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 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 allows 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 tenant will enjoy exclusive occupation of the relevant property and will have particular rights and responsibilities, including obligations to maintain the property.

What are the prerequisites of a parking space agreement?

Before a landlord enters into a parking space 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 agreement?

The landlord and tenant may be natural persons. In this case, the parties should be over 18 and have capacity. Capacity refers to a person's ability to make and understand decisions.

The landlord and tenant may also be corporate entities (such as a company or a LLP).

What can the duration of a parking space agreement be?

The parking space 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 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 happens if the parking space 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 (a breach of contract notice)
• terminate the agreement
• consider taking steps to start court proceedings

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

The parking space 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 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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