Condominiums: definition, by-laws, the sponsor, and the offering plan

What a condominium owner owns

A condominium combines individual ownership of a unit with an undivided interest in common elements, such as shared land and structural areas. It is a form of ownership, not a building style. A cooperative purchaser instead acquires shares and a proprietary lease. In New York, each condominium unit together with its common interest constitutes real property under Real Property Law § 339-g.

Three documents, three jobs

The declaration submits property to New York's Condominium Act. It establishes the condominium's legal framework; it is not the public offering disclosure. Under Real Property Law § 339-p, floor plans are filed with the recording officer simultaneously with recording the declaration. The plans show unit layouts, locations, and approximate dimensions and require professional certification.

By-laws govern administration: the board, meetings, voting procedures, and management of common affairs. Read them to understand how owners make decisions and how the condominium operates. Do not assume that a majority necessarily means one vote per unit. Under Real Property Law § 339-e, the applicable measure may be common interest, number of units, or both, as specified for the matter.

The offering plan explains the offering to prospective purchasers. General Business Law § 352-e requires disclosure of transaction terms, the property, the interest offered, how title will be held, and specified financial information. The declaration establishes the ownership framework; by-laws govern administration; the offering plan discloses the transaction.

Sponsor and filing

The sponsor is the person or entity organizing and offering the condominium project, often a developer or owner converting a building. Examine the sponsor's commitments and any retained control in the project's documents. The sponsor and the owners' governing board have different roles.

For a covered New York public offering, General Business Law § 352-e generally requires filing with the Department of Law before the offering and an Attorney General letter stating that the offering has been filed before offers, advertising, or sales. Specific exemptions and authorized preliminary procedures can apply. Filing is not approval of the issue or sale by the Attorney General. Advertising must be consistent with the offering disclosures, and the required no-approval statement must appear in sales literature and advertising. Buyers must receive true copies of the filed information used in the offering or sale.

For an exam question, identify the problem first: ownership, creation, administration, or sale disclosure. That distinction prevents treating an accepted offering plan as a government endorsement or treating by-laws as the document that submits the property to the Condominium Act.