Parking Spaces and Storage Spaces: Chadwick's REAL Tips Episode 12
Buying or Selling a Condo or Townhome in Denver? Be sure to know if you actually own or share your parking spaces and storage units!
Whether you are buying or selling a condo/townhome, it is important to know how you "own" your parking spaces and/or storage units. Please be sure to familiarize yourself with the following two terms: Deeded versus Exclusive Right.
Deeded is a term that most of us are familiar and is synonymous with ownership. Many of us automatically assume that all parking spaces and storage units are individually owned-thus deeded. Eh, not true. If your parking space/storage unit is deeded, it will allow you to individually sell your parking/storage separate from your condo or townhome. It also allows for a dollar value to be given for your parking/storage because it is based off of market value. Another benefit to having deeded units it that you have the right to "individually sell" your parking space and/or storage unit to other homeowners within the HOA; however, most HOAs do not allow the sale of a deeded space to be conveyed to a non HOA homeowner. This all depends on the HOA Declaration of Covenants, Conditions, and Restrictions.
Exclusive Right To Use is a term that means that you as the new homeowner have the right to use a specific, reserved parking space or storage unit. It could also mean that you have the right to use a non-reserved parking space or storage unit (e.g. one that is available). In this situation, you still own the right to use exclusively for your own purposes. This is much different than a deeded space. With Exclusive Right to Use, true ownership is owned by the HOA and shared amongst its shareholders (homeowners). It is like each homeowner is entitled to their fair piece of pie.
How would Exclusive Right versus Deeded Spaces affect the sale of my condo or townhome?
Your day to day activities won't feel much different regardless of how you take ownership of your spaces. However, when it comes to selling your condo or townhome, Exclusive Right To Use does not allow you to sell your parking space or storage unit separately. Exclusive Right Spaces are also given less value than Deeded Spaces, because you don't own them. You will utilimately be selling only your condo/townhome, and through transferring HOA membership, convey the Exclusive Right for parking/storage.
If I am buying or selling a condo or townhome how can I be sure? There are 3 important sources of information to check on the status of your parking space and storage units.
A) Check with your Title Company. The Title company will pull documentation of how your spaces are owned. This is one of the most important sources to check because this is how it will be conveyed at closing. Hence, if it looks wrong to you, now would be time to check with the HOA!
B) Check with your HOA. Each HOA has their own Declaration of Covenants, Conditions and Restrictions. This will dictate how parking and storage is owned: Exclusive Right or Deeded. Often times an HOA may decide to "Deed" all spaces and storage units to homeowners, but it may not be reflected in the Title paperwork. This can happen with HOAs that have old documentation or haven't submitted all paperwork to the City and County Office. Always be sure to check that the HOA matches Title.
C) Check with your Agent. Your agent does not need to be an expert with HOA Law. In representing you as their buyer or seller, your agent can help connect you with the Title Company and/or HOA to provide more clarity as to what type of ownership you will conveying. Trust them, they are professionals in the industry!