CHICAGO (CBS) — Some homeowners from a South Side building were furious after voting to sell and agreeing to move within 90 days, but learning after the sale closed that a quarter of the proceeds won’t be coming their way for years, if at all.
CBS 2 Morning Insider Lauren Victory takes us inside the deal that has many saying they were duped.READ MORE: Cook County To Release 35,000 COVID-19 Vaccine Appointments Tuesday Afternoon
Towering over Drexel Boulevard for more than 70 years, Tudor Gables is home to a lot of history; and these days, emotions.
“You know, you gotta go,” said Cassandra Dixon, an owner in the building.
From choking up to squaring up, CBS 2 cameras were there when tempers flared between a board member and a resident. Their frustrations come from a recent sale of the building.
“It’s deception. It’s no transparency,” Tytus Cousins said.
Cousins showed CBS 2 the price estimate shared with residents before the board voted for or against selling their building.
“They [board members] were explaining to us that, you know, this was an opportunity for a lot people to cash out,” Cousins said.
The vote went through, then came the sale and everyone’s receipts.
“I was really shocked when I opened that email to see that they were going to take 40 percent of the earnings,” Cousins said.
Cousins expected around $89,000 for his unit, but his receipt showed a nearly $37,000 deduction.
CBS 2 was told it’s part of a $3 million holdback from the $11.5 million sale for possible capital gains tax on the building.READ MORE: Four People Arrested After Car Stolen In Pullman Carjacking Spotted In Chatham
“We’re really hurt by the board and their not being transparent, because they did not let us know any of this,” Dixon said.
They can get what’s left after taxes, but it might take three years because of an IRS statute of limitations.
“Who is guaranteeing to be living in three years?” said William House, another owner in the building.
Then there’s another problem.
“We need the money now, because we need to move,” Dixon said.
Many residents already went under contract for new homes, but are left in the lurch, with tens of thousands of dollars less than expected.
CBS 2 asked a board member on site and the board’s lawyer for proof that owners were told about the tax holdback before they voted.
The attorney couldn’t provide it, and the board member declined to comment when asked if they knew where it is.
“I’ve been in real estate 15 years. I’ve talked to three lawyers. No one has ever heard of this,” Cousins said.
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Paperwork CBS 2 obtained did indicate that price estimates for each unit were pre-tax, but the Board’s attorney readily admitted the full amount of holdback wasn’t disclosed to residents until after the sale.