1. Why need to understand the method of allocating use of parking stalls and storage lockers
Parking areas or storage lockers in strata developments may be allocated in the different way. The specific rights of owners or tenants to use parking stalls or storage lockers may very depending on ho the use of these areas has been allocated in the development.
It is important to remember that, the use of parking stalls or storage lockers by the seller does not necessarily mean that they will be available for the purchaser. Unless it is clear that the parking stall/storage locker will be available to be used by the purchaser, the parking stall /storage locker should not be included on the listing.
2. The Difference Parts of a Strata Plan
The three different kinds of areas in a strata plan are: a strata lot or part of a strata lot; limited common property; and common property as defined below. Owners should therefore examine their development’s strata plan to determine whether their parking and storage areas are designated as a separate strata lot or part of a strata lot, limited common property or common property.
(a) Strata Lot or Part of the Strata Lot
- The strata lot is owned solely by the owner.
- A building strata lot usually ends at the center of walls, floors and ceilings, but may have different boundaries, if shown on the strata plan.
- A bare land strata lot consists of land, and the boundaries of the land will be shown on the strata plan.
- The strata plan will contain a legend which explains how strata lots are noted on the strata plan.
(b) Limited Common Property (LCP)
- Limited Common Property is common property that has been designated on the strata plan, or on a sketch plan filed at the Land Title Office, for the exclusive use of one or more strata lots.
- Limited Common Property is often designated on the strata plan as “LCP” with a strata lot number after it.
- The strata plan will contain a legend which explains how the limited common property is noted on the strata plan.
(c) Common Property:
- Common Property is the part of a strata plan that is not part of a strata lot.
- Each owner owns a share of the common property, as a tenant in common, which is in proportion to the strata lot’s unit entitlement.
- The strata plan will contain a legend which explains how the common property is noted on the strata plan.
- Any areas on a strata plan without any designation are deemed to be common property.
3. Allocation Methods
An owner may have the ability to use parking and storage areas by one of the following methods of allocation.
(a) Strata Lot or Part of the Strata Lot
Parking and storage areas may be designated on the strata plan as a separate strata lot.
Parking and storage areas which are intended for commercial use can be designated as a separate strata lot, in which case, they will have their own strata lot number.
Parking and storage areas which are intended to be used in conjunction with a residential strata lot cannot be a separate strata lot, but can be designated as part of the strata lot and so share the same strata lot number as the residential unit.
A parking or storage area which is designated as part of a strata lot will always be owned by the strata lot owner, and a strata lot owner will transfer ownership of these areas to a purchaser upon the sale of his or her strata lot.
Some strata plans designate parking stalls/storage lockers as part of a strata lot or, in some very rare cases, as a separate strata lot. Although such designations are rare, the Form B will indicate the designation. If the parking stall/storage locker is part of a strata lot, the new purchaser will automatically own and therefore have the use of the area when the strata lot is purchased. The listing for the strata lot can identify the parking stall/storage locker by reference to its stall or locker number. It is not necessary to list the parking stall/storage locker separately. No further action is required by the buyer to ensure that the buyer will have the use of the parking stall/storage locker.
In some cases, parking spaces may be designated as a separate strata lot. If the seller is selling both the residential/commercial strata lot and the parking strata lot, both must be listed for sale and separately transferred to the buyer.
(b) Limited Common Property
Parking and storage areas are often designated on the strata plan as limited common property (“LCP”) for the exclusive use of a particular strata lot. An owner who is entitled to the exclusive use of an LCP parking or storage area does not own the area, but he or she will have the exclusive right to use the area.
LCP areas are still common property, which is owned by all of the owners in the strata corporation in proportion to their respective unit entitlements.
If parking and storage areas are designated on the strata plan as common property and are not limited to the use of a specific strata lot, a strata corporation can create LCP designations of these areas by passing a resolution either by a unanimous vote or a 3/4 vote (see Instruction Guide 18 for a more detailed discussion).
The right to exclusive use of an LCP area attaches to the strata lot and not to the individual owner. Therefore, when an owner sells his or her strata lot, the right to exclusive use of the LCP area will automatically transfer to the new owner of the strata lot.
If a parking stall/storage locker is designated as LCP, whether by the developer, or by the owners at a later time, the parking stall/storage locker is automatically available for use by the owner of the strata lot to which the parking stall/storage locker is designated.
When listing a strata lot to which the exclusive use of a LCP parking stall/storage locker is designated the listing should indicate that the parking stall/storage locker is LCP. The numbers of the parking stall(s)/storage locker(s) can be shown on the listing as being the parking space(s)/storage locker(s) number that the buyer will be entitled to use. No further action is required by the buyer to ensure that the buyer will have the use of the parking stall/storage locker.
