BY JOHN KIRITSIS, ESQ., CPA, MBA, MS, JD, LL.M
Selling a commercial condominium unit in New York City (NYC) involves a series of legal steps to ensure a smooth and legally compliant transaction. Here’s a guide for sellers to navigate the process:
- Consult Legal Counsel:
Engage an experienced NYC real estate attorney who specializes in commercial transactions. They can guide you through the legal requirements and help protect your interests throughout the sale.
- Review Condo Documents:
Thoroughly review the condominium’s governing documents, including the declaration, bylaws, and house rules. These documents might outline requirements, restrictions, and approval processes related to selling a unit.
- Due Diligence:
Buyers will conduct due diligence to evaluate the unit’s condition, financials, and legal status. Prepare documents such as financial statements, tax records, and any required approvals from the condo board.
- Obtain Lien Payoff Information:
Check with your lender to obtain the exact amount needed to pay off the mortgage or any liens on the unit. This information is crucial for accurate pricing and ensuring clear title transfer.
- Offer and Negotiation:
Negotiate the sale terms with the buyer. This includes the purchase price, closing date, and any contingencies.
- Purchase Agreement:
Work with your attorney to draft a purchase and sale agreement that outlines the terms of the transaction, including any contingencies, representations, warranties, and responsibilities of both parties.
- Due Diligence Period:
The buyer will typically have a due diligence period to inspect the unit, review documents, and confirm the information provided. Be prepared to provide any requested information during this time.
- Condo Approval:
In some cases, the condo association may have the right of first refusal or other approval requirements for the sale of a unit. Follow the procedures outlined in the condo’s governing documents.
- Title Search and Clearance:
The buyer’s attorney will conduct a title search to ensure there are no outstanding liens, judgments, or other encumbrances on the property. Any issues should be addressed and cleared before closing.
- Closing Documents:
Prepare the necessary closing documents, including the deed, bill of sale, and other required forms. These documents will be signed at the closing.
- Closing Process:
Coordinate with the buyer’s attorney, title company, and any other relevant parties to schedule and facilitate the closing. The closing will involve signing documents, transferring funds, and recording the deed.
- Post-Closing Matters:
After the closing, provide the buyer with any necessary keys, access information, and documentation related to the unit.
- Tax and Reporting Obligations:
Understand the tax implications of the sale and comply with any reporting requirements. Consult with a tax professional to ensure proper tax treatment.
- Transfer of Utilities and Services:
Notify utility providers and other service providers about the change of ownership to ensure a seamless transition for the buyer.
Selling a commercial condominium unit in NYC involves legal complexities, and each transaction can be unique. Consulting with legal professionals who specialize in NYC commercial real estate can help ensure that the sale is conducted in accordance with the law and protects your interests as a seller.
Citations, References and Potentially Useful Resources for Further Information:
U.S. Constitution
New York State Constitution
Federal Securities Regulation
New York State Martin Act
New York Condominium Act
New York State Security Regulations
New York Business Corporation Law
New York Limited Liability Company Law
New York Uniform Partnership Act
Federal Internal Revenue Code
New York State Tax Laws, Rules & Regulations
New York City Tax Laws, Rules & Regulations
Winston Churchill Owners, Inc. v. Regents Real Estate Associates
Board of Managers of the Park Regis Condominium v. Park Regis Owners Corp.
Park Sutton Condominium v. 447 E. 57th St. LLC
28 E. 10th Street Corp. v. Veras
Riverside Syndicate, Inc. v. Munroe
Essex House Condominium v. Marks
The Parc Vendome Condominium v. Atkinson
54-56 Meserole Street Owners Corp. v. Rossi
The Beekman Regent Condominium v. Bottiglieri
Chelsea 19th LLC v. West 19th Street Realty LLC
ACRIS
New York Department of Finance
New York City Department of Buildings
New York City Bar Association
New York State Bar Association
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