For companies with regular commuters or visitors, adequate tenant parking is an essential part of business operations. Before your existing commercial lease expires or before you enter into a new agreement, take the time to understand your parking rights and obligations outlined in the parking provision of your commercial lease agreement.
A tenant parking provision outlines the area in which you as a tenant are allowed to park, and it explains who is responsible (the tenant or landlord) for parking space disputes and maintenance. Typical parking provisions fall under one of two categories: reserved or unreserved.
The Difference Between Reserved and Unreserved Tenant Parking
Reserved parking, also called demised parking, means that the commercial lease clearly outlines the number, and sometimes location, of tenant parking spaces.
For office building tenants, the number of spaces typically provided is calculated by dividing the total number of parking spaces by the tenant’s lease space —usually resulting in about three to six spaces per 1,000 square feet. This number will change depending on whether you’re looking at downtown versus suburban markets, as well as market to market. It’s also important to note that reserved parking is only applicable when the landlord controls tenant parking spaces.
Unreserved parking, also referred to as general rights to park, means that tenants can park anywhere within the building’s car parking area on a first-come, first-served basis. Offices located in the suburbs, as well as large manufacturing warehouses, can expect to have unreserved parking, with a few spaces reserved for executive positions.
Before signing your commercial lease, look for the parking provision and ask the following questions for further clarification.
8 Questions to Ask About Tenant Parking Before Signing Your Commercial Lease
There are a variety of components that your landlord could and should include in the parking provision of your commercial lease. Before signing or renewing your lease, consider asking the following questions:
- Which spaces am I allowed to park in? Determine whether your allotted tenant parking space(s) are located on-site or along surrounding streets. Also, identify if they’re located in a covered garage or outdoor surface parking lot.
- Does the landlord of the building own and operate the parking lot or garage? Oftentimes, landlords don’t own the parking area that is provided to tenants, but rather, work simultaneously with third-party parking garage management teams. If this is the case, the landlord will not have the authority to add or adjust parking spaces for their tenants once a contract is signed. Be sure to understand this relationship before entering your commercial lease agreement.
- How can I prevent other people from parking in my spaces? If you have reserved parking, make sure to ask how these spots are marked (e.g. signs, parking passes, tickets), and who is responsible for handling disputes in the event that another tenant or visitor parks in your reserved spot.
- How much will tenant parking cost? While the actual cost of parking varies based on location and the number of spaces, you can expect to pay additional parking costs, especially for reserved tenant parking spaces. Consider asking your landlord about the factors impacting this fee. Is there security? Continued maintenance of the space? Is parking within close proximity of your building?
- Is the tenant parking area well-lit? Well-lit parking areas can impact your safety, the safety of your employees, and the safety of your vehicle.
- Who handles the general repair of the parking space? Tenant parking space repairs and scheduled garage maintenance are typically the responsibility of the landlord or parking owner, with these costs included in a parking fee or prorated and charged as part of common area maintenance, but it’s still a good idea to ask to be sure and understand.
- Where can my guests park? Before customers, vendors, or other important stakeholders arrive at your company for a meeting, know where they can park. If your building accommodates visitor parking, do you have to reserve it in advance? Will your guests have to pay to park?
- Can I sublet my parking space? Although not as common, you may find yourself with more parking spaces than you need, creating an opportunity for a little extra revenue. Beforehand, check with your landlord and reference your commercial lease to see if you have the legal right to sublet.
Knowing and understanding the tenant parking provision of your commercial lease will prevent frustration in the future. Ensure that you and your landlord are on the same page when it comes to tenant parking terms before entering or renewing your lease.
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Editor’s note: This post was originally published in 2021, and has been updated and republished.
