Buying a condominium in New York City is fundamentally different from buying real estate almost anywhere else in the country. The documents are longer, the costs are higher, and the legal traps are less obvious. Buyers who come to the table without understanding what they are actually signing up for frequently discover expensive surprises after it is too late to walk away.
This guide covers the legal issues that matter most in a New York City condo purchase — from reading the offering plan to understanding what happens when a building has a pending lawsuit. If you are also considering a co-op, we have a separate guide on that process: Complete Guide to Buying a Co-op in NYC.
Condo vs. Co-op: Why the Distinction Matters
When you purchase a condominium in New York City, you are buying real property. You receive a deed, you hold title to your unit, and you own a proportionate share of the building's common elements. This is categorically different from a co-op purchase, where you acquire shares in a corporation and receive a proprietary lease rather than actual real estate.
The condo structure gives buyers several practical advantages. There is no board approval process — the condo board has only a right of first refusal, which it almost never exercises. You can typically sublet your unit more freely, and condo units are generally easier to finance because lenders are making a mortgage on actual real property rather than a collateral assignment of shares. International buyers and investors tend to prefer condos for exactly these reasons.
That said, condo ownership comes with its own obligations and risks, many of which are buried in documents that most buyers do not read carefully enough. The sections below walk through each of the major legal pressure points.
The Offering Plan: The Most Important Document You Will Not Read Enough
Every condominium in New York State is governed by an offering plan filed with the New York State Attorney General's office under the Martin Act. This document — which can run into the hundreds of pages — is the legal foundation of the entire development. It describes the physical construction of the building, the financial structure of the condominium association, the rights and obligations of unit owners, and any known defects or issues at the time of filing.
For new construction, the offering plan contains the sponsor's representations about what is being built, including unit sizes, finishes, amenities, and common area specifications. Critically, the offering plan — not the marketing brochure, not the model unit, not the salesperson's verbal promises — is the controlling legal document. If something is not in the offering plan, you generally cannot hold the sponsor to it.
For resale units in existing buildings, buyers need to review the most current version of the offering plan along with any amendments that have been filed since the original. Buildings with older offering plans may have undergone significant changes that are only reflected in subsequent filings. Your attorney should obtain and review the complete offering plan and all amendments before you sign the purchase contract.
Pay particular attention to the sections covering the sponsor's obligations, the budget for the first year of operation, the common charge projections, and any disclosures of known physical defects. First-year budgets in new developments are frequently set artificially low to attract buyers, with common charges rising substantially in year two once the sponsor transitions control to the unit owner board.
The Purchase Contract: What You Are Actually Agreeing To
In a condo resale, the purchase contract is negotiated between the buyer and seller, and there is more room to customize terms than in a new development sale. In a new construction purchase, the sponsor's contract is largely non-negotiable — the sponsor has typically sold dozens or hundreds of units on the same form and is not going to change it for you. Understanding what is in that form matters.
Several contract provisions deserve close attention. The closing date in a new construction contract is almost always approximate, tied to the sponsor obtaining a temporary certificate of occupancy. Delays of six months to a year or more are common, and the contract typically gives the sponsor the right to extend without penalty. Make sure you understand what happens to your deposit if the project is delayed significantly or, in a worst case, never completes.
Deposit protection is a critical issue. Under New York law, deposits on new condominium purchases are generally held in escrow, but the specific terms matter. Confirm that your deposit will be held in an interest-bearing escrow account and that you will receive the interest at closing. Also understand the conditions under which you can get your deposit back — the right to rescind typically exists for a limited window after you receive the offering plan, after which your deposit is at risk if you back out.
In resales, pay attention to the representations and warranties the seller is making about the condition of the unit and the building, what personal property is included in the sale, and the specific closing date and extension rights. Your attorney will negotiate these terms on your behalf.
Common Charges and What Drives Them Up
Common charges are the monthly fees paid by all unit owners to fund the operation and maintenance of the building. Unlike a co-op's maintenance fee, a condo's common charges do not include property taxes — you pay those separately as a unit owner with your own tax bill. Common charges cover building staff, insurance, utilities for common areas, management fees, routine maintenance, and contributions to the reserve fund.
