524 HALSEY STREET

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ies $7,342.00 Service Contracts $28,260.67 Insurance $53,926.20 Phone $3,013.67 Professional, Legal and Audit Fees $1,000.00 Other Expenses $3,304.04 Reserve Fund $33,427.43 Total $367,701.77 SCHEDULE B BUDGET FOR CONDOMINIUM OPERATIONS JANUARY 1, 2026 - DECEMBER 31, 2026 524 HALSEY CONDOMINIUM 524 Halsey Street Brooklyn, New York

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ome ownership. In general, under the new Tax Cuts and Jobs Act, the owner of a residential condominium unit may deduct interest paid on his or her mortgage indebtedness on a mortgage of $750,000 or less, as well as up to $10,000 in the aggregate of the real estate taxes assessed and paid on his or

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21 The opinion of the Sponsor’s attorney included in this Plan also describes circumstances under which interest paid by a Unit Owner on his or her mortgage indebtedness for a Residential Unit may be deductible for income tax purposes. As a result of changes in interest rate on the Unit Owner’s mortgage and allocation of constant debt service payments to interest and principal on the Unit Owner’s mortgage, the amount of income tax deductions with respect to mortgage interest paid will vary. The tax projections set forth on Schedule A include the projection of real estate taxes payable by each Unit Owner during the projected first year of Condominium operations, which include and are based on an assessment of the Building before construction is complete and, therefore, the taxes projected on Schedule A for the projec ted first year of Condominium operations may increase materially when the Building is reassessed after construction is complete. Therefore, Schedule A also

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s otherwise determined by the Unit Owners as described in the By-Laws. No portion of the insurance proceeds shall be applied to the payment of the mortgage indebtedness of any Unit Owner unless the Unit Owners determine not to repair, restore or rebuild the Building as set forth in Section 339-cc of the Condominium Act. If, as a result of damage or destruction of the Building by fire or casualty, the Property becomes subject to an action for partition by any Unit Owner or lienor, in accordance with the provisions of the Condominium Act, the Building will not be repaired and the net proceeds of sale, together with the net proceeds of insurance policies (or if there shall have been a repair or restoration pursuant to the By Laws and the amount of insurance proceeds shall have exceeded the cost of such repair or restoration, then the excess of such insurance proceeds) shall be divided by the Board of Managers among all the Unit Owners in proportion to their respective Common

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The opinion of the Sponsor’s attorney included in this Plan also describes circumstances under which interest paid by a Unit Owner on his or her mortgage indebtedness may be deductible for income tax purposes. As a result of changes in interest rate on the Unit Owner’s mortgage and allocation of constant debt service payments to interest and principal on the Unit Owner’s mortgage, the amount of income tax deductions with respect to mortgage interest paid will vary. The tax projections set forth on Schedule A include the projection of real estate taxes payable by each Unit Owner during the projected first year of Condominium operations, which include and are based on an assessment of the Building before construction is complete and, therefore, the taxes projected on Schedule A for the projected first year of Condominium operations may increase materially when the Building is reassessed after construction is complete. Therefore, Schedule A also contains projections for

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gainst his or her Residential Unit and the state and local taxes and paid to the taxing authorities, as well as the amount paid by him or her on any mortgage indebtedness of $750,000 or less in connection with the purchase of his or her Residential Unit if the Residential Unit is a household’s primary residence. In addition, the Sponsor has been advised by counsel that some Unit Owners, such as veterans of the United States armed forces, may be entitled to exemptions covering part of the real estate taxes otherwise assessed against their Units. The Condominium is expected to be a taxable entity and will file tax returns. Certain condominiums that satisfy the requirements of Section 528 (c) (i) of the Code, however, may elect to be treated as “homeowners associations” for federal tax purposes. In order for the Condominium to qualify as a homeowners association, Section 528 would require, among other things, that substantially all of the Units in the Condominium be u

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N.Y. Real Property Law). Under the new Tax Cuts and Jobs Act, the owner of a residential condominium un it may deduct interest paid on his or her mortgage indebtedness on a mortgage of $750,000 or less, as well as up to $10,000 in the aggregate of the real estate taxes assessed and paid on his or her interest in the property and the state and local taxes paid to the taxing authorities. Based on the foregoing, it is our opinion that each individual taxpayer will be entitled under current law to deduct from his or her gross income, subject to limitations on deductions as set forth in the Code, for federal, New York State and New York City income tax purposes, up to $10,000 in the aggregate of real estate taxes assessed against his or her Residential Unit and state and local taxes and paid to the local authorities. However, no deduction for real estate taxes is permitted for purposes of the federal alternative minimum tax. Residential Unit Owners should consult their t

