4 years ago

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The New Construction Punch List in NYC Explained: https://www.hauseit.com/new-construction-punch-list-nyc-explained/

What is a new construction punch list in New York City real estate? Are sponsors obligated to finish a buyer’s punch list within a certain time frame? We'll explain everything you need to know about new development punch lists in the following video. I'm Nick at Hauseit, visit our website https://www.hauseit.com to learn about ways to save money when buying or selling real estate here in New York City. So, let's get started.

So, what is a punch list in New York City real estate? Well a punch list is a list of improvements repairs and touch-ups that a new development condo or co-op buyer wants the sponsor to complete before closing or soon after closing. Usually in new construction there are two walkthroughs of the apartment before closing. The first walkthrough is to develop a punch list and the final walkthrough is to make sure everything on the punch list is done.

Are sponsors obligated to complete the punch list? Sponsors are only legally required to build a new construction project up to code for the co-op or condo offering plan. This information is typically referenced in a section called rights and obligations of sponsor construction obligations. However, sponsors are also business people who want their customers to be happy and the larger developers have significant brand equity to protect and lots of properties to sell. As a result, a punch list is referenced in most new development purchase contracts. Here's an example of how this language will appear. Sponsors shall make a good faith effort to address any punch list items within a reasonable period of time after closing.

Now does the above language sound obligatory to you? Sponsors only need to make commercially reasonable efforts to complete the buyers punch list within a reasonable amount of time. In fact, buyers are often required to sign an official inspection statement at the walk through which speaks to this. The inspection statement will often contain language such as the following, I understand that work indicated on the inspection sheet shall be performed in accordance with the practice of the industry.

In the event of a dispute sponsors, contractor, architect or engineer shall determine whether or not such work was performed according to such standard and his or her decision shall be binding on the parties hereto. You agree to complete all items listed on this inspection statement within a reasonable period of time following closing to my unit subject to delays for work or materials beyond your control. As a result, you truly are relying on good faith that the sponsor will complete any touch-ups you've requested when buying a new construction home in New York City.

Disagreements over punch list additions. New development, condo or co-op buyers should always ensure that the real estate listing agent or another sponsor's representative is present at the walk through. You'll want to agree on the punch list with the sponsor's representative and have both of you sign or initial the punch list. Buyer's should be as complete as possible as the listing agent may not allow you to add additional items to the punch list down the road.

Furthermore, the items the buyer wishes to add to the punch list must be reasonable in order for the sponsor's representative to agree. For example, a request for a new bathtub to be installed because you aren't the biggest fan of the original design would probably be rejected. It was always clear what the design was going to be when you decided to buy the apartment and sign the contract. However, if there is extra paint on the window frame that's a result of poor workmanship or carelessness this will most likely be added to the punch list and fixed.

So, there you have it. We hope you found this video helpful. I'm Nick at Hauseit, visit our website https://www.hauseit.com to learn about ways to save money when buying or selling real estate here in New York City and if you like this video do us a favor hit like, subscribe, leave us a comment. We greatly appreciate it and we hope to see you on the next one!

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/
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Hauseit LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
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