At a general meeting of our condominium, a proposal for a flip tax/transfer fee
on the sale of a unit failed to get enough votes. Subsequently, the board of
managers decided to impose a transfer fee of five months maintenance charges to
be split between the buyer and the seller. The bylaws of the condominium have
no provision for a flip tax or a transfer fee. Can the board of managers do
this without a change in the bylaws?
—Law Abiding Citizen
“Generally, condominium bylaws empower the board of managers to make certain
financial decisions without the unit owners’ vote,” says attorney Pierre Debbas of Romer Debbas LLP. “Mainly this authority consists of determining the condominium’s budget, the amount of common charges required to meet the condominium’s budget and also the necessity of any increases in common charges or
implementations of assessments. It is probable that your bylaws will permit the
board to impose fees on the sale of a unit, but those fees should be limited to
administrative, professional, legal or other expenses that the condominium
and/or its managing agent incur due to the sale of a unit.
“Since a flip tax is primarily a revenue producing mechanism that pertains to
co-ops, most condominium bylaws do not address your question specifically.
However, the condominium bylaws should state that any additional fees (not
listed above) that are imposed on a sale must be approved by a vote of the unit
“Real Property Law § 339-u, states that a condominium must be governed by the bylaws and no
modification of or amendment shall be valid until such amendment is recorded.
The board’s unilateral enactment of the “transfer fee” was done in light of the requisite number of unit owners voting against the
flip tax; and the board in doing so appears to have exceeded its authority
given to it under your by-laws.
“Given that your bylaws have no specific provision permitting for a flip
tax/transfer fee combined with the fact that the unit owners voted against this
proposal, the board of managers more likely than not has violated RPL § 339-u and the enactment of the “transfer fee” should be repealed.”