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Negotiating Parking Privileges in Commercial Leases: What Every Tenant Should Know

By Stacy E. Smith

Parking privileges are often essential to the businesses of commercial tenants. Given this proposition, it is surprising that many commercial tenants and their legal counsel often overlook important parking issues in favor of what may appear to be more pressing legal and economic issues in the lease negotiation process. This is unfortunate, as inadequate or ambiguous parking provisions can: 1) lead to costly legal battles, 2) harm a tenant's business, and 3) cause the deterioration of the landlord-tenant relationship.

Commercial tenants and their legal counsel should incorporate in the lease specific terms concerning the amount, location, maintenance, availability, cost and use of parking spaces to be provided as part of the leasing of the demised premises or common area. Some landlords outsource the operation of their parking facility to a third-party operator. In these situations, the detailed terms of the parking arrangements are often contained in a separate agreement between the tenant and the operator. While that is acceptable, the lease must still contain a provision obligating the landlord to make the parking available on the terms described in the parking agreement in the event the agreement with the third-party operator terminates. No matter whether the specific parking terms are contained in the body of the lease, the special stipulations of the lease, or a separate parking agreement, however, the savvy commercial tenant should be cognizant of the potential pitfalls inherent in poorly drafted parking provisions.

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