Legal Question in Real Estate Law in New York
Confiscatory Coop Flip Tax
Coop has a flip tax of 40% of net profits. This seems exorbinant, confiscatory and excessive, more so in this time of rising values. Clearly we will check for proper statutory authority (proprietary lease, bylaws), and also include whatever is proper into the basis from the coop allocation of capital improvements, as well as any personal additions that are proper to add to the basis (if any).
However is there any possible legal recourse on the confiscatory aspect of the flip tax?
It could be as much as 100K on the one sale.
Thanks so much.
2 Answers from Attorneys
Re: Confiscatory Coop Flip Tax
That is very steep. It would be an interesting issue to research however your first recourse would be to try to overturn it through a vote of the shareholders.
Feel free to contact me should you wish to discuss this further.
Kind regards,
Peter Moulinos
Re: Confiscatory Coop Flip Tax
I basically agree with Mr. Moulinos. I would add, however, that if you could not change the policy from within, you would be even less likely to succeed in litigation. Presumably, the purchase price was adjusted to reflect the restriction when you bought in.
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