Condominium Parking by Owner/Developer #185
CATEGORY: Legally Speaking
TAGS: Contract of Purchase and Sale Land Title Act Strata Parking
By Gerry Neely
Another failed attempt by an owner/developer of a strata development to grant exclusive use to a purchaser of a strata unit of a parking stall within the common property. The contract of purchase stated that the purchase price of a unit included two parking stalls to be held on 99 year leases. The cost of one stall was included in the purchase price, but the extra one cost $8,000.
The disclosure statement explained that the owner/developer intended to have the strata corporation enter into an agreement giving him the exclusive use and enjoyment of a number of stalls for a term of 99 years or until the strata corporation dissolved. The owner/developer would then assign its interest in specific stalls to a purchaser.
A dissatisfied purchaser sued, arguing that the representation of a 99 year lease was a condition which couldn't be met by the owner/developer and that the breach of that representation entitled the purchaser to rescission or damages.
The reasons for judgment analyzed the various methods in which parking spaces can be dealt with when units are sold. The first is to include the parking space as part of the title of the strata lot, which can be done even if the residence and the parking garage or stall are not contiguous. While this method provides the greatest security of tenure for a purchaser, the disadvantage for an owner/developer is its inflexibility. A slightly less secure method is to have the owner/developer designate parking stalls as limited common property for the exclusive use of the strata lot owner. This designation can only be removed by a unanimous resolution of the strata lot owners including the owner affected by the resolution. Again, the problem for both the developer and a subsequent strata council, is the inflexibility of a designation which may prevent a real location of parking stalls among owners.
Another method which is rarely used, is to lease areas of the common property for parking. The problem is that if the lease is for more than three years, it is deemed to be a subdivision of land which is subject to the approval process contained in the Land Title Act.
An innovative approach in attempting to meet the objectives of both the owner/developer and a purchaser was taken by a Victoria lawyer a few years ago, the success of which depended upon location of the parking stalls being within the condominium building. Before the area of the building was subdivided, the developer leased to a third party associated with the developer, a long term lease of part of what would become common property in the underground parking garage floor when the strata plan was filed. Following the filing of the strata plan, the lease of 29 parking stalls was recorded on that part of the strata plan described as dealings with the common property. The developer was able to do this because the subdivision requirements of the Land Title Act do not apply to a lease of a building or part of a building.
Following registration of the strata plan, the third party granted a sub-lease of a parking stall to the purchaser of a condominium who wanted an extra stall. The Land Title Office refused to note the purchaser's interest in the sublease because there was no separate title for the parking space. The risk for the purchaser of the stall is that a third party dealing with the head lease who has no knowledge of the sub-lease may be able to deny exclusive use to the sublessee.1
A licensee sued for a commission of $46,537 and was awarded $1,500 based upon a claim of quantum meruit. The licensee was unable to establish that there was an agreement to pay commission or that he was the effective cause of the sale or that he had introduced the purchaser to the property.
The purchaser had used the licensee as the judge said, both as a searcher of property and a gofer. The judge fixed the damages of the licensee at $1,500. This decision gave the licensee more than that amount since fortunately it allowed the licensee to claim costs against the purchaser of the four day trial.2
|1.||Sparbrook Management Inc. v. Pacific Place Development Corporation, S.C.B.C., New Westminster Registry #C900733, November 27, 1991.|
|2.||Klassen v. Glups, S.C.B.C., Vancouver Registry #C892090, May 9, 1991.|
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