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............................................. 96 OPINION LETTER REGARDING REAL ESTATE TAXES .................................................... 98 RESERVE FUND .......................................................................................................................... 113 WORKING CAPITAL FUND AND CLOSING ADJUSTMENTS WITH THE CONDOMINIUM BOARD .......................................................................................................... 113 MANAGEMENT AGREEMENT, CONTRACTS AND LEASES .......................................... 115

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Plan entitled “Closing Costs and Adjustments.” 20. At Closing, each Purchaser will contribute three months’ Common Charges to the Condominium’s working capital fund. No representation is made that the working capital fund will be, or is intended to be, adequate to cover expenses for the first or any subsequent year of Condominium operations, including, without limitation, the cost of any necessary repairs or replacements. If additional funds are required over and above the working capital fund, it may be necessary to increase the Common Charges or to asse ss Unit Owners. Neither the Department of Law nor any other governmental agency has passed

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xiii upon the adequacy of the working capital fund. See the section of this Plan entitled “Working Capital Fund and Closing Adjustments with the Condominium Board.” 21. The Sponsor has budgeted for a yearly contribution to a reserve fund in the amount set forth in Schedule B. It is anticipated, but not guaranteed, that the budgeted yearly reserve fund will be sufficient to pay for major capital repairs or replacement items that may be needed within the first five years of Condominium operations. However, no warranty or representation as to the need for, or timing of, future capital improvements is made to Unit Owners or the Board of Managers.See the section in Part I of this Plan entitled “Reserve Fund.” 22. The Board of Managers does not have the right to approve or disapprove Purchasers. There is no limit on the number of Unit Owners who may purchase for investment rather than for personal occupancy. Therefore, there may always be a substantial percentage of

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ay, all expenses to operate the Building based on the actual costs of operating the Building, including, without limitation, insurance premiums and reserve fund payments, instead of on the estimates set forth in Schedule B. Such expenses, however, shall not include individual Unit Owner expenses such as, but not limited to, real estate taxes and utility charges consumed within the Units. Therefore, during the Waiver Period, Schedule B will not be in effect and the level of services to the Building described in the Notes to Schedule B will not be fully in effect. In all instances, however, including during the Waiver Period, Unit Owners will remain responsible for the payment of real estate taxes applicable to and utility charges consumed within their Units, regardless of whether the Units have been separately assessed. Sponsor will terminate the Waiver Period upon thirty (30) days’ prior written notice to Unit Owners, after which the Schedule B and all Building service

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g such Closing. If the result of the closing adjustments is a net credit in favor of the Condominium, the Sponsor shall make a contribution to the working capital fund in the amount of such net credit. If, however, the result of the closing adjustments is a net credit in favor of the Sponsor, same will be paid to the Sponsor by the Board in twelve (12) equal consecutive monthly installments pursuant to the terms of twelve (12) negotiable serial promissory notes to be executed by the Board at the first Closing. The first of these serial promissory notes will mature two (2) months after the date upon which the first Closing takes place and the

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epay each serial promissory note, in full only, at any time and without penalty. Payments of the serial promissory notes may be withdrawn from the Working Capital Fund. In the event the Working Capital Fund is insufficient to fully pay off the serial promissory notes, payment of the balance of the same shall be a Common Expense that will increase the Common Charges. The Sponsor will disclose any such closing adjustments made as of and in the post-closing amendment to this Plan. See the section of this Plan titled “Closing Adjustments with the Condominium Board.” 40. Each Purchaser shall execute and deliver to the Sponsor at the Closing the Power of Attorney included in Part II of this Plan at the Closing. Failure to do so will be a default under the Purchase Agreement. See the section of this Plan titled “Procedure to Purchase.” 41. Article 36-B of the New York General Busine ss Law (the Housing Merchant Implied Warranty Law) applies to this offering because th

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t the time in question, by the Sponsor or its designee or successor who or which does not occupy the Unit for his, her, its or their own use. 36. Working Capital Fund - A fund created for working capital, making repairs or for such other appropriate purposes permitted under the By-Laws as will be determined by the Board of Managers. At Closing, each Purchaser will contribute three months’ Common Charges to the fund. See the section of this Plan entitled “Working Capital Fund And Closing Adjustments With The Condominium Board.”

