By Edmund Allcock

It should come as no surprise that the City of Boston has begun separately taxing parking spaces.  Parking spaces are valuable, especially in the city often selling for six figures.  It’s an opportunity for big revenue.  However, they should not be separately taxable if they are part of the condominium common area.

G.L. c. 183A § 14 provides that portions of the common area are not separately taxable.  Units are taxable.  If there is some common element or limited common element that improves the value of the unit, the assessment should take that into account in the assessment of the value of the unit.

Tell that to the City or the Appellate Tax Board, which routinely decides taxation matters in favor of the Towns or the Cities.  In the case of Murrow v. Board of Assessor of Boston, the Massachusetts Appeals Court has upheld the separate assessment of real estate taxes on a parking space at the Charles Bullfinch Condominium.  The distinction relied upon by the Assessor, the Appellate Tax Board and the Appeals Court (Singh, J.) was that the parking easement was an easement in gross (as opposed to appurtenant), meaning that it could be transferred freely and distinctly from the condominium unit.  In fact, the holder of the Easement in this case did not own a unit at the Condominium, she owned the space separate and apart.  The Court cited G.L. c. 59 § 11 and Rauseo, 94 Mass. App. Ct. at 517.  The Court found that the easement in gross was a present possessory interest in real estate that was appropriately separately assessed under G.L. c. 59 § 11, even though the parking space is physically located and a part of the common areas of the condominium.

While, the Decision in this case is “too bad for Murrow”, its reliance and distinction on the fact that the easement is in gross and not appurtenant is a sign that a court likely would not uphold separate real estate tax assessment on appurtenant parking easements in condominiums (i.e. parking spaces that are attached to a particular unit and cannot be transferred apart from the unit).  It also may be instructive to developers and condominium associations.  Appurtenant is better for a number of reasons in most cases, including but not limited to security and ease of maintenance and assessment.  Furthermore, taxation of a parking easement on its own and as a stand-alone is a lot less complicated than if it is bundled as part of a larger condominium package.

For a copy of the case [CLICK HERE].

Written by

Ed Allcock

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