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Can Condo Owners Lease Out Their Parking Space?

CBC news recently reported on a Uber-style app that connects drivers looking for parking with people who want to lease their parking space. The article warned that the City of Ottawa zoning by-law does not allow the rental of residential driveways – unless the rental is directly associated with the lease of the dwelling itself (meaning that you can lease the driveway to the tenant leasing the dwelling to which it is attached).  The article indicated that the leasing of a driveway to non-tenant could result in a fine of up to $5,000.

This article prompted us to look into the rules applicable to condo owners wishing to lease their parking spot. Indeed, the occupant of a downtown condo unit who does not own a car may be tempted to lease his or her parking space to third parties. Is that permissible?

Municipal by-laws

In order to determine whether the leasing of a parking space is permitted, one must first examine the municipal by-laws in the city where the parking space is located.

As reported by CBC, Ottawa’s zoning by-law 2008-250 indicates that “parking, queuing and loading spaces and all driveways and aisles leading to those spaces … must be set aside for and used exclusively for that purpose” and in accordance with zoning by-laws. While this language may lead to some interpretation, it appears that residential parking spaces cannot commercially be leases separately from the dwelling to which they are attached.  Lee Ann Snedden (the City’s Chief Development Review Services) is quoted in the CBC article as indicating that this does not apply to parking spaces in public parking lots or in parking garages.

In Toronto, by-law 569-2013 appears to contain similar language as part of its zoning by-law. In fact, the Toronto Star had reported on a similar story in 2013. Toronto’s zoning language appears even more restrictive as it does not readily appear to carve out an exception for parking garages.

Anyone interested in leasing out their parking space (or any condominium corporation interested in prohibiting this activity) should therefore have a look at their applicable municipal by-laws to see where they stand.

Condominiums’ regulations

Whether the municipality allows it or not, condominium corporations can restrict to some extent the use (and by extension the leasing) of parking spots. Indeed, condominium corporation can be more restrictive (but not more permissive) than municipal by-laws.

When approaching the question of whether one can lease his or her parking space in a condominium complex, one must first determine who owns the parking spot in question. Sometimes condominium parking spaces are comprised of common elements who are allocated to owners/occupants.  In other cases they are exclusive-use common elements exclusively available to specific owners/occupants.  That is often the case in townhomes, with the driveway being an exclusive-use common element reserved for the owner of the townhome.  Finally, in certain cases, parking spaces form a distinct unit (with a distinct title).

To make matters even more complicated, parking restrictions can be found in the declaration or in the rules.  These can contain restrictions pertaining to the use that can be made of parking units. They may limit the number of vehicles to be parked within the boundaries of a parking unit and may even limit the kind of vehicle to be parked. For instance, these documents could prohibit the parking of motor boats, motorhomes or commercial vehicles.

Of greater relevance to this post, the declaration or rules can specifically restrict the leasing of one’s parking space to other owners, tenants or occupants of the corporation. Stated otherwise, the corporation can  prohibit the leasing of a parking unit to someone who is not an owner or occupant of the corporation. This will ensure that non-owners and non-tenants not have access to the parking area.

Corporations can lease non-exclusive-use common element parking spots

Finally, keep in mind that condominium corporations (not owners) can adopt a by-law allowing it to lease non-exclusive use common elements.  This allows a corporation to further control who parks on the corporation’s property by leasing non-exclusive use parking spaces. This power of the corporation is found under section 21 of the Condominium Act and was recently confirmed by the Superior court of Justice in the Cheung v. RCC no. 759 case. That case dealt with a commercial condominium corporation with some 162 parking spaces. Until 2009, these parking spots were allocated on a “first come, first serve” basis. Overtime, a parking problem developed with one owner monopolizing the use of the parking for one of his units, which was used to operate a popular restaurant.  Through the adoption of a by-law, the corporation limited to 4 parking spaces the number of space allocated to each condominium unit.

The owner contested this parking by-law, first arguing that condominium corporation could not lease the common parking spaces and, second arguing that such a by-law was oppressive. The court confirmed that a corporation has the authority to lease out non-exclusive-use common element parking spots (unless the declaration provides otherwise). The court also rejected the argument that this by-law was oppressive. The court reminded the parties that boards are charged with the responsibility of balancing the private and communal interests of the unit owners. The by-law could not be seen as being oppressive as it treated every owner equally. The court also noted that the owner’s expectation that it could use as many parking spots as desired on a “first come, first served” basis was not reasonable. That expectation (not the by-law) was oppressive.

Lessons learned

Regardless of whether your municipality prohibits the independent leasing of one’s parking spot, condominium corporation can put restrictions on the use and leasing of parking spaces. Corporations may want to review their governing documents and, if required, modify the declaration or adopt a rule to proactively implement the restrictions which best suit the needs of the community. These needs may vary depending on the particularities and location of the condominium.

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