A Parking Space Lease Agreement is a document used by a company or an individual (lessor) when looking to rent out a parking space to another company or individual (lessee).
This type of lease agreement is often used in most commercial areas and big cities where it is hard to find a good, regular parking space. The parking space lease agreement can also be used in small towns and business complexes where extra parking spaces could generate extra income. However, there are little to no rules set in most states that govern parking space lease agreements, and they can be set for either a fixed term or on a month-to-month basis, depending on what the lessor and the lessee agree on.
NOTE: This contract generally runs for a month. Under some unusual circumstances, it may be charged on an hourly or daily basis.
Although both the lessor and the lessee need to agree on using the parking space, it is usually the lessor’s responsibility to set forth rules on liability for the lessee. In the parking space lease agreement, the lessor can establish standard clauses that indemnify them from any damages caused to the vehicle and hold the lessee responsible for any damages caused to the parking space during the lease term.
A parking space lease agreement can also be referred to as:
- Parking rental agreement
- Parking space lease form
- Parking space rental lease agreement
Things to Know About Agreement
Before drafting a parking space lease agreement, it is essential first to understand how the document should be used, how to use it, and what to do when the lessee defaults on the agreement:
How to use a parking space lease agreement?
A parking space lease agreement is similar to any other lease agreement, although much more straightforward. The lessee must agree to all the terms of the lease agreement and must agree to the terms, mode, and frequency of the payments as outlined in the agreement.
The lessee must first seek the lessor’s consent before subleasing the parking space to another party. The lessee is also tasked with ensuring the parking space is clean during the term of the lease. They are also required to register their vehicle and have a valid insurance cover when leasing the parking space.
Only the type of vehicle defined in the agreement is allowed to park at the designated parking space, and no personal storage may be allowed on the premises.
The lease agreement can be used if:
- One needs a parking space near their residential unit in a crowded city with limited parking;
- One needs a parking space that is close to their work;
- One has an extra parking space and would like to lease it to others;
- One is looking to rent someone else’s parking lot;
- One has two or more vehicles and is looking for an extra parking space to park their vehicles;
- One needs a private parking space when attending an event or business function
General Elements of Parking Lease Agreement
Parking space lease agreements are usually straightforward and do not include many ambiguous clauses. Most lease agreements include:
- Contact information: The name, address, and phone number of the parties involved
- Location of the parking space: The address, stall number, GPS information, and instructions on which gates to enter, and directions on how to open or close the gate
- Terms: When and for how long will the lease agreement last.
- Rent: The rent amount that the lessee will be required to pay and any late fees and other related fees. The agreement also defines the frequency for when such payments should be made.
- Description of the vehicle: Some parking areas have regulations on which type of vehicle should be allowed to park. If this is the case, then the lease agreement should define the type of vehicle allowed to park in the designated parking spot.
- Limitations: The lease agreement should highlight any limitations, such as no overnight parking or sleeping in the vehicle. It should also state whether the lessee is allowed to share the parking spot with other parties.
- Liability: The lease agreement should detail the type of security provided and those that the lessor will not be liable for, such as damage/accident of the vehicle or items stolen from the vehicle.
- Termination: The lease should have a provision on how it can be terminated. Everyday situations that lead to lease termination include nonpayment, breach of agreement, and mutual termination.
What Happens When a Lessee Defaults?
Since there are little to no laws set forth to govern the leasing of parking spaces in most states, it is usually up to the lessor to decide what to do to the lessee when they breach or default on the lease agreement. For instance, if the parking space is on private property, and the lessee defaults on the parking space lease agreement due to unpaid rent or not maintaining their vehicle in the required condition defined in the lease agreement, the lessee may be considered trespassing on the property. The lessor can provide the lessee with a notice to remedy the breach, charge them a fine or contact the towing company to have the vehicle removed from the property.
NOTE: Before contacting the towing company or taking further action against the lessee, the lessor should contact them to determine why they have breached the agreement and find an amicable solution to the breach.
Leasing a Parking Space
Before the ‘parking rental lease agreement’ comes to effect, it has to be filled out appropriately. This entails following some procedures. We devote this segment of the discussions to just that. Read through them here below:
Advertise the Vacancy
If you have some spare space to lease out, you will first and foremost have to advertise its availability. This is something you do via the local dailies, websites, yellow pages, and billboards. The advert should showcase the location of the property, the size, and the costs involved.
