Parking Space Contracts Explained
At their core, parking space contracts are straightforward. They graciously confer the right to park a vehicle on a property in exchange for monetary payment. They secure an agreement between a commercial property owner and a tenant or a landowner and a licensee with a joint purpose to achieve convenience and parking security. Since they are written agreements, these contracts describe the relationship of the parties, and the agreed terms and conditions.
Parking spaces contracts primarily appear in commercial leasing but are not new to the real estate industry. These agreements fall under the broad family of easements, which provide rights to use real property and are included among a legal classification of property interests, with leases and licenses, that survive the sale or transfer of the property.
Although many modern contracts are drawn and executed electronically using industry standard forms with online payment, parking space contracts were once recorded in well-thumbed sturdy leatherette log books. These contract books contained a page for each client or customer car. The page recorded the name of the customer, the car make, model and license plate number. In lieu of a formal contract , the customer simply presented a receipt to the attendant to retrieve their car from a line-up generally parked one-car deep.
Parking spaces contracts may take several forms. The traditional lease is nearly always recorded with the local land registry office and provides for title to parking spaces. These space leases frequently require the tenant to pay rent for each space and receive a commercial tax bill on the vacant space. Many of these leases are governed by complex covenants that carefully prescribe an individual tenant’s rights to exclusivity and the right to free up necessary space upon a certain notice period. It is not uncommon to find a parent company in a corporate group leasing space for each business address.
Most modern parking spaces contracts are for a defined term such as weekly, monthly or annually. They may include both residential and commercial spaces with different rates and restrictions. Individual home and condo owners are starting to list their empty spaces for short-term rental online. Conventional types include secure hotel spaces, public mall parking and commercial venues and stadiums.
While a parking space contract must be in the written form and signed, parking spaces reserved for single-family homes are often cancelled verbally to clear space for friends or family to park while on a visit. Many users reflect their most frequent need and routinely cancel needed spaces to create room for an event.
The Components of an Effective Parking Space Contract
A number of key elements should be included in a parking space contract, including:
Parties: The parties should be identified in the agreement with full legal names and, if available, addresses. For an individual, the address for personal service should be appropriate. For companies, the address for doing business in the state should be given.
Description: The contract should include a detailed description of the parking space to be rented, including size and any special requirements of use.
Payment: The parties should agree on the fees to be paid by the lessee.
Term: The length of the parking space rental should be agreed upon or, if it is to be on an indefinite basis, the conditions under which it can be terminated.
Legal Parking Space Contract Considerations
The drafting of a parking space contract must take into account several critical legal factors specific to each jurisdiction where the contract will be used. First, there are certain local, state and national laws that apply to all contracts. For example, there must be a meeting of the minds, mutual assents and consideration. Additionally, depending on the jurisdiction, a contract can become void because of lack of capacity, unreasonable restraint and statutory illegality.
Further, it needs to be determined whether the governing body grants municipalities authorization to regulate private, residential and commercial parking lots and garages in that jurisdiction. Some jurisdictions give broad power to municipalities while other jurisdictions grant the power to municipalities to only adopt certain ordinances or regulations, such as those pertaining to size, design, construction, maintenance and repair. Finally, because a parking contract involves the use of land, it may be subject to certain public policy requirements, such as the rule against perpetuities. If the contract is to be executed in a jurisdiction that does not have specific ordinances or regulations, the parking lot or garage owner may want to draft specific regulations for that jurisdiction. If that is the case, it may be in the owner/operator’s best interest to seek experienced counsel to assist with the drafting process.
How to Edit a Parking Space Contract Template
To customize a generic parking space contract sample for specific use, one must start by identifying the locale where the parking space is located and whether there are any regulations that might affect the rental agreement. For instance, zoning laws or state statutes might set standards for security, safety, and accessibility features that need to be addressed in the contract. Next, tailor clauses to meet the needs of the tenant, if applicable. If there is a specific purpose for which the parking space will be used—such as for an event, for example—that limitation should be stated. Alternatively, if the space is for a specific type of vehicle, that should be specified.
