buying out ex

This is 100% a question for an attorney specializing in RE.

I agree with Kyle.

And as a board member myself, I'm inclined to tell you YES, a flip tax would be due.

Not only that, your board will be expecting a brand-new board package, and you'll have to go through the approval process all over again.

All you have to do is contact the coop's attorney. In cases such as this and in cases where a coop owner changes apartments within the coop the flip tax either is waived or does not apply. In the case of divorce and buy out it would suprise me if a flip tax applies. Imagine someone loses a spouse and the title is transfered to the surviving spouse...flip tax??? One phone call tells the tale.

why not ask your ex to split the tax.

Thanks for the responses. I was once a board member here. with respect to falcogold1's issue, our coop would not charge to transfer ownership when consideration is not being paid. however the story i am getting is similar to NYCmatt's comments. it is if i was not already an owner for this question.

Julia, if i do buy her out, i will try to do something equitable as you suggested.

The answer, as you seem to realize, would be guided almost entirely by the coop's by-laws. Flip fees are created by the coop and guided by the rules that created them. That is why any answer here is unlikely to be of much assistance to your particular situation.

"it is if i was not already an owner for this question."

You are not an owner. You are a PART owner. The other part owner is selling his/her shares to you. When you originally approved by the board, it was as a unit of two individuals. The structure of that ownership is now changing. The co-op board needs to determine whether it's in the best interest of the corporation to allow this new structure.

NYCMatt, you're making a pretty compelling argument for not buying in a coop....

nycmatt,i understand their need to approve of the sale with a package and collect a flip tax on the 50% i don't already own.

what happens in the case of a death and leaving the apt to the child? Is there a flip tax due? Also what happens if the child cannot pay the maintenance easily and does not have the liquid assets as would be required for a new owner? Are they required to sell?

a coop is not obligated to take on as shareholders people it has not approved. that includes heirs. individual coops may have spins on this general principal in by-laws. it protects residents. if you don't want that protection, among others, a coop is not for you. they are not for everyone. by the same token, many perceived benefits of a condo are strong negatives for some people--myself included. why do people try to villify one form over another? no one HAS TO live in either.

coops suck - that easy

Agree with Anon and JohnDoe...it sounds like having to navigate the internicene waters of a 13 year old girl's social clique, and about as catty. What other purchase do you spend $1.5M just to have someone tell you at every turn how youre not following the rules. You know what? I've got your "rules" right here in my pants, buddy...

You keep a bible in your pants?

"what happens in the case of a death and leaving the apt to the child?"

That's easy, Skippy: According to Matt's coop's rule, this death will need to be approved IN ADVANCE by the board...also, you'll need to pay a transaction fee to get the person from this life to the afterlife.

Any unauthorized deaths not approved by the Coop Board at least six months in advance can result in expulsion from the building. Please note that the "death request" paperwork must be completed 6 months in advance, although the Coop board will not be required to act on it until they are good and ready (generally, about 7 weeks after they promised they would). In addition, the paperwork must specify "intended cause of death". Only certain types of death will be approved. You will not be allowed to die of any cause of death that could possibly impose liability on the Cooperative...

"Agree with Anon and JohnDoe...it sounds like having to navigate the internicene waters of a 13 year old girl's social clique, and about as catty. What other purchase do you spend $1.5M just to have someone tell you at every turn how youre not following the rules. You know what? I've got your "rules" right here in my pants, buddy..."

Thank you for not burdening us with your application, and enjoy renting!

"enjoy renting!"

I do. I sold just before the crash, will buy after things bottom out. Figure i'm ahead of you by $300K, after transaction costs.

Dwayne, I'm sure we have our disagreements, but that was one of the most hilarious posts I've read here.

Thank you, AR. Very big of you to compliment someone who harangues you.

Didn't recently have a thread about someone who was preparing his board package for an apartment he was inheriting (the concern there was whether he needed to include his partner who he did not want to include on the stock ownership but who would be in residence)? I also recall a friend having to go through board review before he could take over his father's place (pretty humiliating since he had grown up in the building). So I gather its common practice for heirs to have to be approved by the board when they inherit a coop.

wantnewhomein2010, I've known a case where something like "gifting" was used. It's a perfect case for a good lawyer/estate planner, preferably in one person.

Can the board accept maintenance payments from an "unapproved" heir?

"Can the board accept maintenance payments from an "unapproved" heir?"

Oh, yes maam! The board can always TAKE your money. What they aren't so good at is letting you get YOUR money out of the place by selling...

good to know, thank you maam.

Your welcome, ma'am. LOL.

"Oh, yes maam! The board can always TAKE your money. What they aren't so good at is letting you get YOUR money out of the place by selling...

Not true at all.

