Parking Rights in Leases – What to Consider
Tenants commonly have problems in their commercial leases with “parking”. Lauren Walker, an Associate in our Real Estate team, looks at what to consider in relation to parking when negotiating terms for your lease.
Perhaps the commonest issue that arises for tenants, when in occupation of premises under a lease, is that of parking. What rights do I have in respect of parking? Which spaces am I allowed to park in? Can you move my spaces around? Can I have a disabled person’s space near the door? Can I double-park? How can I stop people using my spaces? Are there tickets, passes or parking permits? Who deals with obstructions, signs, painting and repairing the car park? Is there a barrier? Does it have good lighting and CCTV coverage?
Many of these issues can be dealt with by agreeing with the landlord early on the right terms on which you are permitted to park at the property.
There are several options open to you as a tenant, each with varying degrees of control and responsibility. You should consider each of the options carefully when agreeing the terms of a lease with the landlord, as this will avoid protracted negotiation of the lease. This will also help avoid problems once the lease has been entered into.
The options for parking are as follows:
Demised Parking Spaces
Car parking spaces can be included within the demise of the premises granted to you under the lease. This will mean, in simple terms, that the (usually red) edging delineating your space will include however many parking spaces you have negotiated with the landlord as well as the property being demised to you. You will then have “exclusive possession” of those parking spaces, meaning that no one else will be permitted to park in them. However, it is also likely that, because they are exclusively demised to you, you will also be solely responsible for the repair and maintenance of these parking spaces, rather than the landlord who would otherwise do it and recoup the cost for those repairs from you via the service charge. This does give you greater control over when the works to any parking spaces are carried out and the costs involved, but it also means that the onus is on you to do the works. It can be proportionately more expensive (and less aesthetically attractive) to patch rather than to resurface the whole.
Rights to Park
An alternative option is to have a right to park, but this comes with two alternative options in itself:
- General right to park
You may wish to have a general right to park in any space(s) within the car parking area on a first come first served basis. This comes with the risk that the parking area may be full and/or you would be competing for parking spaces with other tenants of the building. However, this does come with the flexibility of being able to park anywhere within the parking area, but people can soon be surprisingly territorial!
This can be limited to a specific number of parking spaces, or be unlimited.
- Exclusive right to park in allocated parking spaces
An alternative option is to agree that specific parking spaces will be allocated to you and your employees/visitors to use for the duration of the term of the lease. This means that you will have guaranteed parking spaces and you will then not have to compete with other tenants to use your own parking area.
In order to reduce problems once the lease has started, you may also wish to consider what other rights you need to help protect the parking arrangements which you have agreed. For example, agreeing with the landlord at the outset a right to put up signs or paint markings on the spaces which indicate that the spaces are yours (often installed by the landlord as a service cost to keep costs down and to ensure a consistent ‘look’), or alternatively a right to erect bollards or chains to prevent others using the spaces. Such provisions should be inserted into the lease at the outset and will avoid any need for future negotiation and/or consent.
Where you are granted only ‘rights to use’ parking spaces, it is usual for the landlord to be obliged to repair the spaces (along with the rest of the car park) and to recoup the costs of that from you via the service charge. You would usually expect the landlord to recoup a “fair proportion” of the reasonable costs of repairing any parking area and this may be based on the number of spaces you are permitted to use compared to the number of spaces serving the building, or premises floor area is the spaces are allocated by floor area: it’s worth checking. If the landlord rents out stand-alone car spaces, they should bear their fair share of the car park costs.
You should consider carefully the parking area available and the extent of control you want to have in respect of any parking arrangements as well as to what extent you want to be responsible for the repair and maintenance of any parking spaces.
In both scenarios it is usual for the landlord to be obliged to grit, clear snow and to repair the accessways and any private roads, and to recoup the costs of that from you via the service charge: if the roads and parking areas are in a poor condition when you move in you may want to exclude or cap the charges to you if they were to be improved.
Landlords would be wise to require parking passes or permits to be issued, unless there is barrier control. If you lose a parking pass you can expect to pay a surcharge for a replacement.
If you want help with car parking issues and/or negotiating heads of terms for your new letting please contact our Real Estate team who will be happy to assist.