Closings glossary
Offering plan
The sponsor's filed disclosure document for a co-op or condominium, carrying its budget, share or common interest allocation, building rules and sponsor commitments.
What is an offering plan for a co-op or condo?
Quick Answer
The full definition
The sponsor's filed disclosure document for a co-op or condominium, carrying its budget, share or common interest allocation, building rules and sponsor commitments.
Also called: Prospectus, Offering plan amendment.
Which related terms should you know?
These are the terms that come up alongside offering plan in the same file.
- Proprietary lease
- The occupancy lease a co-op corporation grants a shareholder for a specific unit. It is assigned at closing together with the stock certificate for the allocated shares, and its amendments, rather than the original text, carry the building's current rules.
- Common charges
- The recurring charge a condominium levies on each unit for building operations and reserves. Real estate taxes are billed to the unit directly and are not part of the figure.
- Maintenance (co-op)
- The monthly charge a co-op levies on each shareholder, covering building operations plus that shareholder's share of real estate taxes and the underlying mortgage.
- Right of first refusal
- The 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 closing.
- Land lease
- A building whose land is leased rather than owned. The lease term and rent reset schedule sit in the offering plan and shape much of what the apartments are worth.
Where does offering plan come up in a New York City closing?
A buyer in a converted Harlem building reads the offering plan and its eleven amendments to see what the sponsor still owns and still owes.
What else should you read before closing?
Questions this raises
- What is a sponsor unit in a co-op?A sponsor unit is an unsold apartment still held by the converter. How the offering plan changes board approval, transfer taxes and the condition o...
- Do sponsor units skip board approval?Sponsor sales of unsold co-op shares usually avoid board consent under the offering plan. What the purchaser still files, and what the board still ...
- What documents do I sign at closing?Note, mortgage, title affidavit, settlement statement and transfer tax returns for buyers; deed and releases for sellers. What each document actual...
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 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.
- 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...
- 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 ...
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