What is a New Construction Punch List in NYC Real Estate

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When closing on your new construction in NYC, punch lists help you hold the builder or contractor accountable for all the details that might have been overlooked.

In this video, Nick Oliver with Hauseit provides an overview of new construction punch lists in New York City real estate. A punch list is a list of improvements, repairs, and touchups that a buyer wants the sponsor to complete before closing. Sponsors are only obligated to build a new construction project up to code per the co-op or condo offering plan, and they are required to address any punch list items within a reasonable period of time after closing.

It is important to agree on the punch list with the sponsor's representative and have both parties sign or initial the punch list to ensure that the items are reasonable.

Here’s the video: What Is a New Construction Punch List in NYC Real Estate

What Is a New Construction Punch List in NYC Real Estate Video Transcription

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 specific timeframe? 

In the following video, we’ll explain everything you need to know about new development punch lists.

What is a Punch List in New York City Real Estate? 

A punch list is a list of improvements, repairs, and touchups that a new development condo or co-op buyer wants to sponsor to complete before closing. Usually, two walkthroughs of the apartment occur before closing, the first is to develop a punch list, and the final walkthrough is to make sure everything is done. 

Are Sponsors Obligated to Complete the Punch List? 

Sponsors are only legally required to build a new construction project up to code per 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. The larger developers have significant brand equity to protect and lots of properties to sell.

Punch Lists in New Development Purchase Contracts

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 must make commercially reasonable efforts to complete the Buyer's punch list within a reasonable amount of time. Buyers are often required to sign an official inspection statement at the walkthrough.

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, contractors, architects, or engineers 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 rely on good faith that the sponsor will complete any touchups you've requested when buying a new construction home in New York City. 

Disagreements over punch list editions, 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 walkthrough. 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 punch lists 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 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 be Rejective.

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. 

Manage Your New Construction Punch Lists Using SeeSnap

Closing on new construction can be exciting; however, it’s important to remember the details, and that’s what a punch list can cover. SeeSnap makes your photos smart, so they are searchable, organized, and they make sure that everyone knows what needs to be done to close the new construction project.

Use SeeSnap, your smart punch list app, and let smart photos do the heavy lifting when managing final new construction tasks.

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