A Guide to Understanding Parking Agreement Contracts: Checks and Advice
What is a Parking Agreement Contract?
A parking agreement contract is a legally binding document developed to resolve parking disputes between property owners and drivers. Such disagreements are common on private commercial properties, residential areas, and other institutions where there are limited parking spaces. It is used to ensure that the company has total control of the parking spaces and that any vehicle which offends the parking rules may be impounded or towed without any delay .
Parking agreements are essential because they provide both car owners and property owners with a simple explanation of rules and regulations regarding parking rights. Where no arrangement is in place, vehicles can be parked anywhere on the premises, creating confusion among motorists where to park, leading to arguments between motorists and property owners over damages from tires or scratches from other cars. These agreements create a defined boundary about where a vehicle can be parked and activities to avoid within the parking facility.
Key Parts of a Parking Agreement
For a contract to be enforceable, it must include certain essential elements. These include:
Parties to the Contract-Who is involved? Each parking agreement will have at least 2 parties. On one side is the lessor (landowner) who owns the empty lot and the other side is the lessee who will actually use the lot for parking.
Term of the Lease – Complete Term of Parking Use-In addition to parties to the contract, the lease should set forth the beginning and the end of the time period of use. While some leases may be month-to-month (meaning they will continue until canceled), others will have a specific beginning and ending date. If the contract is indefinite, it may be terminated upon notice by either party.
Layout of Car Park-Where can cars be parked? All parking agreements should provide the layout of the property. Simple, larger lots may have no restrictions as to where vehicles may park. Other lots may have designated areas. The layout is used to assist landlords in making sure that lots are even and that lots are not overused.
Amount of Payment for Parking Lots for Lease-Monthly Use, Pay as you Park -While some parking agreements may set forth a specific fee for parking per day or per month, it may also charge a fee per use or even charge for parking based on the actual time parked.
Additional Charges for Additional Services-Pay Lots for Lot Maintenance and Upkeep -In addition to rental fees, the lot may have additional charges based on the actual services provided. For example, there may be a monthly fee for security or re-stripping the lot. In that case, payments may be made as such:
(a) Monthly Payments
(b) Per Vehicle
(c) Based on Time Use
They may also provide for one or more of the following:
(a) Security Deposit-Deposit is Due Upon Signing or Before Parking on the Lot
(b) Vehicles Owner Assumes All Risks
(c) Agreement Cancellation
(d) Liability Waiver
Types of Parking Agreements
There are several types of parking agreements that differ in terms, expenses, and purpose. Contract parking is only one of its types. To categorize parking agreements, they can be described as daily parking agreements, monthly parking agreements, and lease agreements. Each type serves a purpose for its owner.
Under a daily parking agreement, the tenant has the right to park its vehicles in its designated area for the hours that they are open. They release those spots each night. For example, if the parking area is open from 9 a.m. to 6 p.m., the vehicle must be removed by 6 p.m. The areas being leased are released on a daily basis, so the areas are available to the lessor as needed. Such agreements are for short-term use.
Under the lease agreement, these areas are not required to be vacated every day. The lessee leases a designated area for a specified term. It can be for a year or several months. It is like leasing an apartment. The lessee has the right to use the area until the term expires. In this situation, the person leasing the parking areas is required to keep the area clean, paved, and payment is usually made on a monthly basis. Other conditions may be placed on the lessee.
The monthly agreement is typically used by a business or individual who needs a designated area, but does not have the need for the area on a daily basis. It may be that the area is needed weekly or weekend use.
Legal Regulations for Parking Agreements
When drafting a parking contract agreement, it is crucial to be aware of the legal considerations that may affect its enforceability and terms. From state and local regulations to compliance requirements, a valid parking contract must take a number of factors into account.
To avoid future disputes and penalties, parking companies should consult with legal counsel when creating a contract. Although some provisions may be included in accordance with local parking ordinances, these ordinances are not sufficient to cover every situation. Care must be taken to understand the area laws that will apply to the client-for instance, state statutes regarding property damage or ordinances related to liability issues. An experienced attorney will be able to help the company ensure that the contract meets the relevant local, state, and federal obligations.
In addition, the parking contract should include a dispute resolution provision that details how conflicts will be handled. Whether or not the contract will be litigated or arbitrated, how disputes will be submitted, and which state law will govern the proceedings should be examined. Minimizing legal expenses while also creating a clear and enforceable process for resolving disagreements is crucial when negotiating a contract.
Finally, the parking contract must also comply with the Americans with Disabilities Act (ADA) and Fair Housing Act (FHA) should the client company park vehicles at apartment buildings or other residences. If the apartment owner will be incentivizing the tenant to utilize one of the few spaces that were allotted to that resident, a parking contract is a necessary legal agreement. A lack of written contract could result in a violation of the Fair Housing Act if the apartment manager is found to be providing incentives but is not adhering to the law.
