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The New Construction Punch List in NYC Explained

What is a punch list when it comes to new construction in NYC? 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 and show you two sample punchlists in this article.

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What Is a Punch List?

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 2 walk-throughs of the apartment before closing. The first walkthrough is to develop a punch list and the final walk-through is to make sure everything on the punch list is done.

Pro Tip: Are you new to buying a new construction home in NYC? Make sure you work with an experienced buyer’s agent who can help guide you through this complex and unique process. Remember that you’ll be responsible for paying the sponsor’s transfer taxes unless you can negotiate!

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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 (i.e. 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. As a result, a punch list is referenced in most new development purchase contracts:

Sponsor shall make a good faith effort to address any punch list items within a reasonable period of time after closing.

Commercially Reasonable

Does the above language sound obligatory to you? Sponsors only need to make commercially reasonable efforts to complete the buyer’s punch list within a reasonable amount of time. In fact, buyers are often required to sign an official Inspection Statement at the walk-through.

This Inspection Statement will often contain the below language:

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, Sponsor’s 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 NYC!

Pro Tip: Make sure you understand the critical differences between a condominium conversion vs new construction in NYC. A condominium conversion, especially in a smaller building, can carry significantly more risks if the conversion was more of a paint job vs a complete rehabilitation.

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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 punchlist.

Buyers should be as complete as possible as the listing agent may not allow you to add additional items to the punchlist down the road.

Furthermore, the items a buyer wishes to add to the punch list should 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.

However, if there is extra paint on the window frame that’s a result of poor workmanship will most likely be added to the punch list and fixed.

Here is an example of what a sponsor’s representative responded with after a buyer asked to add some additional things she thought off after the punch list had already been created:

Thanks for your notes. Unfortunately, this is not the way we do things. You are not able to add things to the list. I made some of the changes on the attached sheet. The kitchen was designed as it is now. Any changes that we are trying to make – is a try – hence the word ‘can’. There are indeed design flaws. We will do what we can.

Pro Tip: Are you buying investment property in NYC? If so, check out our detailed rental property calculator to figure out your anticipated cap rate and cash and cash return. You can estimate your closing costs as well with our handy closing cost calculator for buyers in NYC.

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Sample New Construction Punch List

Punch List for 550 New Build Avenue
Buyer: Lamont Greene

1st Walk-through Date: July 9th, 2018
2nd Walk-through Date: TBD

General

  • Smooth out and repaint the baseboards apartment wide

  • Missing door stops apartment wide

  • Install bathroom accessories – toilet paper holder, towel bar, rob hook

  • Ensure all magnetic door closures are operational

  • Clean around window frame from over painting

Entrance

  • Missing peephole

  • Repair divot in wall

  • Fix wall beside intercom

  • Smooth wall left of door entry

  • Fill in missing screws on transformer boxes

  • Retouch entry door

  • Adjust door lock on coat closet

  • Repair door near 2nd to top hinge

  • Fill in gap with black silicone at threshold at 2nd bathroom

  • Washer dryer closet – fill in gap at threshold

  • Washer dryer closet – fill in gap at top of tiled baseboard

2nd Bathroom

  • Clean up over painting in corners (ceiling and floor)

  • Install shelves in medicine cabinet

  • Repaint back of entry door

  • Level off tub spout

Kitchen

  • Oven needs to be secured in

  • Fix alignment of upper cabinets so they are all level

  • Install filler pieces on both the left and right of upper cabinets

  • Repair lower and uppers where marked, both inside and outside

  • Adjust the dishwasher so it’s flush with the cabinets

  • Add a piece of baseboard molding to the lower cabinet left of the range so it integrates better on the wraparound

  • Fill in gaps in the shelving unit at the end of the island

  • Insert a piece of molding so it covers the gap at the island counter and side panel joint or recut the end piece and dishwasher filler piece. Perhaps have them at different plains when two pieces of different material meet.

  • Fix nicks in interior of upper cabinets covering hood

Living Room

  • Repair cracked window facing east

  • Repair the closet door at the base

  • Repaint the walls above the thermostat

2nd Bedroom

  • Missing outlet cover behind door

  • Clean paint off the locking mechanism on the door

Master Bedroom

  • Repaint the northern wall

  • Repaint the closet frame

  • Smooth out the baseboard to the left of the closet

  • Replace missing screw from lockset

  • Smooth the bulge in the floors at the southeastern corner of the room and fill the gap

  • Replace sprinkler heads

Master Bathroom

  • Fill in the gap with black silicone at the threshold of the 2nd bathroom

  • Repaint to the left of the entry door

  • Fill the gap on the door frame on the lower right

  • Repair the edge near the cover lighting in the shower

  • Redo silicone along all corner edges

  • Paint the interior of the cove in the shower

  • Install shelves in medicine cabinet

  • Adjust the vanity drawers so they are level

  • Level shower escutcheon plate

  • Redo joint at tile to sheetrock joint along wall and ceiling

Buyer Initials:
Date:

Sponsor Representative Signature:
Date:

Pro Tip: Are you buying a new construction co-op apartment? It’s certainly more rare to see new developments these days structured as cooperatives, so please be careful in analyzing why the sponsor chose this route. Most likely, it’s because the sponsor wants to pass off a large mortgage on the building to the new co op owners. If the co-op has already started operating independently, make sure your bank or attorney submits a comprehensive survey questionnaire for cooperative to the managing agent. If you’re buying an apartment in a self-managed co-op building, then you’ll need to submit the questionnaire directly to the co op board.

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Simple Punch List Example

  • Large crack on top left corner of second bedroom

  • Shower door in master bath does not close – glass chipped off door when forced to close.

  • Outlets next to the kitchen faucet: the two outlets on the left don’t have power (there are 4 total there)

  • Outlet on on the SE corner of living room, plugs cannot be inserted in the top outlet (won’t go in all the way). NE corner of living room’s outlet, cannot insert plug in either top or bottom one.

  • Lights not working: kitchen light and 2nd BR closet (bulb or socket?).

  • Windows need cleaning.

  • Scuff marks in the hall around the entry way (small one near thermostat also, for instance).

  • Scuff marks in master BR closet.

  • Visible screws on shutters, some shutters don’t sit well in their window compartments.

  • Paint apartment white (where currently light pink or light yellow — living, bedrooms).

More Questions? Have any question answered in Hauseit’s Forum, where New York real estate professionals come together to discuss the toughest questions in real estate.

Save 2% on Your Home Purchase

Save money without disrupting your deal by working with one of our traditional, experienced partner buyer's brokers who never openly discount. Discreet buyer closing credit check given at close.


Disclosure: Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).

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