Offering plan milestone

NYC Offering Plan Declared Effective: Buyer Checklist

For a typical newly constructed NYC condominium governed by Part 20, declared effective means the sponsor is stating that the offering plan's effectiveness requirements have been met. This is an important offering and sales milestone, but it is not government approval of the project and does not by itself mean construction is complete, a permanent Certificate of Occupancy exists, the lender has approved the project, the first closing has occurred, or purchasers control the board. Buyers should obtain the effectiveness amendment, current amendment set, and updated closing-readiness status for legal, lender, and occupancy review. Conversion, co-op, and small-offering rules may differ.

Published 2026-10-0411 min read

Accepted for filing and declared effective are different stages

An offering plan accepted for filing can be used to market units and enter into purchase agreements under its disclosed terms. The required plan warning makes clear that filing with the Department of Law does not mean the Attorney General or another government agency has approved the offering.

Declared effective is a later milestone. For a typical newly constructed condominium governed by Part 20, the sponsor represents through the required effectiveness process that the plan and regulatory conditions for effectiveness have been met. Buyers should ask counsel to identify the actual effectiveness document rather than rely on a sales-office summary.

The 15 percent rule is a floor, not the whole answer

Part 20 generally permits a plan covering more than five offered units to be declared effective after bona fide purchasers have signed purchase agreements for at least 15 percent of the units offered under the plan. Agreements still subject to an unexpired and unwaived rescission right cannot be counted. Sponsor principals and certain affiliated purchasers are not counted in the ordinary way, and primarily ancillary units such as parking spaces or cabanas generally do not create the same count.

Do not convert that rule into a universal project statement. The plan, construction lender, or another project-specific requirement may require a higher presale level or additional conditions, and Part 20 requires declaration once accepted agreements reach 80 percent of offered units. The effectiveness amendment and underlying plan control the buyer's review; occupied-building conversions and small offerings can follow different rules.

Effectiveness is not the same as first closing

For a Part 20 offering of more than five units, the first closing generally follows declaration of effectiveness and acceptance of the effectiveness amendment for filing. The condominium declaration, bylaws, floor plans, and other required instruments also must be recorded or filed before the first transfer of title.

A buyer should therefore ask three separate questions: Has the plan been declared effective? Has the first closing occurred? Has the condominium declaration been recorded? One date should not be used as a substitute for the other two.

Effectiveness is not a Certificate of Occupancy

A Certificate of Occupancy is a separate NYC Department of Buildings record describing lawful use and permitted occupancy. Offering-plan effectiveness does not establish that construction is complete or that the building has a permanent CO.

Some closings may proceed with a temporary, partial, or other permitted occupancy document covering the relevant unit or building portion. Buyers should check the CO and TCO guide, ask which document covers the unit, and have counsel and the lender evaluate the current closing path.

Effectiveness is not lender project approval

A lender can review the borrower's finances and the condominium project on separate tracks. Declared effective may be relevant to project status, but it does not guarantee that a lender will accept the budget, insurance, owner-occupancy, sponsor concentration, litigation, construction, or other project-review facts.

Ask the lender which project documents remain open and whether the effectiveness amendment, recorded declaration, first-closing evidence, CO or TCO, budget, insurance, or sponsor sales data are still required. Keep the answer in writing and connect it to the buyer's contract and rate-lock timeline.

Read the effectiveness amendment with the later amendments

The effectiveness amendment is not the end of the disclosure file. Later amendments may report a first closing, budget changes, construction updates, new special risks, sponsor changes, litigation, tax information, financing facts, or changes to the anticipated completion schedule.

Use the offering-plan amendment tracker to confirm the amendment sequence and acceptance dates. Ask counsel whether the effectiveness document or any later amendment changes an assumption used when the buyer signed or priced the transaction.

Keep sponsor control and resident control separate

Plan effectiveness does not mean purchasers immediately control the condominium board. Sponsor-control periods, board-designation rights, unit-sales thresholds, time periods, and transfer mechanics are disclosed separately in the plan and organizational documents.

A buyer who wants to understand governance, budgets, contracts, and transition timing should use the sponsor-controlled board guide. Do not infer resident control from the effective date or first closing alone.

Buyer scenario: effective plan, no first closing yet

A buyer learns that the offering plan has been declared effective, but the sponsor has not confirmed the first closing and the building still has only a TCO for part of the project. The buyer should request the accepted effectiveness amendment, current amendment index, declaration-recording status, occupancy document for the unit, lender project-review status, and updated construction and closing schedule.

The buyer should not treat effectiveness as proof that a closing notice is valid or that every contract condition has been satisfied. Contract timing, outside dates, closing notices, extensions, and remedies belong with counsel and the signed documents. The outside-date guide can help organize those questions.

What changes the answer

The answer changes with the plan type, number of offered units, effectiveness language, purchaser count, construction-lender requirements, filed amendments, first-closing status, recorded declaration, CO or TCO, contract rider, lender project review, and later project developments.

This resource is general process education, not legal, tax, mortgage, underwriting, construction, title, or investment advice. It does not decide whether a plan was validly declared effective, whether a sponsor may abandon the plan, whether a closing notice is enforceable, or whether a buyer may cancel or recover a deposit.

Sources

Source freshness was checked on October 4, 2026. The New York Attorney General regulations index and Part 20 materials were used for the scope, filing warning, effectiveness, purchaser-count, amendment, recording, and first-closing framework: https://ag.ny.gov/resources/organizations/real-estate-regulation/rules-and-regulations and https://ag.ny.gov/sites/default/files/13_nycrr_20_3.pdf

The Attorney General's buyer guidance was used for offering-plan review, sponsor obligations, and the instruction to put material representations in writing: https://ag.ny.gov/you-buy-co-op-or-condo

The Attorney General Real Estate Finance Database was used for the buyer's filing and amendment-history research path: https://offeringplan.datasearch.ag.ny.gov/REF/

NYC Department of Buildings Certificate of Occupancy guidance was used to distinguish lawful occupancy records from offering-plan effectiveness: https://www.nyc.gov/site/buildings/property-or-business-owner/certificate-of-occupancy.page

Keep new development research tied to current project documents.

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Buyer cost checks

Keep taxes, assistance programs, and rebate estimates separate.

NYC buyer planningMansion tax cash-to-close guideCheck price-triggered New York and NYC buyer tax thresholds before treating a closing-cost estimate as complete.NYC buyer planningFirst-time buyer program timing guideKeep official assistance-program timing separate from buyer rebates, lender credits, and offer-stage assumptions.

FAQ

Common buyer questions

Does declared effective mean the Attorney General approved the condo?

No. Filing and effectiveness are regulatory offering-plan milestones, not government approval of construction quality, price, financial merits, sponsor performance, or investment value.

Does declared effective mean the building is finished?

No. Construction, amenity delivery, punch-list work, permanent CO status, and other completion items must be checked separately against current documents and professional review.

Does declared effective mean buyers have already closed?

Not necessarily. Effectiveness and first closing are separate milestones. Ask for the reported first-closing date and declaration-recording status.

Does declared effective guarantee mortgage approval?

No. The lender still evaluates the borrower and project under its own requirements. Ask for written project-review status and open conditions.