NEW YORK, NY – Buyers entering the New York City real estate market often focus on the purchase price and monthly carrying costs, while overlooking special assessments that can significantly increase the true cost of ownership. NYC real estate attorney Natalia A. Sishodia of Sishodia PLLC (https://sishodia.com/special-assessments-what-buyers-should-check-before-signing/) highlights the due diligence steps and contract protections buyers should consider before signing a purchase agreement for a co-op, condo, or HOA-governed property.
According to NYC real estate attorney Natalia A. Sishodia, special assessments come from two distinct sources, and each carries its own risks. Municipal assessments are levied by local governments within Special Assessment Districts to fund infrastructure projects such as sewer lines, sidewalks, and street lighting. Private assessments are imposed by co-op, condo, or HOA boards to cover capital improvements, emergency repairs, or budget shortfalls. “Unpaid municipal assessments can attach to the property as liens that must be satisfied before a clear title can transfer,” Sishodia explains. “Buyers who skip this step in due diligence can find themselves responsible for debts they never agreed to take on.”
NYC real estate attorney Natalia A. Sishodia emphasizes that private assessments often pose the greater hidden risk because they can arise with little notice and depend heavily on the building’s financial management. Common reasons for private assessments include emergency repairs such as boiler failures or roof collapses, capital improvements like elevator modernization or window replacements, and operating budget shortfalls. Costs are typically allocated by each owner’s proportionate interest, which for condos generally tracks square footage and for co-ops follows the number of shares tied to a unit.
In a city where much of the housing stock is decades old, the eventual replacement of major building systems is more a matter of timing than possibility. Roof replacements, elevator modernizations, boiler overhauls, and building-wide window projects routinely run into the hundreds of thousands or even millions of dollars. An elevator modernization alone can leave each owner with a bill of $10,000 or more once costs are divided.
One of the most consistent drivers of special assessments in New York City is Local Law 11, formally known as the Façade Inspection & Safety Program, or FISP. Buildings taller than six stories must undergo a façade inspection by a Qualified Exterior Wall Inspector every five years, and reports filed with the Department of Buildings classify the façade as Safe, Safe with a Repair and Maintenance Program, or Unsafe. Sishodia notes that a SWARMP or Unsafe designation is a clear signal that significant costs may be on the horizon.
Attorney Sishodia adds that buyers should be especially cautious when an assessment is being imposed simply to cover an operating deficit or replenish a chronically underfunded reserve. “A well-managed building should be funding reserves consistently through regular maintenance fees,” Sishodia points out. “When a board has to assess owners just to meet ordinary expenses, that often signals deeper governance issues that may continue long after closing.”
Negotiation strategy turns on the critical distinction between confirmed and proposed assessments. A confirmed assessment has been formally approved by the governing body, while a proposed assessment has been discussed but not yet voted on. Under most standard contracts, the seller is responsible for paying the full balance of confirmed assessments at or before closing, while the buyer assumes the risk that proposed assessments may be approved afterward. The firm advises that buyers’ attorneys can negotiate explicit seller-payment language, purchase price reductions where assessments are likely, or seller credits and escrow holdbacks where the cost is not yet finalized.
When an assessment surfaces only after closing, recourse may exist under New York’s Property Condition Disclosure Act if a seller knowingly provided false information on the disclosure form. “Buyers may also have claims for fraud, misrepresentation, or breach of contract if a confirmed assessment was concealed before closing,” Sishodia advises. “But litigation is expensive and unpredictable, and legal fees can quickly approach the disputed amount itself.”
The firm regularly works with title companies that request estoppel certificates from condo or HOA management before closing. These certificates confirm the unit’s financial status, including outstanding common charges and assessments, and serve as a documented record that buyers can rely on. If an association issues an estoppel certificate that fails to disclose a known assessment, the buyer may have grounds for a claim against the association as well as the seller.
Market conditions also influence how successful buyers can be in negotiating around assessments. In a competitive seller’s market with multiple offers, a buyer may have limited leverage to demand a price reduction or seller credit. In a slower buyer’s market, sellers are often more willing to absorb potential assessments, provide credits at closing, or agree to escrow holdbacks to keep the deal alive. Attorney Sishodia notes that the right strategy depends as much on timing and competition as on the underlying numbers.
For buyers preparing to enter a co-op, condo, or HOA-governed transaction in New York City, careful review of board minutes, financial statements, reserve fund balances, FISP reports, and engineering studies can surface assessment risks before they become contractual obligations. Consulting a real estate attorney during the due diligence phase may help buyers identify red flags and negotiate protections that are difficult to obtain after a contract is signed.
About Sishodia PLLC:
Sishodia PLLC is a New York City-based law firm focused on high-end residential and commercial real estate transactions, condominium and cooperative matters, foreign investment, and estate planning. Led by managing partner Natalia A. Sishodia, Esq., LL.M., the firm represents domestic and international clients throughout New York City. For consultations, call (833) 616-4646.
Email: natalia@sishodialaw.com
Media Contact
Name
Sishodia PLLC
Contact name
Natalia A. Sishodia
Contact phone
(833) 616-4646
Contact address
600 3rd Ave 2nd floor
City
New York
State
New York
Zip
10016
Country
United States
Url
https://sishodia.com/
