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Showing posts from November, 2015

FLIP TAXES

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Legal Line Question of the WeekFlip TaxesI am representing the owner of a co-op apartment that is  in the process of selling her apartment.   The co-op  board has just implemented a flip tax (the "Flip Tax")  and the seller is concerned that the Flip Tax is  going to decrease the value of her apartment.   What are the steps that a co-op board must follow  in order to implement a Flip Tax? Will the seller have  to pay the Flip Tax when she sells her apartment? A Flip Tax is a fee that a co-op charges (usually to the  seller) upon the sale of the apartment. The general  purpose of the Flip Tax is to increase revenue for  the co-op without raising monthly maintenance fees.  The origin of the Flip Tax dates back to the early days  of co-op conversions when investors were buying  co-ops (with no intention of living in the co-op)  and then flipping" the apartment for a profit.  The Flip Tax was a way for the co-op to get a share  in the investor's profits.  In some cases,  condominiums hav…