A Brief Introduction of Parking Space Rental Agreement
Parking Space Rental Agreement is an agreement through which parking space is rented out by the owner. Many people choose to enter an oral agreement in a situation like this, but it is always recommended to enter a written agreement as this helps lay down all the terms of the agreement between the two parties. A written agreement must be created to lay down the various details regarding the parking spot and how it shall be used. The various rights and obligations of both parties can also be laid down. This agreement may also be known as a parking lot lease agreement.
Who takes the Parking Space Rental Agreement
This agreement is made between the owner of the parking space (known as the “lessor”) and the person who wishes to rent it out (known as the “lessee”).
Purpose of the Parking Space Rental Agreement
The purpose of this agreement is to serve as evidence of the terms under which the parking lot lease will function. Through this agreement, the owner can prove that the parking space has been leased out. Hence, whenever the owner of a parking spot chooses to rent it out, he must create a lease agreement for the parking space. Whatever details have been mutually agreed upon by both parties must be laid down in the agreement. This can go a long way in preventing a dispute between the parties.
The main purpose of any agreement is to serve as a record of the mutual understanding between the two parties who are bound by it. It is proof that once the parties have signed the agreement, they have agreed to all the duties and obligations mentioned in it.
Contents of the Parking Space Rental Agreement
Firstly, the contract must include the names and contact information of the parties who are entering the contract. It must then mention the date on which the agreement is created and the territory in which the agreement shall be operative. The agreement should contain the location coordinates of the parking lot. This means that a detailed address of the spot and the parking number must be mentioned. GPS information, such as what address is to be entered into a GPS device may also be included.
The contract must then mention the term for which the parking space is being leased out. The parties can choose to enter a lease for a term of one year, or they can also create a month-to-month lease. Such a lease has to be renewed every month. The amount of rent that is payable by the lessee must be laid down in the agreement. Details like the date by which the rent must be paid, and what penalties shall be applicable in case of delayed payment or non-payment must be stipulated.
The parties may also choose to insert a liability clause in the agreement. This clause absolves the owner from any responsibility in case any damage that is caused to the lessee’s vehicle, or if any item is stolen from it. Finally, the contract must contain a termination clause which shall state the situations in which the agreement may be terminated by the parties.
How to Draft the Parking Space Rental Agreement
The following are the steps to follow while drafting parking space rental agreements:
- The parties will first have to decide on how the lease will function. They will have to determine the rent amount, the term of the lease, etc.
- Once all the details have been decided, the agreement has to be drafted while providing for the rights and duties of both parties.
- The agreement will then have to be reviewed and signed by the parties.
- In this type of agreement, the negotiations will mostly revolve around the rent amount, the term of the lease, penalties in case of non-payment of rent, and the liability clause.
- The parties must make sure that the interests of both parties are adequately protected.
Benefits and Drawbacks of the Parking Space Rental Agreement
The following are the benefits and drawbacks of having this agreement:
- The first benefit of this agreement is that it serves as proof of all the terms agreed to between the parties.
- The owner has certain remedies in place in case the lessee does not fulfill his obligations under the agreement.
- Through a written agreement, the owner can limit his liability in case of any untoward incident.
What Happens in Case of Violation?
The agreement will contain a clause that lists out the actions that can be taken by the lessor if the lessee violates any of his duties under the agreement(1). For example, if the lessee does not pay his rent on time, the lessor can serve a notice to him asking him to pay the rent by a specific date. If the lessee fails to do so, the lessor is well within his rights to terminate the agreement(2). He can then take possession of the parking spot. In case the lessee continues to use the space even after such termination, the lessor can have his vehicle removed from the parking spot.
In conclusion, this agreement is needed whenever a parking space is rented out. The parties can set down the agreed terms in writing and thus protect their individual rights and interests.