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The condominium offering plan is a prerequisite for the public offering or sales of condominiums under section 352-e of the General Business Law and must be filed with and approved by the Department of Law. The Department of Law is authorized to issue and enforce rules and regulations pertaining to the offering process.  

The first in a series that will explore the new residential condominium offering process in New York, this article serves as a general introduction to condominium offering plans.

Sponsor Role and Offering Plan Purpose

The sponsor, who is responsible for offering interests in the condominium development, assumes a pivotal role in the entire process, from condominium development to management. The purpose of the offering plan is to ensure that sponsors provide vital information to safeguard the interests of prospective buyers in their decision-making process.  

Condominium Ownership Structure

As compared to more traditional forms of real estate properties, where an owner owns the entire building and its land parcel, owners of condominiums have a specific unit within the building and share common areas with fellow unit owners. Granted, because this unique arrangement involves multiple stakeholders, it can potentially lead to disputes if terms are not delineated. Additionally, issues may also surface between unit owners and sponsors, even after closing, due to ongoing sponsor obligations. These dynamics highlight the importance of the offering plan.

Rights & Obligations of Unit Owners

Within the framework of the offering plan, each unit owner shares rights and obligations according to their allocated percentage of common interest. In this case, the rights dictate usage parameters — whether exclusive or shared with others — while obligations include monthly common charges for one’s unit and maintenance fees for shared spaces. Additional information on rights and obligations are outlined in the declaration, bylaws, and rules and regulations of the condominium.

Offering Plan as Blueprint for Development

Beyond disclosure requirements, the offering plan provides a blueprint for the entire condominium development, including the material specifications of the building and each individual unit.  Other important information may include projections based on professional opinions of anticipated monthly expenses, as well as financial details for the first-year operating budget of the condominium, which help determine the common charges an owner must pay based on their ownership percentage of the common interest. 

Understanding Condominium Offering Plans

While the condominium offering plan may seem daunting at first, understanding its overall purpose and sections assists immensely in the review process. The offering plan contains two parts, which will be discussed in the next article, to be released in early June 2024.

About

John Pak

John Pak serves as the Real Estate Chair at the Law Offices of Pardalis & Nohavicka. He is a transactional attorney specializing in acquisitions, dispositions and leasing.  A graduate of Brooklyn Law School, he received his BA in Political Science from New York University.  Prior to joining PN Lawyers, John owned his own private law practice for 15 years and a title company for 6 years.
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Taso Pardilis

Taso Pardalis is a founding partner of the Law Offices of Pardalis & Nohavicka, a leading full- service NYC law firm with offices in Manhattan, Queens and WeWork. Taso may be a well-known attorney with many cases making headlines in major media outlets, but at heart, he is a true entrepreneur that believes in supporting the small business community. His areas of concentration are: Intellectual Property, Trademarks, Corporate, Business Law and Real Estate Law.

Disclaimer

This article is intended for educational and information purposes only and should not be construed as legal or investment advice.

Eliza Theiss

Eliza Theiss

Eliza Theiss is a senior writer reporting real estate trends in the US. Her work has been cited by CBS News, Curbed, The Los Angeles Times, and Forbes among others. With an academic background in journalism, Eliza has been covering real estate since 2012. Before joining PropertyShark, Eliza was an associate editor at Multi-Housing News and Commercial Property Executive. Eliza writes for both PropertyShark and CommercialEdge. Reach her at [email protected]