Building types in Manhattan
Sponsor resale condo units in Manhattan
A sponsor unit still held in a finished Manhattan condominium is sold under the original offering plan, which is why the closing costs look nothing like a resale.
What is different about buying a sponsor resale condo unit in Manhattan?
Quick Answer
A sponsor unit in a finished Manhattan condominium is still sold under the original offering plan rather than under the ordinary resale custom. The plan shifts the transfer taxes and the sponsor’s legal fee to the purchaser, and it also carries whatever construction warranty obligations the sponsor still owes.
Which condominiums of this kind are actually in Manhattan?
- Unsold units held by sponsors in buildings completed over the last two decades across Midtown, Chelsea and the Financial District
- Units held back as rentals during a slow sales period and released later
- Positions acquired by successor entities from an original sponsor
- Buildings where the remaining sponsor holding is large enough to affect warrantability
What changes about the waiver and the loan file in Manhattan?
- The board’s right of first refusal still applies, and the waiver is still the approval step
- A large remaining sponsor holding is a warrantability input, and it can narrow the lender list for the whole building
- Where the unit has been rented, the purchaser should establish whether it is delivered vacant and what the tenancy status is
- The lender will want the offering plan and its amendments in the file, not only the contract
Which taxes and recording steps apply in Manhattan?
- The plan commonly shifts the New York State and New York City transfer taxes to the purchaser, unlike an ordinary Manhattan resale
- That shift counts as additional consideration, which can raise mansion tax exposure on a borderline deal
- Mortgage recording tax applies to the recorded mortgage, and the deed and mortgage record with the City Register through ACRIS
- The purchaser also commonly pays the sponsor’s attorney fee under the plan, which a resale would not include
What pattern does a purchaser meet in Manhattan?
- Read the plan and every amendment: the sponsor’s continuing obligations, the cost allocation and the delivery condition are all there
- A unit that has been rented for years is delivered in rental condition, and the plan’s construction warranty may long since have expired
- Where the sponsor is in arrears on common charges, the condominium’s financials will show it and the purchaser inherits the building, not the arrears
- The closing figure on a sponsor unit is materially higher than on a resale at the same price, and the difference should be modelled before offer
Is a Manhattan sponsor condo unit cheaper than a resale?
Not once the closing costs are counted. The plan typically puts the state and city transfer taxes and the sponsor’s attorney fee on the purchaser, which an ordinary resale would not. A price that looks like a discount can be neutral or worse after those lines are added, so model them before making an offer.
Does a sponsor unit still carry a construction warranty?
Only if the plan’s warranty period has not run. In a building completed years ago the sponsor’s construction obligations may have expired, so a purchaser buying a long-held sponsor unit is buying the condition it is in. The plan states the period, and the amendments state what has changed.
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...
- Right of first refusalThe right to match an offer before a sale closes. In condominiums it is exercised or waived by the board, and the written waiver is delivered at cl...
- Common chargesThe recurring charge a condominium levies on each unit for building operations and reserves. Real estate taxes are billed to the unit directly and ...
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...
- Can a condo board block a sale in New York?A condo board holds a right of first refusal, not an approval right, so it rarely stops a sale. What it can do is delay one by withholding the waiver.
Building types
- 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...
- 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.
- Standard condoA New York City condominium unit: real property conveyed by deed, recorded in ACRIS, with an undivided interest in the common elements.
- Sponsor co-op unitAn unsold share allocation still held by the building’s original sponsor, sold under the offering plan rather than through the ordinary board process.
This building type, borough by borough
- Sponsor resale condo units in BrooklynBrooklyn sponsor units frequently sit in small buildings where the sponsor still controls the board, the budget and the pace of the punch list.
- Sponsor resale condo units in QueensQueens sponsor units are often held as rentals in investor-heavy buildings, which makes the delivery condition and the tenancy the first questions.
- Sponsor co-op units in ManhattanManhattan’s 1980s conversion wave left sponsors holding unsold shares, and buying one means no board approval but a different tax and occupancy pic...
- New development condos in ManhattanA Manhattan new development purchase is governed by the sponsor’s offering plan, and the plan is written by the sponsor for the sponsor.
- 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...
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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.