Sponsor unit
A sponsor unit is an apartment in a condo or co-op that is still owned by the building's original developer (the sponsor) or its successor in interest. Sponsor units are typically unsold inventory from the offering plan and carry rights and obligations distinct from shareholder- or unit owner–owned apartments.
Frequently asked questions
Does a sponsor need board approval to sell or rent a sponsor unit?
No. The sponsor reserved that right in the offering plan and is exempt from the board's standard package review for as long as the unit remains in sponsor ownership. Once sold to an individual, the unit becomes a normal unit subject to all bylaws and rules.
Does a sponsor have to pay maintenance or common charges?
Yes. Sponsor units pay the same per-share or per-unit common charges as any other unit. Sponsor delinquency on a building with many unsold units is a real risk and was a major issue in 2008–2010 distressed condos.
How long do sponsor board seats last?
Per the offering plan, but typically until the sponsor's ownership drops below a threshold (often 25% of units) or for a fixed period (often 5–7 years from closing). After that, all board seats become elected.
Can the board buy out a sponsor's remaining units?
In principle yes, with corporate authorization and financing, but it's rare. More commonly, the sponsor's remaining position is sold in bulk to a third-party investor who steps into the same rights and obligations.