All About Parking Lease Agreements
Parking lease agreements are critical components of any complex that offers comprehensive parking services. One of the better descriptors of a parking lease agreement is to think of it as a "mini-lease" or "mini-licence" because the essence of a "lease" or "licence" remains the same. The agreement is a fat that permits one party (i.e. the tenant, lessee or licensee) the ability to use and occupy another party’s (i.e. the landlord, lessor or licensor) property.
It is also important to include a parking lease from the developer’s perspective where the arrangement between the parties may also constitute an assignment of property interests from the developer of the complex to the eventual owner of the property. Moreover, parking lease agreements are separate from the lease for the space in the complex. Thus , a tenant in a group of complexes or a business that manages a number of complex may enter into several parking leases with the landlord.
Parking lease agreements also arise because lessees at the complex may only be leasing the space for a short period. For example, the owner of a strip mall may wish to grant its tenants multiple types of rights:
The net result of this arrangement is that the mall’s owner may choose to sell parking spots to car owners with the expectation that he will see a return on the money he paid for the parking spaces. Moreover, the owner of the complex may wish to collect money for the rental of a portion of its spaces to other commercial enterprises such as valet services, party or event service or catering companies.
Elements of a Parking Lease Agreement
At its most basic, a parking lease agreement must include the terms of the contract. These essential components are the cost of parking, the duration of parking, any liabilities for damages to the premises and termination conditions. More specifically, your parking lease must include the following details:
- The cost of parking – this might be a flat monthly rate, daily rate or hourly rate. It must include all of the taxes that are relevant to the agreement
- The duration of the parking – if it is a one-time contract, the specific date that all terms must be completed. If it is a long-term lease agreement, the full term of the lease agreement must be specified, as well as the option to extend the contract if applicable
- A description of the responsibilities of both parties – terms related to who is responsible for cleaning and maintaining the premises must be spelled out in the contract
- Insurance requirements – these requirements could specify that the driver or the owner carry liability insurance or require that the parking space have a certain level of liability and/or property damage coverage
- Termination conditions – the termination conditions should cover what happens if the terms of the contract are not completed, including who has the right to terminate in the case of damages or other issues.
The above details are the basic framework of any parking lease agreement, but there are elements that go above and beyond these crucial details that can streamline the process for both the landlord and the tenant. More comprehensive agreements will include additional details that can be very helpful in the future, including:
- Specific penalties for damage to the premises, including information on whether the cost of repairs will be extracted from the lease payment, or if the tenant is responsible for the cost
- An explanation of what happens if the terms of the parking lease are not fulfilled by either party
- A description of any amenities included in the parking agreement, such as valet parking or special services
- Parking lot operating hours and guidelines
- Restrictions on what vehicles can and cannot be stored on the property
- Information on move in or move out procedures, which is particularly useful for long-term parking leases
- A description of the ways the tenant should interact with the landlord, such as who will facilitate access to the premises
- Notice periods that are required should any party decide to terminate the contract. These notice periods are often defined in days, months or years.
Having specific conditions and penalties spelled out in a written lease agreement is a good way to prevent issues in the future. If you decide to create this kind of documentation on your own or if you need help interpreting an existing contract, a qualified legal professional can help you with the details of the parking lease agreement process.
Advantages of Using a Sample Parking Lease Agreement
The use of a sample parking lease agreement comes with several advantages. First and foremost, it streamlines the drafting process. Rather than having to create an agreement from scratch, you can simply find a document that has most or all of the essential elements in place. You may still have to add or remove a few terms to make a generic agreement fit your particular situation, but it will still save you quite a bit of time.
Another benefit is that using a sample agreement can help to ensure that you are conducting business in accordance with local laws and regulations. A typical parking lease agreement contains a long list of provisions that are meant to cover a variety of contingencies. When you see everything laid out, you will not have to wonder whether or not there was an important detail that you verbally agreed to but forgot to include in your written contract.
Seeing all of the standard terms in one document can also be useful for negotiating with the parking leasee. If they know what the typical terms are for a particular location, they will not waste valuable hours discussing terms that are otherwise non-negotiable.
How to Personalize a Parking Lease Agreement Sample
Customizing a sample parking lease comes down to addressing the different issues that may be unique to the property. The sample agreement already contains important points such as dates, address, owner name and renter name, amongst other issues. A landlord or property owner or management company may want to stipulate that rent be paid early and not late. They also may wish to include a late fee for failure to pay by a certain date such as the 10th of the month. The tenant may be responsible for different utilities and electric. Some lease agreements state that the tenant is responsible for snow removal.
