FREQUENTLY ASKED QUESTIONS ABOUT CONDOS

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What is a condo?
What is a "right of first refusal"?
What should I expect as closing costs?
What should I expect my attorney to do for me?
How much do you charge?

What is a condo?

A condominium apartment is a parcel of real property in "space." That is to say it doesn't necessarily have to sit on the ground. The owner of a condo apartment receives a deed to his/her property, pays real estate taxes and if the purchase is financed, has a mortgage or his/her property. It is for all intents and purposes a single family home. Additionally, the condo owner acquires an interest in the building's common elements such as the lobby, hallways, elevators, etc. Unlike a co-op corporation, the condominium association owns none of the real estate, but manages the property for the owners. The condominium association will collect a monthly "common charge" which includes your portion of the cost of the upkeep, fuel and labor to operate your building.

What is a "right of first refusal"?

Sales and leases of condo units are typically only subject to the condominium association's right of first refusal to assume the terms as buyer of any contract of sale, and the terms as tenant of any lease offered to it. This is made as a formal offer to the condominium association and submitted as part of the buyer or tenant's application for a "waiver of the right of first refusal." Only under very limited circumstances does a condominium association exercise its right of first refusal.

What should I expect as closing costs?

Your closing costs will vary, depending on whether you are buying or selling a condo. For a printable chart of estimated closing costs, click here.

If your are buying your condo, you may be responsible for the following:

• Lender costs, which will vary depending on the lender and the particular "products" your lender offers. Your lender is required to give you a "good faith estimate" after you submit your application.

• "Mansion Tax" of one percent of the purchase price imposed by New York State on purchasers of residential properties whose purchase price exceeds one million dollars.

• Title Insurance: Whether you are financing your purchase or not, a prudent buyer will always wish to obtain title insurance. If you are financing your purchases, your lender will require that you obtain a policy insuring the binding lien of their mortgage. The rate structure for title insurance (which is set by New York State law) provides a substantial discount for the simultaneous purchase of an owner's policy along with a lender's policy. The lender's good faith estimate will disclose the approximate amount of the title insurance premiums. There will also be charges for the title research and recording charges with a range of costs between $500 and $1,000.

• Condo Association/management costs, which include the following:

  • application review and credit check - typically $400.00,

  • a mortgage recording tax of 2.05 percent (in New York City) below $500,000 mortgage and 2.175 (in New York City) over $500,000. Your lender will be required to pay .25 percent of this tax.

  • a move-in fee and a move-in deposit of $250 - $500 each.

If you are selling your condo, you will be responsible for the following taxes:

• New York City Real Property Transfer Tax of one percent of a sale price below $500,000 and 1.425 percent of a sale price above $500,000 plus a $50 filing fee.

• The New York State Real Estate Transfer Tax is $2 per each $500 or portion therefore of sales price.

• Sellers who are not New York State residents must pay estimated New York income tax of 6.85 percent of your net profit.

• Condo Association/management costs, which include the following:

  • a move-out fee and a move out-deposit of $250 - $500 each, and

  • any outstanding charges that you may owe the condominium association.

There may be other costs associated with your transaction, so it is important that you make me aware of all the terms of your particular transaction.

What should I expect my attorney to do for me?

If you are selling your condo, I will assemble all of the appropriate information necessary to draft your contract of sale. I will work with the buyer's title insurance company to clear title and arrange the payoff of any mortgage you have on your condo.

If you are purchasing a condo, I will thoroughly investigate and advise you of the finances, potential repairs, improvements and the policies of the condominium association before a contract of sale is executed. You can expect that if I am permitted, I will personally visit the offices of the condo association's managing agent to examine their records.  I will arrange for a report on the seller's title and for title insurance for you and if necessary, your lender. I will negotiate your contract of sale with the seller's attorney.

For buyers and seller, I will coordinate the timing of the closing, which will occur at the offices of either the condo association's management firm, or its attorney. During the closing, I will explain the dozens of documents you will have to sign, including transfer documents, tax forms, and, if you are financing your condo purchase, your lender's loan documents. After the closing, I will provide you with a comprehensive closing statement of the transaction.

How much do you charge?

For transactions below $750,000, my fee ranges from $1,750 to $1,900.

For transactions between $750,000 and $1,000,000, my fee ranges from $1,900 to $2,500.

For transactions between $1,000,000 and $1,500,000, my fee ranges from $2,500 to $3,000.

For transactions above $1,500,000, my fee is dependant on the nature of the transaction and the time expended.

For loan/mortgage re-financing, my fee is $800.

The range of fees referred to above are determined during my initial consultation. During the course of your matter, I may determine that certain circumstances exist which may increase the amount of time required for your matter. In that event, my fee may be higher. Any such excess will be billed at my usual rate of $450/hour.

Fifty percent of the anticipated fee is due and payable upon retaining my services, with the balance due at closing. The initial fifty percent retainer may or may not be refundable, depending on the amount of work done prior to an early termination of the transaction, but I will do my best not to waste your money if I believe that any work is premature.

Fred E. Rosenberg, Esq.

Telephone: 212-939-7287    FAX: 212-531-6134

Postal address: 57 West 38th Street - 9th floor - New York, NY 10018

Click here to send an email to Fred E. Rosenberg, Esq.

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