The Sponsor's Condo-Creation Fee in NYC

Updated Oct 14, 2026 · 4 min read

What the Clause Says

Most new-development buyers know they'll pay the transfer taxes, two months of common charges and the sponsor's attorney fee. Some offering plans add a flat fee paid straight to the developer "to defray the Sponsor's costs of creating the condominium."

At 402 Union Avenue in Williamsburg, the plan's list of closing costs (page 64) reads:

"At closing, each Purchaser shall pay to the Sponsor the sum of $15,000.00 to defray the Sponsor's costs of creating the condominium, e.g, architectural costs, filing fees, legal fees and other costs incurred in creating the condominium"

The plan's summary of buyer closing costs (page 40) lists it next to two months of common charges, the transfer taxes and $3,500 for the sponsor's attorney. In the sample closing statement it appears as "To Defray Sponsor's cost $15,000."

At 28-8 21st Street in Astoria, the same clause asks for $8,500 (page 66). The sample closing cost table (page 81) lists "Sponsor's attorney fee $3,500" and "To Defray Sponsor's cost $8,500."

In other words, the buyer is reimbursing the developer for the architects, filing fees and lawyers it needed to turn the building into a condominium, which are normally part of the developer's cost of doing business.

The catch: the fee goes to the developer, not the condominium. It's in addition to the sponsor's attorney fee, and the buyer also pays the city and state transfer taxes.

How Much It Costs

We searched 2,182 NYC condo offering plans for the clause. It appears in 480 of them (22%), and in about 27% of plans filed since 2016. The typical amount is $3,500 per apartment, but 20% of plans with the fee ask for $8,500 or more.

$3,500 is the most common amount (36% of plans with the fee). 6 plans ask for $15,000, including 402 Union Avenue.

Why It's Mostly Brooklyn

The fee shows up in 34% of Brooklyn plans, compared with 3% in Manhattan and 6% in Queens.

The clause is boilerplate from a small number of sponsor's law firms that file many small Brooklyn buildings, and each firm tends to use its own amount. 92% of the plans that charge it were filed by the three firms below.

Most Manhattan and Queens plans don't list it as a separate charge. That doesn't tell you what those sponsors build into the price or their other closing fees, so compare total closing costs, not line items.

What Buyers Can Do

• Find it before you sign. Search the offering plan for "defray" or "creating the condominium." It's usually in the closing costs section, in the purchase agreement and in the sample closing statement. Check the amendments too, since sponsors can change closing costs later.
• Count it as part of the price. A $15,000 fee on top of a $3,500 attorney fee and transfer taxes adds up quickly, and none of it goes to the building.
• Ask your attorney to negotiate it. It's a sponsor charge, not a tax or a lender fee, so it can be reduced, waived or credited, especially when units are slow to sell.
• Don't confuse it with the working capital contribution. That payment goes to the condominium. See the working capital contribution.

Related: The Condo Working Capital Contribution · NYC Condos That Beat Their Price List