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er or its Unit. At the Closing of a Unit, the Purchaser will be required to make a contribution equal to three months of Common Charges to the Working Capital Fund as described in the section of this Plan entitled “Working Capital Fund and Closing Adjustments with the Condominium Board” below. Each Unit Owner will be responsible for the cost of interior maintenance and repair of his, her or its Unit, and for the cost of all decoration of the interior of the Unit beyond that set forth in the “Description of Property and Specifications or Building Conditions” in Part II of this Plan. Each Unit Owner will be responsible for the cost of his, her or its own liability insurance to cover occurrences within the Unit as well as for casualty insurance to cover losses to his, her or its personal possessions and improvements in the Unit. A more detailed description of the rights and obligations of Unit Owners is contained in the Declaration and By-Laws of the Condominium. T

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ice Contracts (7) $21,716.00 Insurance (8) $36,925.00 Management Fee (9) $19,800.00 Legal and Audit Fees (10) $2,150.00 Other Expenses (11) $3,000.00 Reserve Fund (12) $30,700.00 Total $307,331.00 If at any time, the actual or projected commencement of the budget year in this Plan differs by six months or more from the anticipated date of the first Closing, this Plan will be amended to include a revised budget. If the amended projections exceed the original projections by twenty- five percent or more, the Sponsor will offer all Purchasers with pending Purchase Agreements the right to rescind for a period of fifteen days after the date of presentation of such amendment The Sposor shall return promptly all Down Payments, with interest earned, if any, to Purchasers who rescind. The Sponsor may not declare this Plan effective where there are material changes to the budget if such material changes have not been disclosed by a duly filed amendment to this Plan. SCHEDULE B BUDGET FOR FIRST

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Unit Owners, annual meetings and general expenses. No warranty is made that the amount shall be sufficient to pay all expenses incurred. 12. Reserve Fund The Sponsor has budgeted for a yearly contribution to a reserve fund, to be funded out of Common Charges, equal to approximately 10% of the Condominium budget for the first year of operations. It is anticipated, but not guaranteed, that the budgeted yearly reserve fund will be sufficient to pay for major capital repairs or replacement items that may be needed within the first five years of Condominium operations. However, no warranty or representation as to the need for, or timing of, future capital improvements is made to Unit Owners or the Board of Managers. * * * * The Sponsor has reserved the right to modify, renew and replace existing service, maintenance, employment, other agreements and insurance policies, and to enter into new agreements and policies that will be binding on the Condominium on th

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by the Sponsor or the Sponsor’s inability to close; and an additional $500 fee if the Purchaser assigns his, her or its Purchase Agreement. o Working Capital Fund Contribution: The Purchaser will be required to pay an amount equal to three month's Common Charges as shown in Schedule A, above, to provide the Condominium with a working capital fund. This amount will be kept separate from the general funds of the Condominium and will not be refunded. It is not an advance payment of a Unit's monthly Common Charges. During the period in which the Sponsor is in control of the Board of Managers, these funds will not be used to reduce Common Charges. o Purchaser’s Professionals: The Purchaser shall have sole responsibility for payment of all professionals, including attorney(s), retained by the Purchaser. Based on the information above, the closing costs for a Residential Unit with a purchase price of $1,399,000 and a mortgage of $1,119,200 would be: Owner’s Titl

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ay, all expenses to operate the Building based on the actual costs of operating the Building, including, without limitation, insurance premiums and reserve fund payments, instead of on the estimates set forth in Schedule B. Such expenses, however, shall not include individual Unit Owner expenses such as, but not limited to, real estate taxes and utility charges consumed within the Units. Therefore, during the Waiver Period, Schedule B will not be in effect and the level of services to the Building described in the Notes to Schedule B will not be fully in effect. In all instances, however, including during the Waiver Period, Unit Owners will remain responsible for the payment of real estate taxes applicable to and utility charges consumed within their Units, regardless of whether the Units have been separately assessed. Sponsor will terminate the Waiver Period upon thirty (3) days’ prior written notice to Unit Owners, after which the Schedule B and all Building services