Some landlords will research what others charge for rent in their area. Whatever the amount is, it may be charged either monthly or weekly. In cities where the cost of living is higher, such as New York, it may be more expensive.
Parking tenants may also want to know if they can receive a discount for multiple spaces . What if they need additional spaces? Are they available? How many as well? Sometimes property owners will allow tenants to rent one or two spaces, but one will be available for guests. No overnight parking is sometimes stipulated on parking leases.
Others may want to know what happens if they break the lease. A sample lease agreement states what the amount of penalty is. There may also be penalties or fees if the tenant happens to be tardy paying the rent. Additional fees may be charged for changing the locks on a car for a lost car key.
For some leases, the landlord may provide access to a restroom in the building. Some leases also state that the tenant must submit a security deposit. Other leases outline insurance requirements. Often renters are required to provide proof of insurance prior to entering into an agreement.
A parking lease may be terminated on a specific day or on a 30-day notice. The lease may be renegotiated when the time comes to renew. It is also important to make sure that the agreement states if parking is reserved.
Parking Lease Agreement Mistakes to Avoid
Parking lease agreements are generally considered less formal than most commercial lease types. However, you should understand the fact that, whether there is a written lease or not, parking leases can be expensive to terminate. Rarely is it easy to cause someone to vacate from leased premises, and if there are other customers competing with the customer leasing the space, you will have no way of knowing how much business your business might lose if you terminate a parking lease agreement with someone who has leased the space for years. Here are some common mistakes people make when leasing or terminating a parking lease agreement:
- Proceeding without a written lease: Whether you need a written lease agreement for parking exclusively depends on the jurisdiction. You should find out if your jurisdiction requires that parking leases be for a term of less than one year. If so, and if your parking lot is heavily used at certain times, it may be useful to have a lease that can be terminated when the land is needed. In some states, the failure to obtain a lease for parking for a business could create a prescriptive easement in favor of the person leasing the space. Prescriptive easements are generally hard to terminate and if the person does not want to vacate, then the person may have the right to pay rent that is more than your business was willing to accept.
- Forgetting to evaluate the length of the lease: Park leases vary because the lots can be full one day and empty the next. If you are willing to provide a customer with exclusive use of a space, then you should insist on a time period to evaluation for your terms. Without some kind of notice provision, you might find yourself leasing to a customer for years and frustrated with his moments or hours of parking ahead of others. Common provisions of a parking lease that are often important to consider include terms such as renewal, modification and termination (and its conditions).
- Not understanding the difference between an easement and a lease: An easement allows the leaseholder to use land, while a lease creates a possessory interest. If you think you are leasing land, you may already have given a tenant an easement (based on the tenant’s use of the land for years). Some customers will not lease but will demand the right to an easement to use limited areas of land for some purpose. If your jurisdiction does not require written leases for parking lots, you may have a lot of tenants who are considered licensees and do not have possessory rights in the land.
Legal Aspects of a Parking Lease Agreement
There are a number of considerations to keep in mind when leasing space for parking that extend beyond the scope of your run-of-the-mill real estate lease… and you don’t want to find yourself on the short end of the stick because of an avoidable landmines based on these factors.
Things to Consider
In some cases, the landlord is going to retain oversight over the actual use of the parking spaces. That may include, for example, the ability to designate reserved spaces for certain tenants or their guests or to take back a certain number of spaces in the event that those spaces are to be used as the landlord designates. Even so, the lease should allow for a reasonable "cure" period with which to resolve any issues before the landlord seizes any spaces or charges a fee for the tenant’s continued use. Generally , no tenant in the office or multifamily context wants to find themselves ousted from their parking space so make sure that you build in a grace period if you ever find yourself in the position of having to comply with some technical definition in the lease which might implicate some "violation" on behalf of the tenant.
Aside from the number of spaces available and the cost of each space, there are a number of other acoustics, health, and safety variables to keep in mind when it comes to parking. For instance:
These are just a few of the factors that must be borne in mind when negotiating the terms of the lease. The failure to negotiate the terms of your parking lease can result in unforeseen pitfalls, so give it all the attention you can muster.
Specific Laws
500-3500
New York State Real Property Law – Section 234 – Possession of Demised Premises and Rent During Continuance of Unlawful Detainer