A key component of the rental agreement is to clearly define what happens once the lease or rental period is over. What happens to the tenant’s property , such as a vehicle? Must the tenant take any steps to return the parking space to its original condition? These details will vary greatly depending on the type of parking space and the duration for which it is being rented, so they must be evaluated on a case-by-case basis. For instance, does the tenant need to ensure there is no salt residue left on the concrete after a snowstorm if the parking space is outdoors?
Don’t forget to add any necessary space for signatures and dates, as well as any relevant dated addendums that complete the customizations made to the contract template. Once you have added all pertinent details to your rental agreement, have an attorney review it to ensure that all legal requirements have been satisfied and that the customized contract does not conflict with existing laws.
Parking Space Contract Pitfalls
When entering into a parking space contract, many people make the mistake of assuming that a simple oral agreement will suffice. Leaving the details to chance can cause ambiguity later and should be avoided, especially when a written contract can clearly define the details of your agreement. In addition, it’s important to remember that both parties are responsible for adhering to the terms of the contract.
Common mistakes in a parking space agreement include:
Not providing specific details for your contract. Ambiguous terms like "professional behavior," or "reasonable notice" may lead to a misunderstanding of your rights during the course of the agreement and unclear obligations. Being specific as to time frames, tasks and consequences can help ensure that both parties understand the obligations hedged on them- thus allowing you to have the parking space when you need it. Not providing a binding contract. A person agreeing to rent you their car space verbally may think the agreement is moral, not legal, so they may change their mind when the time comes. Having a real contract in writing allows both parties the security and safety of a contract that stands up in court. This can help avoid awkward exchanges during trying circumstances. Not clearly stating your obligations. A parking space contract covers all the finer points that you and the owner will share during your use of the space- this means that you have to be sure that all pieces of your obligation are explicitly laid out in the contract. Leaving things to chance or to interpretation may lead to unintended consequences. Not seeking help when needed. Navigating the process of handling a parking space agreement doesn’t have to be difficult, but sometimes you might run into trouble when negotiating the terms. If you are unable to reach an agreement with the owner, remember that a mediator can help you get on the same page. Legal assistance may also be necessary to help ensure that you have a legal safe haven for your vehicle during times of need.
Checking and Finalizing the Contract
The process of finalizing and signing off on your contract is also a vital part of conducting your parking space lease transaction. Read this section closely to ensure no surprises will arise during the execution of this contract. Keeping in mind that you may need contract modifications from your original drafted copy, keep an open mind as you read through these suggestions.
Reviewing: Start by reading the contract slowly and carefully. Keep an eye out for any incompleteness, missing signatures or any items or clauses that you do not understand or agree with, such as the length of the contract, payment schedule, or amount of security deposit. Ensure that all of the blanks are complete before signing. Make sure that any terms of the rental, such as time of availability and specific rent payment instructions, are clearly noted.
Clarifying: Next, contact any individuals such as lawyers or experienced real estate professionals who can help you by clarifying or explaining any areas of the lease contract that you need assistance with. Above all else, make absolutely sure that you understand the payment schedule . Agreeing to sign a rental parking space with no understanding of how or when you will eventually pay is a huge financial risk!
Verify: Before finalizing the parking space rental contract, make sure you have seen at least two copies of the parking space contract, and double check that the correct version is being used. Check that you and the landlord are in agreement about anything you have added or modified before signing.
Finishing up: Finally, make absolutely sure that you have a simple, clear, final checklist that contains all of the following:
Once you have this checklist completed, validate its contents and make sure that everything is correct before one last review of the contract. Once you are completely finished with your review of the contract and are satisfied that the rental space is what you expected, sign and date the contract. Make at least three copies of the signed contract, so that at least one can be sent to the landlord, and you keep several just in case you need to reference your copy at some later date.
Remember, after the contract is signed it is recommended that you speak with a lawyer experienced in parking space rental contracts. Many problems can be avoided if you have the help of a professional during the process and obtain a few additional pointers on how to finalize and keep track of your rental including an overview of parking space laws relative to the transaction.