1. Contract and Payment Requirements before Closing
The purchase agreement determines what each party must deliver before closing. Buyers should compare its conditions with title, financing, and payment records.
Purchase Agreement and Title Review
The contract identifies financing contingencies, approvals, possession terms, and closing obligations. For deed-based real estate transactions, title examinations identify recorded mortgages, judgments, liens, and ownership restrictions.
Key documents include:
- Purchase agreement and amendments
- Title report and mortgage payoff statements
- Deed and transfer documents
- Closing statement and lender documents
A title commitment identifies coverage conditions and exceptions. Buyers should distinguish accepted exceptions from defects requiring correction.
Mortgage Payoffs and Closing Funds
Sellers generally must address outstanding mortgages under the contract. Payoff statements specify the amount required to satisfy a loan. Financed buyers should confirm loan approval and available funds. Closing figures must account for deposits, tax adjustments, and agreed credits. Unexpected balances may require recalculation or an extension.
2. What Property Issues Can Delay Closing?
Building violations, missing approvals, and title defects may prevent contractual performance. The agreement determines which problems require correction and the available remedies.
Building Violations and Occupancy Records
NYC Department of Buildings records through BIS and DOB NOW identify permits, violations, and Certificates of Occupancy. A Certificate of Occupancy establishes authorized building use. Unapproved alterations may cause problems when actual conditions differ from approved records.
Buildings constructed before 1938 may not require a Certificate of Occupancy unless later alterations trigger that requirement. A Letter of No Objection may confirm lawful use in qualifying circumstances. Open violations do not automatically prohibit sales. Contract terms, lender requirements, and building regulations determine whether correction is necessary.
Title Defects and Contractual Remedies
A tax lien, judgment, or unreleased mortgage may prevent delivery of the agreed title. The seller may obtain a release, arrange payment at closing, or negotiate additional time. If the seller cannot perform, remedies may include termination, deposit recovery, damages, or specific performance, depending on contractual and legal requirements.
A buyer seeking specific performance generally must demonstrate readiness, willingness, and ability to perform. Qualifying disputes may proceed in Kings County Supreme Court, Civil Term, at 360 Adams Street, Brooklyn. Ordinary closings do not require court approval.
3. How Do Closing Requirements Differ by Property Type?
Ownership structure determines the required transfer documents and approvals.
Houses, Condominiums, and Co-Ops
| Roperty Type | Main Closing Requirements |
|---|---|
| House | Deed, title review, mortgage payoff |
| Condominium | Deed, title review, common charges |
| Cooperative | Stock transfer, proprietary lease, board approval |
House and condominium purchasers generally receive ownership interests through deeds. Condominium documents may impose additional transfer conditions. Co-op buyers acquire corporate shares and proprietary lease rights. Board approval and stock-transfer documents are generally required.
These distinctions affect property transfer and continuing ownership restrictions.
Tenant-Occupied Property
Buyers should review leases, security deposits, rent records, and applicable rent regulation. A sale does not automatically terminate tenancy rights. Under New York General Obligations Law §7-105, sellers generally must transfer tenant security deposits at conveyance or within five days afterward and provide the required notice, subject to statutory conditions.
The contract should also address vacant possession requirements and outstanding rent adjustments.
4. Closing Taxes, Federal Disclosures, and Recording
State taxes, NYC charges, and federal mortgage disclosures impose separate obligations.
Transfer Taxes and Mortgage Costs
New York State imposes transfer taxes on qualifying transactions, with additional taxes depending on consideration and property type. NYC separately imposes Real Property Transfer Tax (RPTT), including on qualifying co-op share transfers. Mortgage recording tax may apply to mortgages recorded against real property.
For covered residential mortgage loans, federal Regulation Z generally requires borrowers to receive a Closing Disclosure at least three business days before consummation. Certain changes to the annual percentage rate, loan product, or addition of a prepayment penalty require a new waiting period.
Recording Ownership Documents
The NYC Office of the City Register maintains Brooklyn deed and mortgage records through ACRIS. Its Brooklyn submission office is at 210 Joralemon Street, second floor. ACRIS supports property searches and preparation of recording documents. NYC generally requires an RPTT return within 30 days after transfer, including applicable transactions with no tax due.
Co-op transfers generally involve corporate share records and applicable UCC filings rather than apartment deeds. After closing, parties should confirm recording accuracy and mortgage satisfactions. A deed recording review may identify discrepancies.
5. Frequently Asked Questions
Does a Cash Buyer Need Title Insurance?
New York law generally does not require cash purchasers to obtain owner's title insurance. However, purchasing without coverage may expose owners to certain title defects or competing claims. A title search examines records, while an owner's policy covers specified risks subject to exclusions. Lender policies generally protect lenders rather than purchasers.
What If the Final Walk-Through Reveals Property Damage?
Buyers should document the damage and compare it with contractual delivery requirements. Preexisting defects and damage occurring after contract execution may create different rights.
Under New York General Obligations Law §5-1311, unless the contract expressly provides otherwise, material destruction before either title or possession transfers may entitle the buyer to recover payments made, subject to statutory conditions. For lesser damage, the parties may negotiate repairs or a price adjustment. Available remedies depend on the contract and circumstances.
6. When Should an Attorney Review Closing Issues?
A real estate closing lawyer may review title defects, contract conditions, mortgage documents, building records, and transfer requirements. When a seller cannot deliver agreed title or property conditions differ from contractual representations, an attorney can assess possible corrections, amendments, extensions, or breach-of-contract remedies.
22 Oct, 2026
