Why is there an annual charge for a car park space I bought with my apartment?
Property Clinic: Car parks have a maintenance budget which owners of spaces pay
Underground car park. File photo. Photograph: Peter Thursfield
I recently purchased a second-hand apartment in a city-centre development. At the start of the new financial year, I received my first service charge statement. I noted that, as well as the service charge, there is also a car park charge of €220. I did purchase a car park space with the apartment (in a car park under the block) but this space does not require any maintenance and I cannot understand this charge.
My managing agent says that this is how the budget has always been set up but I am wondering if there is any legal basis or logic for this extra charge.
This is a common question from people who have purchased apartments with car park spaces for the first time.
Most multi-unit developments will have a certain number of car park spaces as well as apartments. Normally, spaces are sold by the developer at the same time that the apartments are sold for the first time. Some owners will purchase one space with their apartment, some more than one and some owners choose not to purchase any at all. In addition, there may be some spaces that must be put aside for visitor parking.
In your case, the car park is underground which is common in built-up areas, as it maximises the use of space by the developer. However, some developments have over-ground parking and others will have a mix of the two.
In relation to service charges, it is common that, when the developer is considering at the outset how to build a budget for the development, a car park charge will be included. The idea here is that, from a fairness perspective, costs that relate to parking spaces should be paid for by the owners of the spaces (and not by the other apartment owners). This is normally then set out in the lease agreement in relation to each apartment, ie that a separate charge is payable based on ownership of a car park space.
As regards calculating the precise charge, there is normally a certain level of estimation involved. Some costs will be easy to identify such as the cost of vehicle gates and their ongoing maintenance; car park specific repairs (eg resurfacing or lining of spaces); and perhaps electricity for the car park if this is on a separate meter.
Other costs may be part of a wider bill for the overall development, for example a portion of the annual block insurance policy and public liability policy; a portion of vermin control; a portion of CCTV coverage; calls to an after-hours emergency service (if one is in place) and so on. However, depending on the number of levels in the car park, the number of spaces involved and so on, it is quite possible that €220 would represent a reasonable car park space charge in your development.
In some new developments, the planning authorities are now encouraging fewer car spaces and more bicycle spaces. It remains to be seen if this will lead to a change over time in these developments as to how the costs of the car park management are shared across all owners. The other issue relating to car parks now coming to the fore is electric cars (and the installation of charging mechanisms) and again it is not clear at this point how this will evolve in apartment developments.
Finbar McDonnell, chartered property manager and member of the Society of Chartered Surveyors Ireland scsi.ie