(c) Common Property
If the parking stall/storage locker is designated on the strata plan as common property, it is within the control of the Strata Council, except in cases where there is a developer’s lease, which is discussed below. Common property is owned by all owners as tenants in common. The Strata Council has the authority under the Strata Property Act to permit an owner or a tenant to use common property. If the parking stalls/storage lockers are common property, owners or tenants are entitled to use a particular area as a result of the Strata Council’s grant of exclusive use to that owner or tenant. The Form B will indicate whether the parking stall/storage locker is available for use as a consequence of an allocation of use by the Strata Council. In some cases, the permission to use the parking stall/storage locker may have been given many years ago. Some owners may not even realize that they are using their parking stall/storage locker as a result of the permission granted by the Strata Council. It may even be that the permission to use the parking stall/storage locker was originally given by the developer during the time the developer was acting as the strata council. The provision of the Strata Property Act that authorizes the Strata Council to grant permission to an owner or tenant to use common property limits the period of time for which permission can be given to one year. The permission may be subject to conditions. The permission may be renewed and may be made subject to the same or different conditions. Additionally, the permission for the exclusive use of common property may be cancelled on reasonable notice.
Because the allocation of the use of common property is within the control of the Strata Council and can change, when listing a strata lot where the parking stall/storage locker is common property, the seller should not promise a buyer that the buyer will be entitled to use any of the common property. Rather, the seller should refer the buyer to the information on the Form B. The buyer can rely on the Form B to indicate which parking stall/storage locker is allocated to the strata lot being purchased, however the buyer’s agent should clearly point out the statement on the Form B that indicates that where the designation of the parking stall/storage locker is common property, the allocation is subject to section 76 of the Strata Property Act and may be subject to change in the future. If the Form B is incomplete, or the information conflicts with the information provided by the vendor, the real estate licensee should recommend that their client seek legal advice.
Parking and storage areas may simply be designated on the strata plan as common property. Just like limited common property, common property is owned by all of the owners in a strata corporation in proportion to their respective unit entitlements. However, the use of areas designated as common property can be allocated to owners in three different ways.
(I) A Grant of Exclusive Use
Under section 76 of the Act, the strata corporation may give an owner the exclusive privilege to use parking and storage areas which are designated as common property. This permission or privilege may not be given for a term which exceeds one year and may be subject to conditions.
However, the strata corporation can renew the term of the privilege, alter the conditions, and cancel in the middle of a term by giving reasonable notice to the owner. Permission to exclusively use common property under section 76 is therefore temporary in nature and is not as secure as a right to use common property under an LCP designation or a lease.
An important element of short term exclusive use arrangements is that the ability to use the common property only attaches to the owner and not the strata lot.
Vendors, therefore, cannot contractually assign their permission to use parking stalls or storage lockers to new owners, as with a lease. The new owner must ask the strata corporation for permission to use the area exclusively.
The strata corporation has full discretion to grant the exclusive use of the same or a different parking or storage area, or even to deny the new owner the right to use any parking or storage area.
(II) An Assignment of Rights Under a Lease or License
When a developer creates a strata development, the developer will sometimes grant a lease or license over parking or storage areas to a related company or to itself (a head lease). The developer or related company will then assign its lease or license interest in individual parking or storage areas to purchasers when they buy their strata lot. Usually head leases or licenses of common property are created in developments with large underground parking and storage areas to enable the developer to control which purchasers get which parking and storage areas after the strata plan is filed.
Some head leases or licenses are worded so that the sale of a strata lot to a purchaser automatically triggers an assignment of the individual parking or storage area to the new purchaser. However, if the head lease or license does not contain an automatic assignment, the vendor can contractually assign his or her lease or license in the contract of purchase and sale.
(III) Common Use of Parking Spaces
Sometimes a strata plan will contain a parking area designated as common property that is not allocated to the use of any specific owners. Owners can often use common property parking areas on a first-come first-served basis.
However, there may also be strata corporation bylaws or rules which govern how owners may use the parking area.
4. Claims the Parking Stall/Storage Locker was Purchased
Because the allocation of the use of common property is within the control of the Strata Council and can change, when listing a strata lot where the parking stall/storage locker is common property, the seller should not promise a buyer that the buyer will be entitled to use any of the common property. Rather, the seller should refer the buyer to the information on the Form B. The buyer can rely on the Form B to indicate which parking stall/storage locker is allocated to the strata lot being purchased, however the buyer’s agent should clearly point out the statement on the Form B that indicates that where the designation of the parking stall/storage locker is common property, the allocation is subject to section 76 of the Strata Property Act and may be subject to change in the future. If the Form B is incomplete, or the information conflicts with the information provided by the vendor, the real estate licensee should recommend that their client seek legal advice.
The strata plan will contain a legend which explains how the limited common property is noted on the strata plan.
