Real estate developers are not always aware of a potential obligation in construction law, namely the provision of additional parking spaces if refurbishment works result in an area increase or if there is a function change to the real estate concerned.
But how are additional parking spaces calculated and what needs to be done if no additional parking lots can be constructed? Either additional construction work or the payment of a redemption fee, which usually comes as an unexpected cost.
Governmental decree no. 253/1997 (XII. 20.) on town planning and building requirements ("OTÉK") defines the required number of parking spaces. The required number of parking spaces for a newly developed building depends on its function and can be calculated as follows: OTÉK defines that one parking space needs to be provided for each guest room of a hotel, each 20m2 net area of an office building, 1500m2 net area of a warehouse or 5m2 net area of a catering unit etc. Local building laws issued by cities, towns or municipal districts may deviate from these numbers.
For instance there are local building laws in certain districts of Budapest which stipulate that in case of a hotel development only 50 % or 25 % of the new parking spaces required by OTÉK shall be provided. In any case it should be considered that the number of additional parking lots needs to be calculated by the commenced area, i.e. in case of construction of 19m2 office area it is one, but if the area increases with net 25m2, then two parking spaces should be provided.
When determining the number of additional parking lots required in case of function change or area increase in existing buildings, although there is no clear rule in the OTÉK, in practice the building authority and the architects may follow a very specific method: a so-called theoretical parking number ("elvi parkolószám" or "örökölt parkolószám") is computed to which an existing building would be entitled if it was newly developed and it is taken as basis instead of the actually available parking lots.
An example of the function change of an existing building: the theoretical parking number of an office building constructed in the 1960's with a 1200m2 net office area is 60 (because the current rule sets out one parking lot for each 20m2 net office area), even if factually only 40 parking lots are available. If such property would turned into a 45-room hotel (whereas the current rule sets out one parking lot for each guest room), then in fact no additional parking space would be required because the total parking number for a hotel (45) is less than the office building's theoretical number (60) even if only 40 parking lots are actually available. It is to be noted that in case of function change in monument buildings no additional parking space needs to be provided if there is no area increase.
An example for the area increase in an existing building: if a simple refurbishment project is done in which 40m2 kitchen/restroom is turned into a 40m2 newly developed net office area in a one year old office building, then the developer can easily face the legal obligation to provide two additional parking lots, based on the current rule that one parking lot is required for each 20m2 net office area in case the refurbishment is subject to a building permit.
If there is no technical possibility to provide the required parking lots, they should be redeemed from the local municipality. The amount and the calculation method are usually included in the local building laws and the regulation vary from town to city or municipal district. For example, the redemption fee of a non-residential parking lot in Budapest's 6th District can amount to HUF 6,325,000/piece (approx. EUR 18,100) whereas in the Kecskemét inner city, parking lots were redeemed following an individual negotiation for HUF 810,000/piece (approx. EUR 2,300).
The parking number balance ("parkolómérleg"), i.e. the number of required parking spaces needs to be calculated and established by the architect in the technical description as part of the building permitting documentation and should be verified on a case-by-case basis by the building authority. In case of a function change or a fit-out project, it needs to be carefully assessed in advance whether this will constitute an obligation to provide additional parking lots for the developer. If these cannot technically be provided, the associated redemption cost should be anticipated.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.