Condo purchase closing checklist

What are the steps, in order?

1. Read the declaration, the bylaws and the offering plan. The declaration defines the unit boundary and the common element percentage. The bylaws set alteration, sublet and pet rules. Read both against what you actually intend to do with the apartment before you sign the contract.Before contract
2. Request the resale package from the managing agent. Ask for the current financials, the reserve level, any assessment in effect or contemplated, the insurance certificate, and whether the building is in litigation. Assessments and litigation both affect financing as well as price.Before contract
3. Confirm the unit has its own tax lot in ACRIS. Every condominium unit has a separate tax lot and its own BBL, which is what makes it separately conveyable, separately taxed and separately mortgageable. Confirm the unit’s lot and any storage or parking unit conveyed with it, because they are frequently separate lots.Week 1 after contract
4. Order the title report and the municipal searches. A condo title search covers the chain into the unit, the declaration and its amendments, and liens docketed against the unit owner. Common charge liens filed under Real Property Law section 339-z show in the search and must be resolved before closing.Weeks 1 to 3
5. Obtain the waiver of the right of first refusal. Most New York condominium bylaws give the board a right of first refusal or a right to purchase on the same terms. The board must waive it in writing before the unit can be conveyed, and the waiver is a title requirement, not a formality.Weeks 2 to 6
6. Get the common charge and assessment arrears letter. The managing agent’s letter states common charges paid through a date, any open assessment, and any lien filed against the unit. Unpaid common charges attach to the unit, so the letter is the document that proves you are not inheriting them.2 weeks before closing
7. Budget the recording taxes and the transfer taxes. Unlike a co-op, a financed condo purchase carries mortgage recording tax, because the mortgage is actually recorded. State and City transfer taxes apply, and the mansion tax applies at the statutory threshold. Whether a purchase CEMA is available depends on the seller’s cooperation.2 weeks before closing
8. Reconcile the Closing Disclosure and confirm the wire. Review the Closing Disclosure at least three business days before signing, reconcile it to the settlement statement, then verify wire instructions by telephone at a number you already had. Read the account details back rather than comparing them on screen.3 days before closing
9. Walk the unit and check the common elements. Walk through the unit with the contract’s fixture list, and look at the common elements you are buying a percentage of: roof, facade scaffolding, elevator condition. Ongoing facade work is a future assessment whether or not it has been voted.Closing day
10. Confirm the deed, the mortgage and the policy. After closing, confirm in ACRIS that the deed and mortgage recorded against the unit’s own lot, that the transfer tax returns were accepted, and that the owner’s policy issued in the correct amount with the exceptions you agreed to.Weeks after closing

Which documents do you need?

• Contract of sale, with the declaration, bylaws, offering plan and current financial statements
• Bargain and sale deed conveying the unit and its undivided common element interest
• Board waiver of the right of first refusal
• Common charge and assessment arrears letter from the managing agent
• Power of attorney from the board where the bylaws require the board to execute the waiver
• Owner’s policy and lender’s policy on the unit, issued simultaneously
• Note and mortgage, recorded against the unit’s tax lot
• TP-584, RP-5217NYC and the NYC transfer tax return
• Mortgage recording tax affidavit, and the CEMA package if the seller’s mortgage is being assigned
• Insurance certificate showing the unit is covered by the building’s master policy
• Closing Disclosure and the reconciled settlement statement

Which searches does this transaction call for?

• Title search on the unit, including the declaration and every recorded amendment
• Common charge lien search under Real Property Law section 339-z
• Judgment, federal tax lien and bankruptcy searches against the unit owner
• Tax search on the unit’s own BBL, including any storage or parking lot conveyed with it
• DOB and OATH (formerly ECB) violation search against the building and against the unit
• HPD search where the building contains rental units
• DEP water and sewer search on the condominium
• Patriot search against all parties
• Open permit search covering alterations inside the unit as well as building-wide work

What else should you read before closing?