Two Types of Condo Parking Spaces

Fee Simple or Limited Common Elements

Unlike condominium parking spaces that are separately taxed and deeded (known as “fee simple ownership”), parking spaces that are designated as “limited common elements” within a condominium regime are NOT covered by title insurance. In a past blog, we explain the differences between these two types of condo parking spaces.

Title Insurance Coverage

Again, title insurance does not cover limited common element parking spaces because, when you purchase a condo, you are only acquiring the right to use and enjoy that parking space as determined by the condo documents.  You do not own or hold title to that parking space and since title insurance is designed to protect ownership interests, and not appurtenances or interests which originate from the condo documents, no coverage is provided for limited common element parking spaces.

Review Condo Documents

It is critically important that condo buyers make good use of the review period afforded to them by law and found in their sales contract.  DC, Maryland, and Virginia laws require sellers to deliver “condominium instruments and certificate of condominium” or otherwise known as “condo docs” in advance of closing and buyers are given the opportunity to review these documents with the right to cancel the contract.  Buyers should specifically review the “condominium declaration,” one of the instruments included among the condo docs, to confirm that the limited common element parking space that is identified in the sales contract is, in fact, properly listed as being assigned to the condominium unit being purchased.

A Bad Scenario

Last year, our office was contacted by a buyer of a condo unit whose sales contract identified a limited common element parking space as an appurtenance to the condo unit.  He later learned, several months after closing when he finally purchased a new vehicle, that the parking space identified in his sales contract was being occupied and used by another unit owner. After a lengthy and costly legal battle with the condo developer and condo association, the matter was ultimately resolved.  However, the entire ordeal could have been easily avoided by simply reviewing the condominium declaration provided as part of the condo docs delivered by the seller.

Need Help?

Contact one of our attorneys at Federal Title if you need help reviewing a condominium declaration – email attorneys@federaltitle.com or call us at 202-918-9358.