Require Tenant to Pay for All of Its Parking Spaces, Even Unused Ones

You may agree to give a tenant the right to use a set number of parking spaces at your building or center in return for a parking fee. But if your lease is like many we've seen, it may have a loophole that could result in a tenant paying you far less in parking fees than you expected. Here's the loophole: The lease doesn't address whether a tenant must pay for all of its parking spaces when it isn't using all of them. Since parking fees typically aren't part of the tenant's minimum rent, the tenant may argue'—and a court may agree'—that the tenant must pay only for the parking spaces that it's actually using, unless the lease says otherwise. That could be a big problem for you if you depend on the income generated from the parking fees to help pay your bills.

What to Say in Lease

To plug this loophole, say in the lease that the tenant must pay you the full parking fee in return for the right to park in “up to” a set number of spaces, says New Jersey attorney Marc L. Ripp. Then, whether the tenant parks in none of the spaces, all of the spaces, or any number in between, it must pay the full parking fee, he explains.

It's also a good idea to say in the lease that the tenant is getting only a revocable license to use the parking spaces, Ripp says. This way, you can cancel the tenant's use of the parking spaces on quick notice. You should also categorize the parking fee as “additional rent.” If the tenant later fails to pay the fee, that categorization will allow you to treat the failure as a nonpayment of rent, triggering a lease violation.

Add the following language to your lease:

Model Lease Language

Tenant shall pay Landlord, as Additional Rent, on the first day of each and every month during the entire term of this Lease, an amount equal to $[insert amt.] as consideration for a revocable license to park in up to [insert #] spaces, the locations of which are shown on Exhibit [insert #, e.g., 10] attached hereto.

Insider Source

Marc L. Ripp, Esq.: Sr. Assoc. General Counsel, Mack-Cali Realty Corp., Mack-Cali Center II, 650 From Rd., Ste. 220, Paramus, NJ 07652-3517; (201) 967-0324; mripp@mack-cali.com.