Frequently Asked Questions – Buyer
Q. What is SBT’s Sublet Policy?
A. Tenant-Shareholders may sublet the Apartment for no more than two (2) years out of any five (5) year period with a two (2) year gap period in between sublets.
Q. Are there any additional Fee’s associated with Subletting?
A. YES – Tenant-Shareholder shall pay to the Apartment Corporation a sublet fee in an amount equal to fifty (50%) percent of the annual maintenance then allocated to the Apartment, payable on a monthly basis. (Example: Monthly Maintenance = $600.00 | Monthly Sublet Fee = $300.00 – Total Monthly Maintenance Fee = $900.00).
Q. What’s the Deal with the Flip Tax? (Transfer Fee)
A. The Tenant-Shareholder shall pay to the Apartment Corporation a Transfer Fee (or Flip Tax) in an amount equal to twenty eight percent (28%) of the gross sales proceeds in the event of a sale or twenty eight percent (28%) of the fair market value of the Apartment as determined by an appraisal made by an independent MAI appraiser selected by the Board of Directors, in the event of a gift transfer in connection with the first transfer or sale of the shares of stock allocated and Proprietary Lease appurtenant to a particular Apartment in the building (each an “Initial Sale”) and equal to two and one half percent (2.5%) of the gross sales proceeds in the event of a sale or two and one half percent (2.5%) of the fair market value of the Apartment as determined by an appraisal made by an independent MAI appraiser selected by the Board of Directors, in the event of a gift transfer in connection with sales or transfers other than the first sale or gift transfer of the shares of stock allocated and Proprietary Lease appurtenant to a particular Apartment (each a “Subsequent Sale”).
Initial Sales (First Sale Only) – 28%
Subsequent Sales (All Sales after the First Sale) – 2.5%
(The 28% Transfer Fee only applies to the original owner selling the apartment for the first time)
Q. Is there Laundry in the Building?
A. YES – There is a newly renovated, card-operated Laundry Facility in each of SBT’s 9 residential buildings.
Q. What are the Annual Mortgage Interest & Real Estate Tax Deductions?
A. For the year ending December 31st, 2017 –
% of Shares Apt Size Mortgage Interest Real Estate Tax
16.25 0-BR $229.19 $2,046.48
19.50 0-BR w/ Balcony $275.02 $2,455.77
22.75 1-BR $320.86 $2,865.07
26.25 1-BR w/ Balcony $370.22 $3,305.84
29.25 2-BR $412.53 $3,683.66
32.50 2-BR w/ Balcony $458.37 $4,092.95
39.00 3-BR $550.05 $4,911.54
42.00 3-BR w/ Balcony $592.36 $5,289.35
*Present and past stockholders who were not stockholders of the Corporation for the entire year of 2017 are entitled to a proportionate share of the deductions for the period of their ownership.
Frequently Asked Questions – Seller
Q. What exactly is the Transfer Fee or Flip Tax?
A. The flip tax is a fee paid by the seller on a housing co-op transaction typically in New York City. It is not a tax, and not deductible as a property tax. It is a transfer fee payable upon the sale of an apartment to the co-op. Flip taxes are considered a method to help raise money for a co-op’s overhead expenses without raising the maintenance fees or assessing a flat charge to all residences. Charging the fee to those who are leaving the building seems to be the most politically feasible.
The SBT “Transfer Fee” or “Flip Tax” will be 28% on the first initial sale of your apartment. The “Transfer Fee” or “Flip Fee” will drop from the 28% level to 2.5% for the second sale of the apartment (and every subsequent sale thereafter).
Q. Can I leave the shares allocated to my apartment in my will to anyone who I wish?
A. There are very specific guidelines outlined in the Cooperative Offering Plan that you should be aware of –
1) Subject to Board Approval and the Apartment Corporation’s right of first refusal, you may seek to leave in your will the shares allocated to your apartment to anyone you choose. There is no guarantee that the Board will approve the proposed transfer. (Page 4, Number 1 at the bottom of the page in the Cooperative Offering Plan)
2) Except for transfers between a participating shareholder and his/her spouse or domestic partner, or to an adult child 18 years or older) who has been living in the apartment for at least 2 consecutive years, a transfer fee (flip fee or flip tax) 28% will be due at the time of the transfer (Page 17, middle of the page).
In the event the shares associated with you apartment are left to a grandchild or any other person named in the will, the board can reject occupancy! The heir will always keep his/her financial interest in the apartment and would be able to sell the apartment (Subject to approval by the Apartment Corporation and the Apartment Corporation’s right of first refusal) and keep the proceeds of the sale after paying the Transfer / Flip Fee and any additional costs of selling.
Q. As a Private Cooperative, can I legally sublet my apartment to someone else?
Cooperators may sublet their apartment (at current market rates) for a maximum of 2 years during any 5-year period subject to the conditions set forth in the new proprietary lease (Page 666-5.2).
The sublet fee is 50% of the annual maintenance which is payable on a monthly basis to the Corporation.
Frequently Asked Questions – Broker
Q. Are you a member of the Real Estate Board of New York (REBNY)? Also, what is REBNY?
A. YES (I have been a proud REBNY member since 2004).
As the Broker of Record (Owner) of Area New York, I am responsible for Area New York adhering to all rules and regulations put forth by REBNY. REBNY was created in 1896 as the state’s first real estate trade association. It works on behalf of the mutual interests of its members by promoting public and industry policies. Firms that are members of REBNY, the Real Estate Board of New York, sign on to an agreement that covers co-brokerage between all REBNY member firms.
REBNY’s members, and those affiliated with them, honor the Board’s Code of Ethics. The Code, which applies to all Board members, clarifies licensees’ responsibilities to their colleagues and the public. If an alleged Code violation involves an issue over money, the matter can be handled by voluntary mediation or binding arbitration. Non-monetary disputes are resolved by the Ethics Committees or subcommittees of the Residential Brokerage and Commercial Brokerage Divisions. For members of REBNY’s Residential Brokerage Division, the RLS Universal Co-brokerage Agreement Rules and Regulations supplement the Code of Ethics. Through members’ adherence to the Code and additional rules and regulations, where appropriate, REBNY provides fair treatment for all licensees participating in a transaction and protects the interests of buyers and sellers.
Q. What is the Commission Rate (Broker Fee) you offer to SBT residents? Is this negotiable?
A. 5% for SBT residents.
While 6% (percent) has been the “standard’ amount that brokerages charge for sales properties, there is not much of a difference between a 5% listing and a 6% listing from the perspective of the brokerage community. A commission amount less than 5% might adversely affect the outcome of the sale as it could discourage brokers with qualified buyer clients from showing them the property. Brokers expect a co-broke commission of 2.5% or 3% based on a total commission of 5% or 6%.
Department of State – Division of License Services: The commission or compensation of a real estate broker is not regulated by statute or regulation, therefore the amount and terms are negotiable. A real estate broker shall never offer a property for sale or lease without the authorization of the owner. Therefore, prior to the listing or marketing of a client’s real property, it is incumbent upon the real estate broker and the client to mutually agree on a reasonable rate of compensation.