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tion income to the extent that such income exceeds expenses properly allocable to such income . Examples of the latter include interest earned on reserve funds, amounts received from persons who are not members of the Condominium, amounts received from work done on privately owned property that is not Condominium property and amounts received from Condominium members for special use of the Condominium’s facilities, the use of which is not available to all members as a result of having paid the dues, fees or assessments required to be paid by all members. In the event that the Condominium does not qualify for, or chooses not to make, the election under Code Section 528, the present state of the law is uncertain as to the proper reporting and tax treatment of the income of the Condominium derived from Unit Owners (“membership income”) and others (“nonmembership income”) in excess of appropriate deductions and credits. It is possible that the Condominium could be viewed

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113 RESERVE FUND The Sponsor has budgeted for a yearly contribution to a reserve fund, as set forth in Schedule B. It is anticipated, but not guaranteed, that the budgeted yearly reserve fund will be sufficient to pay for major capital repairs or replacement items that may be needed within the first five years of Condominium operations. However, no warranty or representation as to the need for, or timing of, future capital improvements is made to Unit Owners or the Board of Managers. Article V, Section 1 of the By Laws authorizes Common Expenses to include a reserve fund. While Sponsor controls the Board of Managers, the reserve fund will not be used to reduce Common Charges. Neither the Department of Law nor any other government agency has passed on the adequacy of the reserve fund. The Board of Managers may augment the reserve fund by allocations from the monthly Common Charges or by special assessments. Capital expenditures may also be finan ced

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adjustments. If the result of the closing adjustments is a net credit in favor of the Condominium, the Sponsor shall make a contribution to the working capital fund in the amount of such net credit. If, however, the result of the closing adjustments is a net credit in favor of the Sponsor, same will be paid to the Sp onsor by the Board in twelve (12) equal consecutive monthly installments pursuant to the terms of twelve (12) negotiable serial promissory notes to be executed by the Board at the first Closing. The first of these serial promissory notes will mature two (2) months after the date upon which the first Closing takes place and the balance will mature monthly thereafter. Each serial promissory note will contain a provision allowing the Sponsor to accelerate the note's maturity date in the event of a default under any other serial promissory note, in which case interest shall be due and payable on the compound sum of the lesser of 16% per annum or the highest r

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ch closing adjustments made as of and in the post-closing amendment to this Plan. The Sponsor makes no guarantee or representation of any minimum working capital fund after adjustments, if any, are made with the Condominium. MANAGEMENT AGREEMENT, CONTRACTS AND LEASES First Class Management, Inc., with an address at 102-10 Metropolitan Avenue, Forest Hills, NY 11375, will manage the Building for the first year of Condominium operations. After termination, the Board of Managers may select another managing agent or may self-manage the Building. The Managing Agent is not affiliated with the Sponsor or any of Sponsor’s principals. The management fee for the first year of Condominium operations will be $19,800. The Managing Agent, or if the Building are self-managed, the Board of Managers will perform the following duties, among others: (a) cause the Common Elements to be operated and maintained as required by the Board of Managers; (b) cause to be hired, paid and

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s," including, if applicable, the amount of any credit for mortgage tax as set forth in said Section. P urchaser shall make the contribution to the working capital of the Condominium referred to in said Section. Real estate taxes and Common Charges and expenses shall be adjusted between Seller and Purchaser as of midnight preceding the Closing Date in accordance with the provisions of the Plan. In the event real estate taxes shall not have been levied against the Unit, then real estate taxes shall be apportioned based on the real estate taxes payable with respect to the Property multiplied by the percentage of Common Interest attributable to the Unit. Purchaser will pay the New York City Real Property Transfer Tax and New York State Real Estate Transfer Tax attributable to the delivery of the deed hereunder, as well as the Mansion Tax and/or Supplemental Tax, if applicable. ANY SUCH EXPENSES OR ADJUSTMENTS PAYABLE TO SELLER IN EXCESS OF $500 WILL BE PAID BY CERTIFIED CHEC

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ollection and disbursement of funds, including reserves, to provide for major and minor maintenance, repairs, additions, improvements, replacements, working capital, bad debts and unp aid Common Expenses, depreciation, obsolescence and similar purposes, provided, however, that (i) such debt is incurred no earlier than the fifth anniversary of the first conveyance of a Unit and (ii) the incurrence of such debt shall require the consent o f a majority of all Unit Owners in Common Interest; and in connection with such borrowing, to give such security interest as may be permitted by law. (o) Borrowing money on behalf of the Condominium when required in connection with any matter not include d in the preceding paragraph, provided, however, that no lien to secure repayment of any sum borrowed may be created on any Unit or its Appurtenant Interests (as defined in Article VII, Section 1(a) of these By -Laws) or on the Common Elements without the consent of all of the Unit Owners.

