V - "Selling" the flip tax to greedy, apathetic or uncaring Shs is no easy job. A few ideas. Tell them:

- Flip tax proceeds can enable you to do a key project more quickly (any maybe at lower cost) than if you have to delay it until you have adequate funds for it.

- Flip tax proceeds for projects you'll have to do in, say, 3 to 5 years can be invested and accrue additional money in interest or dividends.

- All Shs can benefit from a flip tax because improvements can be made that will enhance bldg value and make it a more desirable property which can help Shs get a higher price for their apts when they do sell.

- Along with notes in annual financial statements, the coop will inform Shs periodically on how flip tax proceeds are being used to improve the property and how this helps them.

- Flip tax reduces capital gains they'll pay on their sale profit. (I know bldgs that push this idea and I'm not sure if/how it works, so check it with your coop accountants!)

Don't try to win over Shs who may sell in a year. All they see is a flip tax cutting into their profit. Don't try to sell the idea in one meeting or memo. Keep a flow of info going. BTW, you don't necessarily have to get it voted in at one meeting. A Prop Lease can be amended with Sh written approval over a period of time (30 or 45 days), but don't make it too long or you'll lose Sh interest and momentum.

If it works for you, tell Shs in a letter what improvements cost since 2000 and what flip tax proceeds since 2000 would have brought in. They should be for capital projects, not paying bills, but here's another way to make your point. Do a little calculating and tell Shs what proceeds on sales in the last, say, 5 years could have paid for, for ex:
- 55% of the elevator upgrade, or
- 100% of whatever, or
- 80% of the coop's annual NYC taxes, or
- The super's salary for two years

In most bldgs, the seller pays the flip tax but a seller can stipulate in a sale contract that the buyer would pay the flip tax. Then the coop works this out with the seller so that the flip tax money goes to the coop and the seller doesn't just pocket it.

Also, you can have "a variable impact flip tax" for more fairness to some Shs. Business Corp Law (BCL) permits this.(I saw this in The Cooperator.) Your flip tax, for ex, can be a % of the sale price as long as that price is more than what the seller originally paid. Or a seller who makes no profit on his sale can pay a lower flip tax amount. But terms like this must be spelled out in the language of the amendment that incorporates a flip tax into the Prop Lease.

But the more fair you try to be to some, the more unfair it seems/is to others. Per the BCL, a coop must treat all Shs fairly and equally. Fairness has a way of working itself into knots, and the more disparity or accomodation Shs see the more resistance or complaints you may get. It's touchy.

Just a comment on something Anonymous said: "A coop is in the business of habitability." I know what you mean, Anon, but I think a coop is in the business of selling shares in its corporation and working to increase their value. Every corporation has products or services and wants to attract buyers who want to invest in the success of those products or services. A coop's "product" is a residential bldg. How habitable it is (i.e., how acceptable it is to live in it) is a big part of how good that product is. But there's a lot more to it - rules, management, board effectiveness, financial stability, good communication, Sh attitudes and willingness to cooperate and live as peaceably as possible with others - even bldg location, size, staffing, etc. I think a coop's business is value enhancement, in all the fair, legal, responsible, resourceful, and promising ways it can accomplish that. Just my opinion.