Cohousing-L Mailing List: Transfer fee question

[David Heimann (heimann]

Hello Everyone,

	At Jamaica Plain Cohousing, we are once again taking up the transfer 
fee paid by a seller to the community when selling a unit.  Two main questions 
have come up, and I'd like to find out how others with a transfer fee have 
addressed them:

1.  Motivation for a transfer fee -- Two motivations come up for having a 
transfer fee, which would lead to different ways in which it is assesed.

	The first motivation is as a charge for services that the 
community provides to sellers, such as maintaining an interest list, 
providing regular tours of the community, sustaining potential buyer 
interest, showing the offered unit to visitors, maintaining name 
recognition by participating in the larger community, etc.

	The second motivation is as a recognition of the value added to 
the market price by the community's fostering a sense of cooperative 
spirit beyond that of a routine condominium development, and a payback 
by the sellers for the personal benefit they have obtained from this 
while they have lived here.

	The first motivation would lead to a transfer fee that would be a 
straight "charge for services rendered", while the second motivation would lead 
to a "share of the value added by our being a cohousing community."

	So question 1:  To those with a transfer fee, which motivation drives 
you and why, and which style of fee do you have?


2.  If the motivation is to share in the value added -- There are two ways to 
determine this share.  One is to charge a percentage of the sale price, while 
the other is to charge a (higher) percentage of the profit realized by the 
seller.  In the case of the latter, the profit would be the sales price of the 
unit minus the purchase prices adjusted from the year of purchase to the 
current year (either by using the Consumer Price Index or the index of 
condominium prices in the city or town where it's located).

	The main difference between those two approaches is that basing the fee 
on the sales price would have the same impact on those who are selling after a 
short time in the community as on those who are selling after a long time 
living here, while basing the fee on the profit would have more of an impact on 
a short-timer than on a long-timer, if prices have been rising over time (and 
the reverse during periods of time when prices have been declining).

	So question 2:  If your transfer fee is based on either the sale price 
or the profit, which one is it and why?


        Thank you for your thoughts!

Regards,
David Heimann
Jamaica Plain Cohousing
Boston, MA


P.S. -- A third motivation (see question 1) is to promote an (the) 
affordability fund to help would-be buyers make purchases here or to 
help current unit holders having trouble with condo fees or assessments. 
Are there communities who have this motivation for a transfer fee?