Advice on Negotiating a Parking Agreement
When it comes to negotiating a parking agreement, both parties have unique concerns and interests. The landowner, as the owner of the land, must protect its legitimate use and access to the land even when a tenant is parking its vehicles there. The tenant, as person who uses the land, amongst other things, must have the assurance that it will have the ability to use the land and that the property will be maintained and secured.
So how do both parties negotiate a parking agreement that protects their interests and will be enforceable if the need arises? What are some tips to ensure that the parties clearly understand their rights and obligations under the parking agreement?
- Review the Reciprocal Easement Agreement. In the event the parcel where the vehicles are located is part of a reciprocal easement and operating agreement with the other parcels in the property, make sure you review it. You don’t want any conflicts with it or with the Association.
- Contact the Association. The rules may also be detailed in the Association’s governing documents or in its Articles of Incorporation. Contacting the Association will help you get a better idea of its process for approval , if any, for the parking agreement.
- Get Insurance. Parked vehicles are always at risk of being damaged by various means including by vandalism, fires or natural disasters. Require that the tenant obtain adequate insurance. If it needs assistance, they can look to the Association in getting a referral to an insurance broker.
- Contract the Right Use. Make sure you know what the vehicles will be used for. You want to make sure that the tenants or people using the space will not use the area for criminal activities or unlawful or immoral purposes.
- Document Everything. When it comes to drafting the parking agreement or communicating with the other party through documents, make sure you document and keep everything. Turn your e-mails into documents by printing them out. If anything goes wrong, documentation always helps.
- Define Everything. Ambiguity in any Contract leads to confusion and potential legal battles. Define all the terms in the agreement.
Frequent Problems and Potential Solutions
When it comes to parking agreements, both property owners and tenants need to be mindful of the potential issues and risks which may arise during the term of a parking agreement.
One of the biggest concerns for property owners is liability for damages to their properties and injuries sustained by third parties using their property for parking. In these cases, property owners are generally concerned about their liability as an owner or occupier. In addition, property owners are also concerned about their liability for damages to private vehicles using their property. Addressing these issues in a parking agreement can lessen the liability which property owners might otherwise face.
A common issue regarding damage to property is whether the property owner or their commercial tenant is liable for damages to parked vehicles upon their property. One way to address this is to include a provision in the agreement that all users of the property are aware that their vehicles are not protected from damage. While this will not protect a property owner, it will reinforce the point that the property owner is not liable for such losses.
Another common issue in parking agreements is the potential unauthorized use of the parking area. Unauthorized use can happen when individuals or entities other than those to whom permission has been granted use the parking area. Allowing non-permitted individuals to use your parking area increases your liability for loss or damage caused to your property, vehicles or other areas. To reduce the risk of unauthorized use, property owners should consider limiting possible users or requiring that users display a permit on their vehicles so they can easily identify those who use the property.
Damage to property can also occur due to abnormal wear and tear from heavy use. In order to address damage due to abnormal wear and tear, property owners and tenants should enter into an agreement which sets out the terms for use. It is also important that the agreement specifies that the tenant is responsible for any damage to the property beyond normal usage. This will allow the property owner to recoup any losses due to damage and reduce liability all-around.
In addition, it is important to ensure that your parking area is set up so as to reduce the likelihood of damages to the property or vehicles. Consider removing potholes and debris, marking parking spaces, monitoring the parking area or restricting the use of certain vehicles (i.e. oversized vehicles) where appropriate.
Parking Agreement Tools and Resources
While the creation of a simple contract can be a fairly straight-forward process, the sheer number of vendors and customers involved in typical parking leases, along with the ongoing, evolving details of businesses’ needs and requirements, lend themselves to templates and pre-existing legal forms as time savers. A correctly drafted template will help landlords and tenants avoid mistakes, as well as minimize the possibility of miscommunication or potential litigation in the future. Essentially, parking agreements come in two forms: templates for do-it-yourselfers and online tools that point and click users through the drafting process for a custom contract tailored to the parking lot in mind. Texashomesteader.com provides more than a dozen templates for lease forms including an auto repair facility parking agreement template and a car wash parking agreement template. Also , numerous Web sites provide free, customizable forms for use by individuals at law firms and from various industries. One such available forms library includes a sample monthly parking lease on eforms.com. The online forms provider also includes a guide to dating and time periods associated with parking spaces and lots. Online form resources also include plenty of tips and tricks, such as for instance, ormana.com providing checklists for creating legally sound parking agreements. However, for those who are more comfortable using automation, a number of tools and applications help users through the drafting process while ensuring grammatically correct wording and clauses, adding clauses as necessary, and enabling users to create the document without starting from scratch.