New York · Chapter 21 of 26

Condominiums and Cooperatives

How condos and co-ops differ, sponsors and offering plans under the Martin Act, letters of intent and CPS-1, price changes and amendments, certificates of occupancy, closing costs and taxes, co-op documents, board packages and interviews, financing with recognition agreements, subletting, flip taxes and the condop and 80/20 rule.

40-minute read · Built for the Salesperson Exam

condominium (real property, fee ownership of unit)declaration and bylawscommon elements and common interestcommon chargesboard of managersright of first refusalsponsor and sponsor controloffering plan (GBL §352-e, Martin Act)Attorney General filingCPS-1 and letters of intentamendments and price changescertificate of occupancycooperative (shares + proprietary lease)maintenanceboard package and interviewshare loan and recognition agreementUCC lien searchflip taxsublet policyholder of unsold sharescondop80/20 rule

Condominiums Defined

A condominium is real property. Each owner holds fee title to an individual unit plus an undivided percentage interest (the common interest) in the common elements, such as the land, lobby, roof, hallways and building systems. The condominium is created by recording a declaration under the New York Condominium Act (Real Property Law Article 9-B); the bylaws govern operations, and an elected board of managers runs the condominium. Each unit is a separate tax lot with its own real estate tax bill, and each owner may obtain a separate mortgage. Owners pay monthly common charges for their share of common expenses, and unpaid common charges become a lien on the unit (subordinate to real property taxes and a recorded first mortgage). Condo bylaws often give the board a right of first refusal when a unit is sold: the board may match the offer within a set period or waive the right, but it cannot simply reject a buyer the way a co-op board can.

N.Y. Real Prop. Law Art. 9-B (§§339-d to 339-kk); §§339-y, 339-z

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