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ch amounts as the Board of Managers may deem proper for the operation and maintenance of the Property, including, without limitation, an amount for working capital of the Condominium, for a general operating reserve, for a reserve fund for replacements, and to make up any deficit in the Common Expenses for any prior year, (ii) such amounts as may be required for the purchase or lease by the Board of Manager or its designee, corporate or otherwise, on behalf of all Unit Owners, of any Unit which the Board of Managers decides to acquire and lease pursuant to these By -Laws, (iii) such assessments as are necessary to provide funds for other Condominium purposes including, without limitation, capital improvements to, and repairs and replacements of Condominium real or personal property, the acquisition of real or personal property on behalf of the Unit Owners, and expenses which were not anticipated at the last time Common Expenses were determined, and (iv) if Units have not been

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the Board of Managers, or its designee, on behalf of all Unit Owners and payment of the costs and expenses associated therewith may be made from the working capital and Common Charges in the hands of the Board of Managers, or if such fund are insufficient, the Board of Managers may levy an assessment against each Unit Owner, excepting the Unit Owner of the sold or leased Unit, in proportion to s uch owner's interest in the Common Elements, as a Common Charge, which assessment shall be enforceable in the same manner as provided in Sections 5 and 6 of Article V, or the Board of Managers, in its discretion, may borrow money to finance the acquisition or lease of such Unit (together with associated costs and expenses), provided, however, that no financing may be secured by an encumbrance or hypothecation of any property other than

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alterations or improvements and shall assess each Unit Owner his, her or its proportionate share of the cost as part of the Common Expenses or as a special assessment, or shall pay for the addition, alteration or improvement from reserves accumulated for purposes of same or shall borrow funds to pay therefore as described below. Additions, alterations or improvements costing $15,000 or less may be made by the Board of Managers without approval of Unit Owners and the cost thereof shall constitute part of the Common Expenses. Whenever in the judgment of the Board of Managers, in connection with the operation, care, upkeep and maintenance of the Common Elements, money must be borrowed on behalf of the Condominium, no lien to secure repayment of any sum borrowed may be created on any Unit or its appurtenant interests or on the Common Elements without the consent of all of the Unit Owners. The Board of Managers may only borrow money on behalf of the Condominium when requir

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ed on the adequacy of the reserve fund. The Board of Managers may augment the reserve fund by allocations from the monthly Common Charges or by special assessments. Capital expenditures may also be finan ced by borrowing money pursuant to the provisions therefor in the By Laws. WORKING CAPITAL FUND AND CLOSING ADJUSTMENTS WITH THE CONDOMINIUM BOARD Working Capital Fund A Purchaser shall contribute three months' Common Charges at the time of Closing on his, her or its Unit. The Sponsor will not contribute to the working capital fund for the Units held as Unsold Units. The working capital fund may be held or used for working capital, to make repairs or for such other appropriate purposes permitted under the By-Laws as will be determined by the Board, in its sole discretion. For so long as the Sponsor is in control of the Board, the working capital fund will not be used to reduce Common Charges. No representation is made that the working capital fu nd

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alterations or improvements and shall assess each Unit Owner his, her or its proportionate share of the cost as part of the Common Expenses or as a special assessment, or shall pay for the addition, alteration or improvement from reserves accumulated for purposes of same or shall borrow funds to pay therefore as described below. Additions, alterations or improvements costing $15,000 or less may be made by the Board of Managers without approval of Unit Owners and the cost thereof shall constitute part of the Common Expenses. Section 14. Additions, Alterations or Improvements by Unit Owners. No Unit Owners shall make any addition, alteration or improvement in or to his, her or its Unit which is structural or which affects the value of other Units or which affects the exterior of the Building, without the prior written consent thereto of the Board of Managers (and if requ ired, of his, her or its mortgagee ). The Board of Managers shall answer any written request by a Uni

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0 Recording fees $200 New York City transfer tax $20,300 New York State transfer tax $5,675 Mansion Tax $14,190 Sponsor’s attorney’s fee $2,500 Working Capital contribution $1,650