One 'Win' for Co-ops and Condos

The Bay Terrace Community Alliance joined two local council members in cheering the federal government's decision Tuesday to preserve private transfer fees, also known as “flip taxes,” for condo and co-ops.

"It's good to win one," said Bay Terrace Community Alliance President Warren Schreiber.

An initial proposal by the Federal Housing Finance Agency would have forced condominiums and cooperatives to eliminate the fees, which go toward maintaining their properties.

But, on Tuesday, the agency announced it would make an exception for condos, co-ops and homeowners associations.

"This rulemaking, which addresses comments received on a previously proposed guidance, would limit Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from dealing in mortgages on properties encumbered by certain types of private transfer fee covenants and in certain related securities," explained FHFA in a statement.

Councilman Mark Weprin, D-Oakland Gardens, said condos and co-ops use proceeds from the fees toward the upkeep of their facilities. 

Weprin also said the inability of a property to charge the tax upon the sale of an apartment could force some co-ops to assess their shareholders and residents hundreds of dollars more on a monthly basis

Councilman Dan Halloran, R-Whitestone, said the tax’s elimination would have negatively affected co-op and condo owners, many of whom live fixed incomes.

“The fees pay for capital improvements that would otherwise be a huge burden to the seniors and working class families that live in my district’s many cooperatives,” he said. 

Little Neck Editor Paul Leonard contributed to this story.