Building types in Brooklyn
Standard condos in Brooklyn
Brooklyn is where most of the city’s new condominium stock has been built, so tax abatements, first-year budgets and sponsor obligations dominate the review.
What is different about buying a standard condo in Brooklyn?
Quick Answer
Brooklyn is where most of the city’s newer condominium stock has been built, so a Brooklyn condo review usually turns on two documents rather than one: the building’s tax benefit schedule, which sets when property taxes step up, and the first-year common charge budget, which is frequently understated.
Which condominiums of this kind are actually in Brooklyn?
- New construction through Downtown Brooklyn, Williamsburg, Greenpoint, Gowanus and along the Fourth Avenue corridor
- Mid-size buildings across Bedford-Stuyvesant, Crown Heights and Bushwick built over the last two decades
- Loft and warehouse conversions in DUMBO and along the Williamsburg waterfront declared as condominiums
- Small buildings of six to twenty units where there is no on-site staff and the board is the owners
What changes about the waiver and the loan file in Brooklyn?
- The approval step is a right of first refusal waiver from the board, and the timing of that waiver is what usually sets the closing date
- Warrantability turns on sponsor holdings, owner-occupancy and the presale percentage in a newer building, and a lender may decline the building rather than the borrower
- Where the building holds a tax benefit, a prudent lender, and a prudent purchaser, qualifies against the taxes at the end of the schedule rather than the figure today
- A recorded mortgage means mortgage recording tax, and on a refinance a CEMA is available to reduce the tax on the assigned balance
Which taxes and recording steps apply in Brooklyn?
- Mortgage recording tax applies to the recorded mortgage, and the deed and mortgage record with the City Register through ACRIS
- Many newer Brooklyn buildings carry a construction-related tax benefit that steps down over years, and the step-down is a scheduled increase in carrying cost
- New York State transfer tax and the New York City real property transfer tax apply, and in a sponsor sale the plan commonly shifts them to the purchaser
- The mansion tax is reached on a meaningful share of Brooklyn condo sales, concentrated in the newer waterfront and downtown stock
What pattern does a purchaser meet in Brooklyn?
- First-year common charge budgets in new Brooklyn buildings are frequently understated, and the second-year budget is the honest one
- Where a tax benefit is in place, ask for the schedule and model the carrying cost at the end of it rather than at the start
- Small buildings without on-site staff have no reserve study and no professional management, so the offering plan and the first budget are all there is
- Gowanus and waterfront sites carry environmental history, and the offering plan should disclose remediation and any ongoing obligations
Why does a Brooklyn condo tax benefit matter so much?
Because it is temporary and it steps down on a published schedule. A unit whose taxes are reduced today will carry full taxes later, and the increase arrives whether or not anything else changes. Model the carrying cost at the end of the schedule, and ask the lender to qualify you on that figure.
Are first-year common charges in new Brooklyn buildings reliable?
Often not. The sponsor prepares the first budget, and it tends to assume favorable staffing, insurance and utility figures. The second-year budget, set by an owner-controlled board with a year of actual costs, is usually higher. Treat the first-year figure as a projection rather than as an operating cost.
What else should you read before closing on one of these?
In the glossary
- 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 ...
- 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...
- Mortgage recording taxThe New York tax due when a mortgage is recorded, computed on the new money secured. On a building with six or fewer apartments the lender pays 0.2...
- CEMA (Consolidation, Extension and Modification Agreement)An agreement in which an existing mortgage is assigned and consolidated with new financing rather than being satisfied and re-recorded. It requires...
- 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...
Questions this raises
- What is the difference between common charges and maintenance?Condo common charges fund operations only, with taxes billed separately. Co-op maintenance bundles operations, property taxes and the underlying mo...
- Can you do a CEMA on a condo refinance?A condo refinance can use a CEMA because the loan is a recorded mortgage. How the assignment works, what it saves, and which lenders decline to coo...
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.
- 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 ...
- 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 ...
This building type, borough by borough
- 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...
- Standard condos in QueensQueens condo stock concentrates in Long Island City, Astoria and Flushing, and the investor share of that stock is what shapes financing and buildi...
- Standard condos in the BronxThe Bronx holds one of the largest condominium communities in the city alongside a newer wave of small buildings in Mott Haven and Port Morris.
- Standard condos on Staten IslandStaten Island condominiums are mostly attached townhouse communities, and the borough is the one place in the city where deeds are filed with the c...
- 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-...
- Standard co-ops in BrooklynBrooklyn co-ops split into two very different populations: small self-managed brownstone corporations, and the very large post-war complexes along ...
The statute itself
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