For how long can a board prevent a sale?

This is confusing to me because in an HDFC the original offering documents should already have that flip tax delineated.

It's in the 25 year agreement not the offering plan, thus only relevant for a finite period.

Call the NY Bar Association. They will recommend a few lawyers. You are entitled to a half an hour consultation for $35.00. Sometimes a lawyer will give you a free consultation over the telephone.

You could also go to the law library at 80 Center Street and check to see if there are any past cases that are similar to yours. The people working there can be very helpful.

I am surprised that it's not in the offering plan as well as the agreement because in all of the HDFC coops where we have bought units it was. What is the sunset date on the 25-year agreement?

PS in the HDFC agreement were there one flip tax or two? Usually there are two: one which goes to the coop and one which goes to HDFC.

At least a quarter of the buyers I work with are looking for an HDFC apartment north of 110th st. The first piece of advice I offer is that HDFC's as a group tend to be far more difficult to purchase than a market rate co-op. The situation you describe regarding flip taxes is a good example of the types of challenges that a lot of buyers/sellers might encounter. The regulatory agreements have expired or are about to expire in most cases- leaving the board to make decisions that they previously didn't need to spend time thinking about. A Flip tax of 30% is fairly typical and the most common number that I encounter for upper Manhattan HDFC's. I don't generally encounter too many buildings that still have to pay the city their portion of the flip taxes. As to your question- your friend should be consulting with a real estate attorney who might be able to move the process forward.

The issue of reinstating an expired flip tax in HDFC coops is a battle of conflicting interests between the old guard who see their ownership as "for life" and those who see their purchase as an investment and think their ownership as transient. If some non-HDFC coop board tried to impose a 30% flip tax people would lose their minds. In the current instance it seems like the board is trying to hold current shareholder's hostage until they agree to a huge flip tax. Their motivation is that these large flip taxes are like a ransom to allow shareholder's to sell. The money directly goes into the Co-op's operating fund and allows them to keep maintenance low. Unfortunately many boards get addicted to this "free money" and rather than using the funds for necessary capital projects they use it to cover operating costs. Then at some point they both have no sales (and no flip taxes collected) for a while and find themselves faced with a relatively expensive capital project which can no longer be ignored and thus face the prospect of having to increase maintenance by a large percentage, assess the current shareholders, or both.

Thanks for all these responses. 30yrs I think there is something truly accurate about your analysis with regards to my friend's building. However from what I'm hearing, a number of people who don't plan to ever sell are not in favor of reinstating the flip tax at the hpd rate. It's the people who want to sell who are voting for it because they want to be able to proceed. I agree that preventing sales is a high stakes game. On top of your points, it's also likely to skew votes regarding the sublet policy.