Manhattan Condo Purchases: The Square Footage Gap

Dilendorf Law Firm represents local and international investors buying condominiums in Manhattan, and in our experience 2026 and 2027 are an exceptional window for cash buyers. The most common shock our clients face is not the price. It is the size of the apartment.

Why do 2026 and 2027 favor cash buyers?

In our practice, cash buyers in New York City close faster, negotiate harder and carry fewer contingencies, and sponsors and resale sellers reward that certainty. Our clients range from New Yorkers trading up to foreign investors who want a Manhattan asset held through a protective structure.

Why is the apartment smaller than the listing says?

A buyer finds a condominium on StreetEasy or Zillow listed at 1,000 square feet and prices it accordingly. Then the offering plan tells a different story.

In our experience, New York offering plans typically measure a unit from the exterior face of its outside walls and the centerline of walls shared with neighbors or corridors.

The usable interior, measured wall to wall, is smaller. Depending on how thick the walls are and how large the common areas are, the “loss factor” we see commonly runs around 20 percent and can be higher. The 1,000-square-foot apartment is, in reality, closer to 800 square feet.

The Attorney General’s regulations require Schedule A of every offering plan to list the “approximate total area of each unit” and require the sponsor to “state the method of calculating the number of rooms or approximate total area in each unit” [1].

The Attorney General’s guidance adds that “the text of the offering plan governs the sponsor’s obligation regarding the size and construction” of the units and that buyers “should not rely on advertising brochures, verbal statements from selling agents or beautiful pictures of architect’s renderings” [3].

Can you sue after closing?

Usually not. The purchase agreement incorporates the offering plan, and the plan disclosed the area and the measurement method.

New York’s Court of Appeals has held that a condominium purchaser “may not bring a claim for common-law fraud against the building’s sponsor when the fraud is predicated solely on alleged material omissions from the offering plan” required by the Martin Act and the Attorney General’s regulations [2].

Where the information was in the plan, a buyer cannot show reliance on anything else [4], and the broker who repeated a listing figure stands in a similar position.

The Attorney General “highly recommends that a prospective purchaser read the entire offering plan and consult with an attorney BEFORE signing a purchase agreement” [3]. Due diligence before contract is the remedy. There is no second one.

What should due diligence cover?

1. Measure. Compare the listing, Schedule A, the Part II floor plans and the recorded condominium floor plans, and have the unit measured if they disagree.
2. Reprice. Recalculate price per square foot on the plan’s figure and on usable area before negotiating.
3. Read the plan and amendments. Special risks, sponsor control, reserves and litigation live there, and the Attorney General warns that amenities not promised in the plan “probably will not be” delivered [3].
4. Paper every promise. Any representation not in the plan belongs in a rider to the purchase agreement [3].

What do cash buyers using an LLC or trust need to know?

Most of our investor clients take title through a limited liability company or a trust for liability protection, privacy and succession.

When an LLC buys a residential condominium, the New York transfer tax return cannot be filed unless it identifies every member and manager, down to the natural persons who ultimately own it [5].

The buyer pays the 1 percent “mansion” tax on residences of $1 million or more, plus a supplemental New York City tax that rises to 2.9 percent at $25 million [6].

A federal rule requiring all-cash purchases by entities and trusts to be reported to FinCEN was vacated by a federal court in March 2026 and is on appeal, so reporting obligations can change before closing [7].

And when a foreign owner later sells, the purchaser must generally withhold 15 percent of the price under FIRPTA [8].

This article is for general informational purposes only and does not constitute legal or tax advice. Reading it does not create an attorney-client relationship with Dilendorf Law Firm. Attorney Advertising.