Newbie Buying New Condo In NYC As Primary Residence, Need Help!

[Mark K.]

Hello,

I posted this in the general sales forum initially and I realized it's a very locally based NYC question so I am reposting here!

Anyways, I've got an accepted offer and financing lined up and now have received the offering plan (400+ pages). To give you some background, I am the first person to buy into a new 8 unit condo-building in Brooklyn. This is my first time buying and everything up to this point was fairly straight forward. I figured I just sign the purchase agreement and move in move in by April (what listing agent told me).

Of course, it's never that simple, especially in NYC. Long story short, there are two issues that are making me reconsider.

- Sponsor has yet to receive Temporary Certificate of Occupancy and in turn the Offering Plan has not been declared effective. They cannot get TCoO until 2 units are sold, I would be the first person to buy in. This means closing could potentially be months away while another buyer goes into contract. Awaiting word from sponsor on how long this will actually be but how would they know? They'd need another offer to come through on another unit right?

- 421A contingency based off final Certification of Eligibility. The building has 421A but the FINAL certification won't come through (if at all) until 90 days after the TCoO. The sponsor has received preliminary approval but not yet final which is not guaranteed. Is there a way to get a sense of whether or not the building will get the FINAL certification?  I went on NYC gov page and the property is listed as an "Exempt Property as of Final Roll FY'18/19".  That doesn't necessarily mean it's getting a FINAL certification though right?

So I'm in a position where closing is open ended and the tax abatement is uncertain. I really want this place but am not going to do anything stupid. Is all this normal for a new development? Is this more of a thing where I just need to give it time (to close)? I have done research on the developer and his other buildings and everything seems to check out. Since this is my first time, I am being particularly cautious.

I just wanted to get a second opinion from the community at large. Your help is appreciated!

[Jason Lee]

I don't recall seeing a new dev with anticipated 421a not get the 421a. Does your attorney specialize in real estate transactions? Ask him if he's ever seen a condo not get the 421a. He should be able to give you an answer rather than cutting and pasting from the offering plan.

The closing shouldn't be open ended. There should be a deadline for the first closing in the special risks section. If they can't close by then you should be able to cancel your contract.

These are some of the inherent risks with being the first to go to contract at a new dev. Hope you received concessions for taking on that risk. Sponsors have been pretty negotiable these days when trying to get to 15%. How long have they been selling? I'd probably be more concerned with the pace of sales and why no one else is interested. There's just a lot more risk in a condo with so few units.