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Our co-op is currently proposing reducing our flip tax and have included closing costs before the flip tax is calculated. They have defined closing costs as all fees and transfer taxes paid by the seller at closing. They include: broker fees, seller attorney fee, co-op attorney fee, city and state transfer taxes, loan satisfaction fee, UCC-3 filing fee, NYS equalization fee, deed transfer fee, co-op stock transfer tax, any co-op processing or move out fees."
When asked if there would be a cap on certain fees, such as attorneys' fees, we were told there was none and it was not the co-op's business.
Do other co-ops allow all these deductions and, if so, is there a cap on them, particularly on those that are not fixed?
Thank you.
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We do our flip tax based simply on a $$ per share basis. It makes things much less complicated.
Having said that, I agree that the co-op can't limit attorney fees and other similar charges. Those charges are set by the attorney and banks and have nothing to do with the co-op. It IS none of the co-op's business.
However, if your Board wanted to limit those fees as far as incorporating them into a flip tax formula, that would seem to be within the jurisdiction of your Board.
Perhaps your Board should look into making life easier by comparing your present flip tax calculation with a flip tax based on $$ per share. The difference may be small enough that it's just easier for all if you do it on a $$ per share basis.
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