Condominium certificates of occupancy, title, closing costs, and buyer qualification

Four checks before a condominium closing

A condominium purchase requires separate review of lawful occupancy, title, closing funds, and buyer financing. Success in one area does not resolve the others.

Occupancy

A local building authority's certificate of occupancy identifies authorized use and occupancy. Compare the intended use with that authorization; a residential layout alone does not establish lawful residential use. A temporary certificate permits occupancy within its stated scope and duration, rather than providing permanent authorization. Requirements and acceptable evidence vary by locality, building, transaction, and lender; have the appropriate professionals confirm what applies.

Title

Under New York Real Property Law § 339-g, a unit together with its common interest is real property. Section 339-h gives the owner exclusive ownership and possession of the unit. In an ordinary fee condominium sale, the deed conveys the unit and associated common interest. A cooperative buyer generally acquires shares and a proprietary lease instead. New York also recognizes qualified leasehold condominiums, so identify the estate being purchased.

Title review checks ownership, the unit description, restrictions, liens, and other interests. Read the declaration and condominium documents to identify rights in common elements, parking, and storage. An assigned space is not necessarily separately owned. Title insurance covers specified title risks subject to policy terms and exceptions; it does not replace occupancy review or a physical inspection.

Costs

Closing funds may include the remaining down payment, attorney and title charges, recording charges, applicable taxes, lender charges, prepayments, and adjustments. Subtract the deposit already paid when calculating the remaining cash needed. Transfer taxes concern conveyances; mortgage recording taxes concern recorded mortgages. Neither is the recurring property tax. Actual charges depend on applicable law, location, exemptions, and contractual allocations. Budget separately for ongoing loan payments, property taxes, insurance, common charges, and assessments.

Qualification

The lender reviews the borrower's income, debts, credit, assets, and available funds. It also evaluates the collateral and condominium project's eligibility, which may involve finances, insurance, and litigation. Preliminary borrower approval is not final approval of the project or satisfaction of loan conditions. Review transfer procedures and any right of first refusal in the condominium documents rather than assuming the broad buyer approval process associated with cooperatives.

Complete each review before treating the transaction as ready to close.