The sale of garage parking spaces in condominiums – a change of practice, what to look out for?

In this post we report on the change of the land registry’s ownership registration practice regarding the sale of garage parking spaces that are in jointly owned garage properties.

As a general rule, when an owner intends to sell its garage parking space (which in reality means an ownership ratio of the jointly owned garage property, equivalent to the garage parking space) to an “outsider”, who is not a co-owner, a notice should be given to the co-owners about the intent, and should ask them, if they want to exercise their right of preemption.

Right of preemption

As per Section 5:81. of the Civil Code, in a joint ownership the co-owners have the right of preemption on the co-owner’s ownership ratio, which means as per Section 6:221. of the Civil Code, that if the co-owner receives an offer that they intend to accept, they shall communicate the offer to the holder of the preemption right.

According to the 109/1999. (X.29) FVM regulation on the enforcement of the Act CXLI. of 1997. on the land registry the applicant shall attach the preemption right holder’s statement, in which the holder waives the right to preemption. If the holder does not make a statement, the applicant shall prove that the seller requested a statement from the holder and that it communicated the purchase offer to the holder. Such proof is a document that proves the hand over (acknowledgement of receipt, confirmation receipt).

Simplifying land registry practice

There is, however a provision in said FVM regulation (Section 75(3)), which allows the seller not to communicate the purchase offer to the other co-owners. The application of the above rule makes the procedure of the parties considerably easier when selling an ownership ratio of a jointly owned property (garage parking space). According to the cited regulation “If the obtainment of the statement is exceptionally hard or would cause great delay due to the location of the holder, or due to other circumstances, then a joint statement from the parties in which they present the presumable facts about exceptional hardships or the great delay is sufficient”. So, if the parties recorded the above in the sales agreement and indicated the cause of the exceptional hardship or great delay (e.g. the large number of the co-owners, or the fact that many of the co-owners only have foreign addresses), the land registry registered the buyer’s ownership right to the land registry without attaching the above waivers or communications.

Be sure!

The aforementioned land registry procedure however has gone through changes in the last few months. The land registry lately – not having regard to the large number of the co-owners – demands the attachment of the waivers, or proof that the seller communicated the purchase offer, and that it requested a statement.

Based on the above we advise to keep in mind the change in practice, and we recommend to always post the request letters with an acknowledgement of receipt, so as to the buyer’s ownership right to be registered as soon as possible without a request for supplementary information.

In case of question please contact:
Dr. Anikó Vadász
Dr. Bence Magyari

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