Ministry of Transportation supports parking space transfer proposal | Economy

The Estonian Association of Construction Companies and the Association of Real Estate Companies submitted a proposal to the Ministry of Economy and Transport to amend the Law on Apartment Ownership and Apartment Cooperatives to include parking spaces as a separate item of special property and to make them freely usable and transferable. The ministry supports the entrepreneur’s proposal.

Until now, parking spaces have mostly been a mandatory add-on when buying an apartment, regardless of whether a person actually needs it.

“We believe that today’s regulations, which require that every parking space built by developers must be linked to a specific apartment ownership, do not take into account today’s market situation, where more and more people do not own a car and therefore do not need a parking space, especially in those areas where public transportation works well,” said the economist and Marie Allikmaa, director of the business department at the Ministry of Transport.

Allikmaa said that this regulation is onerous and expensive, especially for consumers who do not own a car and do not plan to buy one in the future but have to buy a parking space. Allikmaa said that although the cost of a parking space is usually not included in the price of an apartment, it is a significant additional cost for consumers.

“If the parking spaces were the subject of a separate sales contract, the developer would be able to sell the parking spaces to other interested parties, such as other residents in the same area or nearby businesses,” Alikma said.

Martin Vahter, CEO of 1Partner Kinnisvara, said there are pros and cons to transferring parking spaces. “The advantage is that, for example, the owners of adjacent houses that do not have parking spaces can buy parking spaces, so this option actually makes parking spaces more liquid and fluid.”

At the same time, Watt said time and practice have shown that there will eventually be insufficient parking spaces in the building.

“About three to five years after a project is finished and apartments are sold, people are still eager to buy parking spaces, but it’s too late and people have to start shopping in the market to find parking places,” Watt said.

Watt believes there is no single answer to whether the change in the law is good or bad. “It depends on whose interests you look at. The developer’s interest is to cash out as quickly as possible, to get the project demarcated, to aggregate the revenue and expenses, and then to sell the goods. The condo cooperative’s interest is that the condo parking spaces don’t go out of the building and the building is in good order,” he explained.

“I still believe today that selling parking spaces outside a building is not a good idea because the people who buy the parking spaces have no interest in what’s going on with that particular building,” Watt said.

Watt said it would be harmful to a condo co-op to have a situation where someone who only owns a parking space has no interest in maintaining the home itself, fixing the roof, paying into the co-op dues or into the maintenance fund.

Watt said it makes sense to retain ownership of parking spaces and rent them out to neighbors or outside of apartment buildings.

“What I am saying is that if a developer builds an apartment building or some kind of office building, customers and guests can also be accommodated within the confines of that building or such buildings./…/ The most basic thing is that residents of the building should be able to park their cars in their spaces, but the fact is that people visiting the house can also park their cars,” he said.

Watt believes that people should think long-term, because in his opinion, parking spaces are lacking rather than being in excess. “There are a lot of empty spaces in the center of Tallinn where there are parking lots today, but in a few decades these empty spaces will gradually be built up,” he said, and for this reason, parking spaces will also disappear.

Allikmaa said it was an appropriate move to review the parking space standards set by the City of Tallinn to ensure that they meet actual future demand or are aligned with the number of parking spaces actually required, especially in and around the city centre.