Receive and vet the applicants
You will receive numerous expressions of interest from persons with cars. Take your time to vet these applicants and ascertain their suitability for the rental space. Check their backgrounds, criminal records, and any other issue of interest which might matter with regards to the use of your space.
Draft and sign the Lease Agreement
A parking space lease agreement should be written with utmost care since it can be used as proof should any litigations arise. Below are the key sections to include when preparing the document:
The lease agreement should define the parties involved in the agreement. This helps define the relationship between the parties and sets clear why they are entering the agreement. Under this clause, the following should be included:
- The date of the agreement: This is usually the date on which the agreement was signed
- Lessor’s name: The name of the owner of the parking space/ the entity leasing out the parking space
- Lessor’s address: The mailing address of the lessor should be included in the lease agreement to be used for any correspondence with regards to the parking space
- Lessee Name: The name of the person/entity granted access to the parking lots should be indicated in the agreement as well as their;
- Mailing Address: The mailing address is used to forward any official correspondence regarding the parking space, i.e., payments due, end date, termination, etc.
- Parking Space: The size, address, and directions on how to get to the parking lot should also be included in the lease agreement
Term and Conditions
The second provision that should be included in the lease agreement is the “term,” i.e., when the agreement is set to commence and how the agreement can be terminated.
- Agreement Commencement: The agreement commencement date is when the agreement between the lessor and the lessee is to be considered active or in effect.
- Termination: Just like any other lease agreement, the relationship between the two parties can be terminated. A provision for when and how such termination may occur should be included in the agreement. The agreement should also indicate the number of days issued to either party when terminating the agreement.
Under the “rent” provision, critical items like the amount of rent due, the due date for rent payments, and the acceptable mode(s) of payment should be mentioned.
- Parking Rent Due Date: This is the date of the month in which the lessee is required to remit their payments for the parking space
- Parking Rent Amount: The lease agreement should indicate the exact amount the lessee will be required to pay each month to secure the parking space
- Accepted mode (s) of payment: The payment method selected should be convenient to all the parties.
All parking space lease agreements must have a “Governing law” provision that outlines the specific state laws used to resolve any issues regarding the lease agreement. When preparing the document, this provision should be included to clarify each party involved which state laws to refer to when making an argument about the lease.
- Applicable state laws: Parking lease agreements are usually governed by the state’s laws where it is located. Unless otherwise stated, the laws used to govern the lease agreement should be of the same state where it is located.
The parking lease agreement should be signed by the parties involved for it to be considered valid. Under the signature provision, the following should be included:
- Signature Date: The date on which both parties sign the agreement
- Lessor signature: The signature and print name of the lessor should be included
- Lessee signature: The lessee should also include their print name and sign against it
Lastly, the lessee has to move into the facility. This simply means utilizing the parking space for the purpose of stationing the vehicle, loading and offloading luggage from cars, and so on.
Free Lease Agreement Templates
Following are free Parking space rental agreement templates to be customized as per need:
There are no universal rules that define the violations of the ‘parking space rental lease agreement.’ However, the following are some of the common mistakes which the signees of this agreement may make when the agreement is in force:
- Sub-letting the space to another party
- Transferring the slot to a third party without the consent of the property owner
- Parking for longer than the agreed-upon number of hours
- Engaging in unlawful activities while parking the vehicle
Frequently Asked Questions
If your lessee engages in one of the afore-listed activities, you have to remove him from your property. It is important to notify the lessee privately and individually. Explain to him why the activity is unlawful and serves an eviction. Then, give him time to comply and reform. If there is no real change of heart within the ultimatum period, ask him to leave voluntarily. You will, thereafter, bring in law enforcers.
In some states, one may need a parking permit to rent out a parking space. It is therefore recommended to check with the local and state laws governing parking spaces before leasing.
The amount of rent collected from a parking spot usually varies with the location and demand of the parking space. For instance, in small cities, one can collect up to $50 a month and $150 per month in rural areas.
Yes, you can have a vehicle towed from your property. If the vehicle is parked in a way that prevents you from accessing your property or is blocking your driveway, you can contact the towing company and have them remove the vehicle.
Yes, you can rent out the driveway if you are the owner of the property. However, if you are renting or are a part of a homeowners’ association, there may be rules against doing so.