Commercial landowners in New York who are “over parked” (i.e. have more spaces than they need) may be seeking to increase profitability by leasing out parking spaces. Large companies may be expanding their vehicle fleets during the pandemic to keep up with consumer demand and need satellite lots to store the vehicles. Once there is a meeting of the minds on the business terms including the license fee, term, and number of spaces, there are certain legal issues that should be addressed. As detailed herein, an experienced real estate attorney can draft the parking lease agreement to ensure that the parties’ rights and obligations are clearly and comprehensively spelled out.
Here are some examples of legal terms that should be addressed:
Insurance. The agreement should establish the licensee’s minimum insurance requirements and dictate that certificates of insurance must be delivered to the land owner. A waiver of subrogation clause may also be warranted.
Indemnity. The indemnification clause is critical to protect the land owner from any claims arising out of the parking agreement.
Default. The default clause should clearly articulate the circumstances under which the licensee would be in default, the time to cure, and the consequences for not doing so.
Landlord Remedies. Unlike an office lease, a parking lease may include the right to tow the vehicles if the licensee is in default beyond applicable cure periods or if the vehicles are abandoned.
Environmental. The agreement should address whether the vehicles may contain hazardous materials and if so, require the licensee to comply with all applicable laws and regulations pertaining to the transportation and storage of hazardous materials.
Maintenance and Security: The agreement should specify who is responsible for maintaining and securing the lot, and who is responsible for securing the licensee’s vehicles.
The foregoing list is not intended to be complete. Rather, it simply provides examples of issues that should be addressed in the commercial parking lease agreement. Every property is different and every lease is different. An experienced real estate attorney can ask the right questions to obtain enough information to clearly set forth the rights and obligations of the respective parties in the agreement.
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The Law Offices of Keith R. Betensky, Esq.
The Empire Building
26 Village Green, Suite 4
P.O. Box 22
Bedford, New York 10506-0022