The heir is more than welcome to keep all the money from the sale of the co-op (unless, of course, he'd like to "gift" some or all of the proceeds back to the co-op).

It's all this confusion that drives people to commit unspeakable acts. I know a couple that were in the process of an amicable separation leading to a very highly functional divorce and it was the flip tax on their coop that drove them to insanity. When it was all said and done both were found dead of gun shot wounds to the heart and a Manatee was found, still alive, in their lavish custom bathroom Jacuzzi. The Manatee remains unexplained to this day.

Jeez Matt, do you have a contest with your roomates to see who can hold a pencil between his butt cheeks for a while day?

LOL, Falco. A manatee, eh? Many men marry 110 pound women who start to resemble manatees by the time the divorce arrives!

Lend your wife the money........ then foreclose on her. In most Proprietary Leases, usually paragraph 17, has some form of "No Board approval on foreclosures". And before someone chimes in and says you can't foreclose because you didn't get the loan approved by the Coop and there was no recognition agreement, this was already tried (a borrower tried to claim that she could be foreclosed on because there was no recognition of the loan by the Coop - it was at 69 W 9th St. Boy I used to know the names of all these cases off the top of my head... getting old sucks) and lost (i.e. the court ruled you didn't need a recognition agreement to foreclose; and remember, it's the BANKS who require the recognition agreements, not the Coops).

NB: I'm not being totally serious about this, but throwing it out there as an example of creative ways to get around over-reaching entities.

falco: I own a pair of stingray boots, which people always ask about and my answer is "these boots killed Steve Irwin".

Hi, I totally agree about seeing a RE lawyer and tax accountant, however I would like to know a little more information as I really don't believe it is at all fair that you pay the flip on more than half the contract price.

If the flip tax (more accurately described the "transfer fee" by CNYC (Council of NY Co ops and Condos) is the more common mechanism of generating revenue: by setting a percentage of contract price being charged, then I don't understand why your contract wouldn't read, contract price (the sum that is half the value) times by the set transfer fee, thereby you only paying half.

I know some buildings charge a set fee for a flip tax (doesn't matter if you have a studio or a 3 bedroom the fee is the same), however I am assuming this is not the case for you (that would be harder to get out of)

Also I find the fact that you are NOT exiting your building (the flip is also sometimes called the exit tax) is even more compelling for you NOT to pay for the 50% part that is not exiting. I know of quite a few enlightened buildings who actually aim to be "cooperative" with there Co Op members, IE They do NOT charge ANY exit (flip) fee when the member is moving even to another apt in the building as they are not exiting the co op.
I believe your case is even more solid than the above example and still unfortunately if the law is in the building by laws I understand that the Board has the right to enforce it. If on the other hand it is not in the by laws (which I would check the paragraph on Flip taxes) then I would be presenting my case to the Board and letting them know it is there choice and what would they like to happen to them if they were in this case, and that a law has not been passed predetermining the decision.
Good luck

.

Gabrielle, the coop is fine with structuring it the way you suggested. at the same i posted this, i took a similar approach to your last paragraph suggestion and this is where we came out. and with my ex, anything more creative is likely to backfire. paying the flip tax on her portion is probably the easiest solution, which I will factor into the price. In our building the buyers pay the flip as well. this is semantics for the most part in the current market because a buyer just basically subtracts the amount from his offer or contracts it back to the seller. my goal is to make any contract with her, not end up in litigation.

thanks for your suggestion

30yrs_RE_20_in_REO, thanks for your suggestion. I like your creativity.

have her sell it to you for a dollar, pay the flip tax on a dollar, and give her the equivalent in cash, which is what you would be doing anyway. Real estate transfers between husbands and wives are seen in the real estate transfers all the time for a dollar, likewise it should be well known for a coop.

Skippy thanks. the problem comes up with the getting a mortgage. If everything is disclosed the coop will understand the need for a new mortgage to cover the existing mortgage + paying her equity share to share in cash. otherwise it looks like i am taking cash out of deal (which may be necessary to pay for this).

i might try to structure the deal discussing the value of her equity only and not discussing the consideration of the assumption of her portion of the debt to show the value of the contract.

No, the first problem is getting the coop to approve a $1 sale. Maybe if you bring the Board fresh-baked cookies ... ?

I think it's outrageous to pay a flip tax in the instance. You already own the whole apartment jointly, and are merely removing her name from the title. You have "joint tenancy" not "tenants in common". This sounds like a shake down to me.

after you buy the place for a dollar you own it. You can then take out a refinancing mortgage and pay off your old mortgage in the meantime. You use the cash for anything that you want, ie, paying off the soon to be ex.

it is a shakedown. But since they must approve the transaction it is also the cost of doing business. Coops certainly come with some baggage.

That's very accepting of you. I would lobby against.