Two weeks ago, almost on the sly, a legislative amendment was adopted that could solve one of the “hit problems” of the real estate market: the complicated process of selling parking spaces in a condominium building. The changes came into force on 2 May, so it is now up to market players to put the new provisions into practice.
What is mine could be yours too
The problem, which has persisted for many years, is due to the fact that parking spaces in condominium garages are typically registered in the land registry not as separate properties but as a common garage owned by the owners in undivided joint ownership.
If someone wanted to sell its parking space, it was immediately faced with the rule that the other owners have the right of first refusal. The sale process had to include a call to the co-owners to exercise their right of first refusal, which is time-consuming and costly even with 4-5 co-owners There was no clear practice for parking garages with dozens of owners either to find a way around this rule. Moreover, the notification must be confirmed, otherwise the land registry will not register the new owner.
The change in the legislation addresses the problem from two angles: on the one hand, it offers an alternative for newly built garages and, on the other hand, it tries to resolve the uncertainties in practice for the sale of existing properties.
A new opportunity for investors
A significant innovation is that individual parking spaces can now be registered as a separate property under a separate parcel number. This solution means that the parking space is considered as a separate property: the owners of the other parking spaces do not have a right of first refusal and the seller is not obliged to communicate the offer to the other owners of the garage. This will save sellers weeks of procedures with sometimes uncertain outcomes, making the sale of garages much simpler.
In addition, the new rule also increases the owners’ freedom: they can now genuinely sell their parking space to whomever they choose, without being forced to enter into a contractual relationship with a co-owner when the right of first refusal is exercised.
The postal service can also breathe a sigh of relief
The amendment also provides a solution to the sale of condominium garages already built that are in joint ownership.
In the practice of recent years, several solutions have emerged for notifying a large number of co-owners, (e.g. displaying on the notice board of the condominium, posting in the Facebook group of the condominium). However, judicial practice has not rewarded creativity and has mostly insisted on the solution that the notification of co-owners by registered letter with return receipt can be waived only in case of exceptional difficulty. However, the content of “exceptional difficulty” was decided on a case-by-case basis, so sellers often preferred the safe but costly and time-consuming solution.
Under the new provisions, in the future it will be sufficient for the seller of a parking space to provide the land registry with a statement from the representative of the homeowners’ association certifying that the offer to purchase has been displayed in the common area of the condominium. This solution has been known and used in practice, but so far it has depended mostly on the goodwill of the land registry concerned to accept it. Now that it is sanctioned by legislation, the previous uncertainty is finally dispelled; furthermore, there is a practical advantage for sellers, as they do not have to deal with sending a large number of registered letters with return receipt.
What does the future hold?
Overall, the change in legislation is a sensible, forward-looking way to address the problems that have arisen in the sale of parking spaces, both for existing condominium properties and for garages that will be built in the future. The practicalities of some of the details may still be unclear, but the land registry is expected to provide information on the precise details in the coming weeks.