Brief Introduction About the Parking Agreement
When you own a car but do not have space to park it, it can cause great inconvenience. To address this issue, the car owner can enter into an agreement with the owner of a parking space. The parking owner becomes the landlord, and the car owner becomes the tenant. The agreement is called a parking agreement. The parties may be individuals or companies.
Also known as parking space lease agreement, parking lease agreement, and parking lot use agreement, it states where the tenant is allowed to park his vehicle. It also contains other terms such as the duration of the agreement, the rent to be paid, and other expenses. It is a legally binding contract that must comply with the relevant federal and state laws.
Who Takes the Parking Agreement? – People Involved
The following entities can use it for their benefit:
- A company with parking space renting it out to another company/individual.
- An individual landlord renting extra parking space to his tenants.
- An individual renting out his parking facility to drivers.
Purpose of a Parking Agreement – Why Do You Need It?
This agreement is very helpful for people who live in a crowded place with limited parking and need a parking space near their residence. It also serves the purpose of families who have more than one vehicle and require space for parking. It allows individuals having parking spaces to lease them out and generate an income. Since it is a contract, it ensures that parties carry out their responsibilities or face the consequences. Thus, it protects them from unfavorable situations. It lists out all the conditions of the arrangement in a precise manner. Hence, it ensures that there are no misunderstandings between the parties involved. Even if disputes arise, they can be handled amicably as per the terms of the agreement.
Contents of the Parking Agreement – Inclusions
A parking space rental agreement usually contains the following key terms:
- Names of the parties
- Date of the agreement
- Address of the parking lot
- Granting the use of the parking space
- Duration of the agreement
- Limitations
- Fee for the parking spot
- Waiver of the landlord’s liability
- Maintenance and repair
- Security
- Indemnification
- Insurance requirement
- Termination of the agreement
- Notice requirements
- Dispute settlement
- Governing law
- Signature of the parties
How to Draft a Parking Agreement?
A parking rental agreement is a relatively simple document to draft. It should ideally contain the above-mentioned terms. The following points should be kept in mind while drafting it:
- Mention the legal names of the parties, not their nicknames or brand names (for companies). If one or both parties are companies, mention their registered business address after the name.
- State clearly the address of the parking space to avoid confusion regarding the exact location of the spot.
- State for how long the agreement will stay in force. It can be for a specified term or month-to-month basis. Mention the start and end dates.
- If there are any limitations that the landlord has set, they must be expressed clearly. For example, the landlord can park his own vehicle at the space under certain circumstances, and the tenant will have to make an alternative arrangement for that time.
- State the fee that the tenant has to pay to the landlord for using the parking space. This clause must also mention when and how such a fee has to be paid.
- One of the most important terms in the agreement is a waiver of the landlord’s liability. This term must be drafted precisely. It states that the landlord will not be liable for any damage to the tenant’s vehicle parked in the specified parking space. This extends to the tenant’s customers, agents, and employees, in case the tenant is a company.
- Mention who will be responsible for maintaining and carrying out the required repairs in the parking space. Clarifying this issue in the agreement prevents unnecessary disputes later.
- State who will be responsible for ensuring the security of the parking premises or if the tenant can make own arrangements for it.
- If the landlord requires the tenant to meet certain insurance requirements (such as motor insurance), write them clearly in a separate clause.
- Have a separate clause explaining the circumstances under which the agreement can be terminated before its stipulated time. Also, state the consequences that will follow if it is terminated for any other reason not mentioned in the term.
You can also draft specific rules regarding the use of the parking space and hand it to the tenant along with the parking spot lease agreement.
Negotiation Strategy
Usually, the landlord has the upper hand in the negotiations for a parking agreement. He dictates the terms and establishes liability for the tenant. If the tenant is an individual, there is little scope for negotiation. Standard terms such as waiver of landlord’s liability, indemnification, and dispute settlement are generally not negotiated. However, the tenant can negotiate the duration and fee under the agreement. Both parties have to ensure that they come to a common ground in their discussions so that the terms are acceptable to all.
Benefits of a Parking Agreement
- It allows a landlord to earn an income.
- It helps people find a convenient parking place for their vehicles.
- It clarifies the terms and conditions of the parties. This helps in preventing disputes.
What Happens in Case of Violation?
Most agreements mention a dispute resolution mechanism(1). In case of a violation, the parties will follow this method to solve their issues. But they can also seek relief from the local court of the state whose law governs the agreement.
It is a fairly simple but important agreement to have in place. It offers the convenience of safe and reliable parking space for owners of vehicles. It must comply with the applicable contractual laws and regulations.