Q&A: Selling Parking Spaces

Q. We have a parking situation that could be turned into a revenue-making opportunity but we want to know how to go about it. It turns out that our condominium association actually has a surplus of parking spaces. We used to rent our excess spaces to people who do not reside in our building, but our management company advised us to discontinue this practice. They said that the city and county were entitled to taxes if we were operating a public parking garage. We dearly miss this extra revenue and would like to start renting out those spaces again. Of course, we would pay the appropriate share of the city/county tax. What do you recommend that we do?

                             —Parking Problem

A. “Here is what Florida Statute 718.111 says: 'The association has the power to acquire title to property or otherwise hold, convey, lease, and mortgage association property for the use and benefit of its members. The power to acquire personal property shall be exercised by the board of administration. Except as otherwise permitted in subsections (8) and (9) and in s. 718.114, no association may acquire, convey, lease, or mortgage association real property except in the manner provided in the declaration, and if the declaration does not specify the procedure, then approval of 75 percent of the total voting interests shall be required,'' says Eric Glazer, an attorney and founding partner with Glazer & Associates, P.A., with offices in Fort Lauderdale and Orlando.

“So, the first question is….what does the declaration say in this regard? Without seeing your documents, I would guess that a 75% vote of the community is going to be required before the board may enter into such an agreement. Before going down that road however, I would want to make sure that the insurance carrier for the association takes no exception to such an arrangement.

“Perhaps they would object to insuring the lot if they know it is going to be leased to third parties and traffic will increase. If the insurance company won’t insure the property, then obviously the association can’t consider this. The agreement itself between the associations needs to be crafted carefully. Are the spots being leased to another association or to specific residents in that association? How long is the term? An easement agreement and/or license agreement may also be necessary if other common areas of the association need to be crossed over in order to get to the parking spaces.

“The least of my concerns is that the city or county may want some taxes. In the end, if it is economically worthwhile to do the deal and pay the taxes, then so be it. There’s lots of more important hurdles to overcome first.”

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Comments

  • We submitted lease applications to the management company of our condo in January and February per the most recent application available. In April the condo board decided to change rules and want us to add additional info to the info for our tenants. Is this legal to change the rules of an application for a lease after the fact? It is now 6 months later and they are saying they won't approve the applications even though they were complete to begin with and the tenants are repeat tenants from last winter.