Case Law Summaries

City of Atlantic City v. Warwick Condominium Association, Inc.

• Opinion Date: September 28, 2000
• Real Property Law
• E-Mail

CONDOMINIUMS; TAXATION—An off-site parking facility, included as part of a condominium’s overall parking area, is part of its common elements and not separately taxable, even though less than all of the unit owners are able to use that particular facility.

When a high-rise condominium association was originally created, all parking associated with the building was defined to be part of the common elements. The parking, however, was insufficient. As a result, the association adopted a seniority-base parking program to assign the available parking places to unit owners. The program included a waiting list in the order of ownership seniority. “As each unit was sold, the parking place assigned to that unit was not assigned to the new owner; rather, the parking place of the sold unit reverted back to the Association and was assigned to an owner contained on the list, in order of seniority.” Several years later, the association acquired land across the street from the building. It then amended its master deed to absorb the land into the existing common elements. Some of the land was improved and designated as additional parking. Parking was still insufficient and the seniority program continued. Those owners using the new parking lot were charged a monthly fee to pay for its maintenance. The municipality refused to remove the new land from the tax rolls and the association appealed that assessment, seeking a determination that the lots were not taxable, “since they are part of the common elements.” Although the county tax board granted the appeal, the Tax Court “concluded that because only a limited number of condominium owners were in fact entitled to access the parking facility located on these lots, they were not, therefore, a part of the common elements.” In the Tax Court’s opinion, because only tenants who were on the list could park in the new parking lot, this constituted “a specific reservation or limitation to a particular group.” If this were in fact the case, then the Condominium Act would exclude the new parking lot as being other than a “common element.” On appeal, the Appellate Division found that the “totality of the parking made available by the Association to condominium owners consists of those parking spaces contained on the original site, plus those spaces contained on the four lots in question.” To it, given the circumstances, application of the common-element exclusion was held inappropriate. “The parking spaces on the four lots are not specifically reserved or limited in use to a particular group of units any more than the parking spaces located on the original site. The same policy of allocation of spaces among the owners is applied to all available parking.” Even though not all owners could use the parking lot at any given time, the condominium unit owners still shared an undivided interest in the parking lots and had access to the parking spaces in accordance with the terms of the association’s system. “The fact that all unit owners cannot use all of the common elements at once does not remove the owner’s percentage interest or to change the fact that their percentage interest is inseparable and transferred upon conveyance.” As a result, the new parking lot was not subject to separate tax assessment.

Copyright ©2003. Meislik & Meislik. All rights reserved.