May 06, 2013

Toronto condo parking spaces can fetch $60K

Toronto Star article featuring Lorne Shapiro

The following article was published in the Toronto Star on Thursday April 25, 2013, and featured comments by Lorne Shapiro of Basman Smith LLP.

View the article.

The following is the full text of the Toronto Star article.

By: Ian Harvey Special to the Star, Published on Thu Apr 25 2013

The resale market for parking spots and condos is steady with some ranging in price up to $60,000. Still, there are a few wrinkles in selling a spot.

With parking a hot commodity for downtown residents who drive, condo owners are taking advantage of the demand and selling their parking spaces.

A spot that was purchased for $18,000 about 15 years ago, for example, was recently sold by its owner for $38,000.

Still, that was a bargain compared to prices that begin at $55,000 — and generate bidding wars — for parking spots in newly built downtown condominiums. Most buildings have fewer parking spaces than condo suites, and many have no visitor parking at all.

Yet even at $40,000 to $60,000, Toronto condo dwellers are still in a sweet spot. In cities such as London, England and New York, parking spots for multi-million-dollar condo units can run up to a cool one million dollars.

In Singapore, one luxury builder has installed a parking elevator to bring owners’ cars to their units where they are off-loaded into a special ensuite parking bay. A home with a two-bay parking garage is $7.7 million.

In Toronto, the resale market for parking spots and condos remains steady with MLS for early March showing some 23 parking spots ranging up to $60,000 and also three lockers for sale with prices from $4,000 to $6,000.

Still, there are a few wrinkles in selling a spot or a locker.

First, read your condominium declaration, says Lorne Shapiro of Basman Smith LLP , a real estate lawyer who works with developers.

It’s the bible and it will spell out what you can and cannot do, he said.

While some older condo corporations may not have anticipated sales of parking spots and storage lockers, most declarations allow sale only to another owner in the building, Shapiro said. And there are reasons why: mainly security.

Assuming it’s permitted, selling a parking spot or locker is the same as selling title to your condo, he said.

The residential unit, parking spot and locker are all titled and numbered separately so there are no issues with title, he said. And you have to pay the maintenance fees on them.

You also might want to read over your mortgage documents if you’re thinking about flipping a parking spot or locker soon after purchase, warns Robert Wong, a real estate broker with Keller Williams Realty . In fact, it’s a good idea to check with your mortgage period.

If you’ve got a mortgage then the locker or parking spot will likely be included in the value of you condominium, he said. If you sell the parking spot or locker, you have changed the value of the property and there could be a problem.

With more downtown condos going up with fewer parking spots — the 42-storey project at the old Royal Canadian Military Institute on University Ave. near Dundas St., will have none at all — the price for those suites that do have spots, and the resale market for parking spaces, are both escalating.

Politics has also raised its head in the condo parking issue.

The city of Toronto usually demands .67 to .75 parking spaces per unit for most condos and up to 1.1 in some outlying areas but will waive that ratio depending on location.

Homeowners in the Woodbine Ave. and Queen St. E. area in the Beach were recently incensed when they learned a 70-unit condo planned for the neighbourhood would have only 65 spaces — actually more than the requirement. The residents fear an overflow of cars will flood their streets and force those homeowners with street parking further from their regular spots.

Of course, getting a parking spot with a condo all depends on location, location, location. Buyers in the suburbs usually expect parking included the deal, along with a locker, because transit isn’t always close, fast or convenient depending on where they work.

Singles, young couples and empty nesters who buy within the city’s core for the lifestyle, however, aren’t usually interested in parking spots said Jim Ritchie, Tridel’s senior vice president of sales and marketing. Those residents don’t rely on cars and instead use streetcars, subways, bicycles and even shared rides such as ZipCar or AutoShare when they need wheels, he said.

A car is more important as you move away from the core, said Ritchie, explaining the demand curve for parking.

Cars are expensive, said Debbie Cosic, of In2ition Realty who specializes in marketing and selling new home developments. Parking spots can add $50,000 to the cost of buying a condo, that’s another $240 a month in mortgage payments. Then’s there $300 a month for the car, $100 a month at least for insurance, gas. That’s nearly $1,000 a month for something you don’t need every day.

Photography by Nic Redhead