Buyers should review the building's current common charge schedule and understand what is driving the amount. More importantly, look at the history of common charge increases. A building that has increased common charges by 8 to 10 percent annually for several consecutive years is a signal worth investigating. Ask for the most recent audited financial statements and the current budget. Your attorney can help you interpret what you find.
The reserve fund deserves particular attention. A well-run building maintains a healthy reserve fund to cover major capital expenditures — roof replacements, facade repairs, elevator modernizations, HVAC system overhauls — without having to levy special assessments against unit owners. A depleted reserve fund in a building with aging infrastructure is a warning sign that significant assessments may be coming.
Special Assessments: The Surprise Bill That Can Cost Tens of Thousands
A special assessment is a one-time charge levied against all unit owners to fund a capital project or cover an unexpected expense that the reserve fund cannot absorb. Special assessments are entirely legal, and in a building with deferred maintenance or low reserves, they are nearly inevitable.
Before you close, ask whether the building has any pending or anticipated special assessments. The seller is required to disclose known assessments, but not all sellers are forthcoming about assessments that are in discussion but not yet formally approved. Your attorney should review the minutes of recent condominium board meetings, which will often reveal assessments that are being discussed before they are officially voted on. Board minutes are typically available to buyers as part of the due diligence process.
Special assessments in New York City can be substantial. A large facade repair project, a Local Law 11 compliance project, or a major infrastructure upgrade in a mid-size Manhattan building can produce assessments of $20,000 to $100,000 or more per unit. This is not hypothetical — it happens regularly, and buyers who do not do their homework inherit the obligation.
Local Law 97 and the Cost of Building Emissions Compliance
New York City's Local Law 97, part of the Climate Mobilization Act, requires most buildings over 25,000 square feet to meet increasingly strict carbon emissions limits or face substantial annual fines. The first compliance year for many covered buildings is 2026, with caps tightening again in 2030. Buildings that cannot meet the limits through efficiency improvements will either pay penalties or undertake expensive capital projects — electrification, heat pump installations, insulation upgrades, and related work — all of which are funded through common charges and special assessments.
If you are purchasing a condo in a building covered by Local Law 97, ask whether the building is in compliance and, if not, what the board's plan is. A building that is significantly over its emissions limit with no clear compliance roadmap represents real financial exposure for unit owners in the form of ongoing fines or large future assessments to fund the necessary upgrades. Your attorney can help you request this information from the seller and the building's management.
Building Litigation: When the Association Is a Party to a Lawsuit
Condominium associations can be involved in litigation as either plaintiffs or defendants. Construction defect cases against developers are common in newer buildings — the association sues the sponsor for defects that were not disclosed or were not repaired before the sponsor turned the building over to unit owner control. The building might also be defending against a lawsuit brought by an injured party, a contractor, or a neighboring property owner.
Active litigation has several implications for buyers. On the upside, a construction defect recovery could result in funds flowing back into the reserve — a benefit to incoming unit owners. On the downside, ongoing litigation creates uncertainty and can affect the building's insurance coverage, its ability to get financing for capital projects, and in some cases its ability to obtain financing for individual unit purchases.
Ask the seller and the management company directly whether the association is involved in any current or pending litigation. Review the board meeting minutes for any references to legal proceedings. Your attorney can also send a formal inquiry to the building's managing agent requesting disclosure of any known or anticipated litigation as part of the due diligence process.
Title Review and the Mortgage Recording Tax
Because a condo purchase involves the transfer of real property, title insurance is a standard and important part of the transaction. Your lender will require a lender's title insurance policy, and your attorney will strongly recommend that you also purchase an owner's title policy. Owner's title insurance protects you against defects in title that existed before you purchased — prior liens, judgments, unpaid taxes, errors in prior conveyances — that might surface after closing.
In addition to title insurance, condo buyers who finance their purchase pay the New York City and New York State mortgage recording tax, which is one of the larger closing costs unique to condo purchases. For residential mortgages, the combined rate is 1.8 percent on loan amounts under $500,000 and 1.925 percent on loan amounts of $500,000 or more. On a $1 million mortgage, this is $19,250 — a significant cost that co-op buyers do not face because co-op financing does not involve a traditional mortgage on real property.
