Parking in commercial or mixed-use condominium projects: common elements or unit? – Real Estate and Construction

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United States: Parking in commercial or mixed-use condominium projects: common elements or unit?

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In a commercial or mixed-use condominium project, parking is a popular commodity (at least in the short to medium term). Since parking is an integral part of the mixed-use co-ownership project, the developer and his co-ownership lawyer will need to determine how to characterize the parking lot in the language of the mixed-use co-ownership. Below are just 3 of the options to consider.

Option 1

Designate the parking area as general common elements in the declaration of co-ownership, which means by default that the parking will be used on a “first available basis”, ie without reservation. The declaration of co-ownership may reserve the right to the developer to allocate specific parking spaces for the exclusive use of the units. Usually, and if the plan is to allocate parking spaces exclusively to one unit, that parking is first designated as a general common element and then allocated to a specific unit by converting the parking space (s) from the common element. general specific into a limited common element. The conversion is often done every time a unit is closed, as opposed to the point of sale to provide marketing flexibility at the point of sale.

Option 2

Each unit could encompass the parking spaces that are intended to serve the unit. This enlarges each unit in the scheme and makes it clear from the start which parking spaces belong to which units. The entry and exit rights of vehicles and pedestrians are reserved above the walkways and pedestrian alleys, as the case may be. This approach is often used when the parking component will be divided between uses, for example, multi-family versus office, or hotel versus residential for sale. The encapsulation approach offers protection for term marketing. For example, for the multi-family component for rent, there is often a wait for transfer during stabilization. The inclusion of a parking lot that is used for multi-family use within the multi-family unit will facilitate the disposal of the asset. Encapsulating an integrated parking garage will likely require an O&M agreement shared between the uses served, or the designation of a use owner or the condominium association, as the responsible party for the operation. ‘maintenance.

Option 3

A parking unit can be created if all or part of the parking facilities will generate income, or if there is a desire to control future parking or redevelopment into another use. In such a case, the owner of the parking unit would keep the revenue from open and event parking, and / or the revenue from the parking permits. It should be noted that creating a separate parking unit will create a separate property tax account for the garage unit and will require the owner of the garage unit to operate and administer the unit and manage the parking permits. parking or easements with other units. Obviously, excess income or the need for control drives this decision. A separate parking garage unit can also be used to facilitate public funding options, for example, when a city or other regulatory authority will fund the construction of the garage and must own the garage as a condition of using the funds. public.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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