sponsor’s attorney fee and the transfer taxes as well as ordinary buyer charges, so the closing figure is materially above a resale
- The first-year budget is a sponsor projection, and Manhattan amenity programs make the gap between projection and reality larger
- A temporary certificate of occupancy is normal at first closings, and the contract should deal with renewal and with final sign-off
- Punch-list and warranty obligations are stated in the plan, and what is not in the plan is not owed
Can you negotiate a Manhattan new development contract?
Less than on a resale, but not nothing. The purchase agreement comes from the offering plan and sponsors resist changing terms that would require amending the plan. Deposit protection, closing-date mechanics, punch-list handling and occasionally the transfer-tax allocation are where purchasers have obtained changes.
Who pays the transfer taxes in a Manhattan new development?
The offering plan usually places them on the purchaser, unlike an ordinary resale where the seller pays them. Because that payment counts as additional consideration to the sponsor, it can also increase the purchaser’s mansion tax exposure. It is one of the largest lines in a new development closing.
What else should you read before closing on one of these?
In the glossary
- Offering planThe sponsor's filed disclosure document for a co-op or condominium, carrying its budget, share or common interest allocation, building rules and sp...
- Transfer tax (RPTT and NYS)Taxes on the conveyance itself, one City and one State. Rates step up at higher prices, and who pays is set by custom and then confirmed by the con...
- Mansion taxA New York State tax paid by the buyer on residential conveyances of one million dollars or more, graduated upward through a series of higher price...
- TCO (Temporary Certificate of Occupancy)A Certificate of Occupancy issued for a limited period while construction is completed. Renewals are routine, but a lapse stops closings until the ...
- Escrow (at closing)Funds or documents held by a neutral party until stated conditions are satisfied. At a New York closing it usually means a holdback from proceeds u...
Questions this raises
- Who pays transfer tax on a sponsor sale?Sponsor sales usually shift the state and city transfer taxes to the purchaser, and the amount is grossed up. How the offering plan controls the al...
- What is a non-warrantable condo?A non-warrantable condo fails secondary market eligibility, so conventional financing is unavailable. What causes it and how buyers finance around it.
Building types
- 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.
- Sponsor resale condo unitAn unsold condominium unit the sponsor still owns years after the building opened, sold under the original offering plan rather than as an ordinary...
- Standard condoA New York City condominium unit: real property conveyed by deed, recorded in ACRIS, with an undivided interest in the common elements.
- Condo in a converted buildingA condominium created by converting an existing rental building, where non-purchasing tenants, the reserve fund and building-wide conditions carry ...
This building type, borough by borough
- New development condos in BrooklynBrooklyn carries the largest new development pipeline outside Manhattan, and its buildings turn on tax benefit schedules, presale counts and first-...
- New development condos in QueensQueens new development concentrates in Long Island City and Flushing, where investor demand and mixed-use ground floors shape both the budget and t...
- New development condos in the BronxBronx new development is concentrated in Mott Haven and Port Morris, in buildings small enough that a handful of closings decides whether anyone ca...
- Standard condos in ManhattanIn Manhattan the condominium is the minority structure, which is why condos there carry a price premium over comparable co-ops and why the approval...
- Sponsor resale condo units in ManhattanA sponsor unit still held in a finished Manhattan condominium is sold under the original offering plan, which is why the closing costs look nothing...
The statute itself
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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.