Closing Costs: What to Budget Beyond the Purchase Price
Closing costs on a New York City condo purchase are substantial and vary depending on whether you are buying a new development or a resale, and whether you are financing the purchase. For a resale purchase with financing, total closing costs typically range from 3 to 4 percent of the purchase price. For a new development purchase, costs can approach 5 to 6 percent because the transfer taxes — normally a seller's obligation — are almost always shifted to the buyer in the sponsor's contract.
The principal closing costs include the mortgage recording tax (discussed above), title insurance premiums for both the lender's policy and your owner's policy, attorney's fees, a mansion tax if the purchase price is $1 million or more (1 percent of the purchase price, rising in tiers for purchases over $2 million), New York City and State transfer taxes if shifted to you in a new development contract, and building-specific fees such as move-in deposits and working capital contributions to the condominium association. Working capital contributions in new developments can equal two to three months of common charges, payable at closing.
Budget these costs carefully before you sign anything. Buyers who are surprised by closing costs at the end of a transaction sometimes find themselves in a difficult position if they did not plan adequately.
Subletting, Investors, and House Rules
One of the primary advantages of a condo over a co-op is the relative freedom to sublet. Condo bylaws generally cannot prohibit subletting outright the way co-op boards can. However, that does not mean there are no restrictions. Many condominium offering plans and bylaws include provisions requiring unit owners to notify the board before subletting, limiting the number of consecutive sublet terms, or giving the board a right of first refusal to lease the unit before you can rent it to a third party.
Review the building's house rules and bylaws carefully before you purchase, particularly if you intend to rent the unit rather than occupy it as a primary residence. Short-term rental restrictions are now common — many buildings have adopted provisions restricting rentals of less than 30 days to comply with New York City's Local Law 18, which substantially restricts short-term rentals. If Airbnb income is part of your investment thesis, make sure the building actually permits it.
New Construction-Specific Issues
Buying into a new development adds a layer of complexity that resale purchases do not involve. The building may not be complete when you sign the contract, and you are making a significant financial commitment based on plans, renderings, and representations rather than the finished product. Several issues arise frequently in this context.
Construction delays are the norm rather than the exception. The sponsor's contract will give them broad rights to extend the closing date, sometimes with only limited notice requirements. Understand your rights if the closing is delayed by a year or more — in some circumstances, buyers can rescind and recover their deposit, but the specific terms of your contract control.
Unit size discrepancies are another common issue. New York law measures unit square footage by a specific method that often produces numbers smaller than what the marketing materials suggest. Read the offering plan's description of your unit carefully and compare it to what is being represented in the sales process. If there is a significant discrepancy, address it before you sign.
Finally, the sponsor retains unsold units after the building opens. In the early years of a new development, the sponsor may still own a significant percentage of the units and control the board. This can create conflicts of interest — the sponsor has an incentive to keep common charges low to make remaining units easier to sell, even if the building's actual operating costs support a higher budget. Ask how many units the sponsor currently owns, and understand how that affects governance.
When to Involve a Real Estate Attorney
New York State requires that attorneys be involved in residential real estate closings, which means you will have an attorney regardless. The more important question is when to bring one in. Many buyers engage an attorney only after they have already signed a term sheet or accepted an offer, which works for resales. For new development purchases, you should involve an attorney before you sign anything — the sponsor's contract and the offering plan both require careful review before you are committed.
An experienced real estate attorney will review the offering plan, negotiate the purchase contract, conduct due diligence on the building's financial health and litigation history, obtain the necessary title search and insurance, coordinate the closing, and ensure that all adjustments and credits are properly calculated. Attorney's fees for a condo purchase in New York City typically range from $2,500 to $5,000 or more depending on the complexity of the transaction, which is a small fraction of what you are spending and the potential problems you are avoiding.
Agarunov Law Firm represents condo buyers across New York City, from first-time purchasers navigating new development contracts to experienced investors acquiring units in established buildings. We offer free initial consultations to help you understand the process before you commit to anything. Call (212) 920-5989 or visit our contact page to schedule. You can also read more about our real estate legal services for additional guidance on New York City property transactions.