There are several things that need to be considered by those considering purchasing or selling a parking spot or a locker in an existing residential condominium. As more and more of Toronto’s residents embrace the condo lifestyle, we receive more and more inquiries from clients looking to buy or sell parking spaces and lockers in those buildings.
Recently we had a client who sold their condominium but elected not to sell the parking spot they owned in the building. While it always important to review the specific condominium declaration and by-laws of the building in question, as a general rule most condo corporations prohibit the ownership of parking spaces or lockers to anyone who does not own a condo unit in the building. Our client was hoping to continue to use the parking spot they owned in the building as it was conveniently located, even though they no longer owned a residential condo unit. While we advised our client that the condo’s rules prohibited this, they informed us that their condo had been listed for sale with a separate selling price for the parking spot and the purchaser did not wish to pay for the parking spot as they did not need it. Within a few weeks of our client selling their unit, they received correspondence from the condo corporations solicitors letting them know that if they did not sell the parking spot to a resident of the building, or sell it to the condo corporation, an action would be commenced in the Superior Court of Justice forcing the sale of the spot back to the condo corporation. Our client listed the unit for sale on MLS and was lucky to find a resident of the building wishing to buy it.
More recently we acted for clients that purchased extra lockers from the builder of their condominium during the pre-construction phase. No longer needing them they privately found two separate buyers for the lockers and asked us to prepare the Agreement of Purchase and Sale as well as the closing documents. In this situation we asked them if we could review the condo declaration as well as the by-laws to confirm whether or not there was a prohibition on sale to non-owners. In this case there was, however we were also able to confirm that the purchasers were residential owners in that building.
The effect of buying a parking spot or locker in a building in which you do not own a residential condo unit, or selling to someone who is not an owner, can be costly. The condo corporation may institute court proceedings and force the sale of the parking spots or lockers. This is both costly and stressful.
Finally, one last thing to consider when buying or selling these parking spots or lockers is that in many ways it is no different than selling other condo units. Maintenance and realty taxes need to be adjusted for. This can at times be tricky. Many owners are unaware of how much of their condominium common element fees are attributable to their parking spot or locker units. However this is information that can be received from the property management company, or pulled directly from the condominium declaration which will list each individual unit’s, parking spot’s and locker’s proportionate share of the common element fees. More difficult, though, is getting an exact figure on the realty tax liability of a parking spot or locker as they are almost always baked in to the residential unit’s roll number. Inquiries can be made to the municipal tax office or to MPAC. Finally, because these units are often included in the realty tax account for the residential unit, it is always important post-closing to inform the municipal tax department that ownership of the parking spot or locker has changed and that they should be added to the new owner’s realty tax account so that the vendor does not unwittingly continue paying property taxes for something they do not own.
At Davidzon Law we have an experienced real estate law team who are able to advise on all manner of transactions from the very biggest to the very smallest and we take pride in giving the same attention and detail to everyone. If you are thinking of buying or selling a condominium parking spot or locker please call us to discuss.
