FLIP TAXES: BOARD MEMBERS TELL HOW THEY PASSED THEM

 

 

Alisa Colley, president
10 units. Park Slope, Brooklyn
Proposed Flip: 1% of the sales price
Passed on second attempt

"[T]he biggest hurdle was not explaining to people about the flip tax, [but] getting people to fill out a form. And unfortunately because we did not have the paperwork back in time, our lawyer told us that, essentially, the vote was not legal, and so we had to hold another vote."

Lessons Learned: "We couldn't get people to respond by the time of the meeting."

 

Angela Hirsch, president
100 units. Forest Hills, Queens
Proposed Flip: 1% of the sales price
Did not pass

"We had various meetings in the lobby to discuss it. I sent out newsletters and put in all kinds of facts and figures and information, including [newspaper and magazine] articles … and spoke to people personally, and then got Bruce Cholst, our attorney, to try and help as well."

Lessons Learned: "There were too many people against it. There was just no way that I was going to [convince] them, no matter how hard I tried. People just felt that it was not appropriate, that it was not a way to raise money, and that it wasn't fair."

 

Howard Jintell, former director
57 units. 98th Avenue, Brooklyn
Proposed Flip: 1.25% of the sales price
Passed

"What we proposed is 1.25 percent of the actual selling price with no consideration for legal expenses, profit, length of residence, brokerage fees, or anything else. You sell your apartment for $1 million, you pay 1.25 percent in flip tax. It's neat, it's clean, it's simple, and it works because then we didn't have to determine what real profits were and your real costs and all the rest of that. We approved the flip tax because everybody recognized that it really wasn't going to hurt them at all. If I decide I want to net $1 million on my apartment, then I'm simply going to add 1.25 percent on top of it to cover the flip tax."

Lessons Learned: "What you want it to be is not only simple, which makes it understandable to everybody, but you want it to be fair. If something's based upon profit, it's not, in my mind, going to be fair. And the reason why it's fair and simple is because you determine what the flip tax is going to be, because you determine what your selling price is going to be.

 

Robert Mayer, treasurer
370 units. Long Island
Proposed Flip: 1% of sale price
Did not pass

"I sent out information, but there wasn't a very heavy campaign. We basically told everybody the benefits of creating this fund. We said that people who were leaving the property quickly, who recognized gains, should pay their fair share and let it come into the treasury so we could use it when we need to cover shortfalls in the budget. But there were plenty of people, maybe more than we thought, who were looking to leave within a two-year period from the property. Some of the real estate people, agents living there, said, 'This is going to affect the ability to sell.'"

Lessons Learned: "[Y]ou definitely have to go out and get the vote. Make the people understand why it's to their benefit to vote for it. In most places, you need a two-thirds-vote majority to pass a change in the offering plan. It's not the easiest thing to get. You have an awful lot of apathy in any neighborhood."

 

Eddie Tawill, president
242 units. Greenwich Village, Manhattan
Proposed Flip: 2% of profit
Did not pass

"The mistake we made was we [first] introduced it at our annual meeting. And prior to that we sent out mailings to shareholders, with our proxies. We put a line in there about voting for or against the flip tax. We had enough proxies to have our annual meeting, but what happened was a lot of shareholders did not vote."

Lessons Learned: "It was not a good idea to attach it to the annual meeting."