Parking Space Rental Agreement

What is a parking space rental agreement?

A parking space rental agreement can be used to rent out a parking space within private commercial property. This agreement is designed for use in England, Wales and Northern Ireland. Where the parking space is based in Scotland, a different agreement should be used.

Is it mandatory to have a written parking space rental agreement?

No. It is possible to grant permission to use a parking space verbally or informally. It is however helpful to have a written agreement so that each party has a clear understanding of their rights and responsibilities.

What is a licence to occupy?

The formal legal term for this type of parking space agreement is a 'licence to occupy'. A licence is a contractual agreement that permits a person or legal entity to do something. A licence to occupy therefore permits a business to occupy a space or part of a property but does not grant a legal interest or sole possession of the property.

A licence to occupy is less formal than a tenancy agreement. A business tenant will enjoy exclusive occupation of the relevant property and will have particular rights and responsibilities.

What are the prerequisites of a parking space rental agreement?

Before a landlord enters into a parking space rental agreement, they should:

• check the terms of their insurance – to ensure that renting the space does not impact this
• ensure that they have the legal authority to enter into the agreement (i.e. they own or have the appropriate legal interest/permission to let the property)
• check whether they need permission from their mortgage lender (if applicable)

Who can enter into a parking space rental agreement?

The landlord and tenant may be natural persons (in which case they should be over 18 and have full capacity). The landlord and tenant may also be corporate entities (such as a company or a LLP).

What can the duration of a parking space rental agreement be?

The parking space rental agreement can remain in place indefinitely, but the agreement may be terminated at any time by providing a specified amount of written notice.

What must be done after the parking space rental agreement has been signed?

Each party should retain a copy containing the signature of each party.

The agreement is not reviewed by a lawyer to ensure that the legal content applies to the personal situation of the parties. In order to review the particulars of the agreement, it will be necessary to instruct a lawyer. It will be necessary to consult with a lawyer who is regulated by an approved regulator in the legal services sector. It is possible to search for a lawyer using the Law Society find a solicitor page in England and Wales or Northern Ireland.

What documents should be attached to a parking space rental agreement?

A plan can be attached to the agreement. This can help clarify the boundaries of the property and the spaces that are available for use.

What happens if the parking space rental agreement is not adhered to?

If one party breaches the terms of an agreement the other party may wish to:

• send a formal warning to the other party
• terminate the agreement
• consider taking steps to issue court proceedings

Do any other formalities apply to a parking space rental agreement?

The parties might wish to receive advice about the terms of the agreement.The lodger agreement is not reviewed by a lawyer to ensure that the legal content applies to the personal situation of the parties. In order to review the particulars of the agreement, it will be necessary to instruct a lawyer. For this type of agreement, it will be necessary to consult with a lawyer who is regulated by an approved regulator in the legal services sector. It is possible to search for a lawyer using the Law Society find a solicitor page in England and Wales or Northern Ireland.

What should a parking space rental agreement contain?

The parking space rental agreement should:

• include a term granting a licence to occupy – this will grant permission for the relevant party (the renter) to use the space
• include the terms of occupation - this will define the space which may be used under the agreement and whether there are any specific hours of use
• define the payment terms - this will explain how much money the relevant party must pay to use the space, and how frequently the payment must be made
• define any particular rights and responsibilities of each party – this will include information about security and safety
• include a notice period – this will explain how much notice each party must provide to bring the agreement to an end

What laws apply to a parking space rental agreement?

The key legal provisions regarding the distraction between commercial tenancies and licences are:

• Pointon York Group Plc v Poulton | [2007] 1 P & CR 6
• The Landlord and Tenant Act 1954
• Business Tenancies (Northern Ireland) Order 1996

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