Asked and AnsweredI have an opportunity to buy a garage space, but the sponsor is calling the arrangement a “license” rather than a “purchase”. Does that matter?
Possibly. Parking spaces are sometimes available for purchase in new construction projects. The cost of a parking space can go as high as $300,000, and perhaps higher, who knows…Sometimes, rather than actually purchasing the space (that is, a “fee simple acquisition of real estate), the sponsor will create a “license agreement” in which the licensee is granted the right to use the space pursuant to the terms of the agreement, between the owner of the parking space (either the sponsor or the condominium) and you, as the owner of the apartment. For all purposes, the license is usually “irrevocable”, meaning the grantor of the license can’t terminate the license. The actual terms of the license agreement must be reviewed carefully to insure that the licensee’s rights to use the space can’t be revoked unless the licensee materially breaches the agreement, like allowing unauthorized parties to use the space. In most cases, whether a parking space is owned or licensed, the space will have to be transferred at the time that the unit owner sells the apartment in the building in which the parking space is located to either the purchaser of the apartment or to another owner in the building.