If you own a car in a busy city, you probably find car parking spaces hard to come by, and expensive.
A common solution to this problem is to make a private arrangement with another party to secure a permanent car parking space in return for a weekly or monthly licence fee.
Alternatively, you may live in a building with a central car space that you don’t need. So instead of letting it go to waste you can license the space to another person to generate some extra cash. If you live in a strata building make sure you check with the strata manager first as it may affect insurance arrangements.
It doesn’t really matter whether you are a commercial car parking enterprise, or a private owner, you should document your arrangement in a Car Park Space Licence Agreement so that each party knows where they stand. A written agreement ensures that both the owner of the space, and the user, have adequate legal protection in place, and are clear on what their obligations and rights are from the very beginning.
Your licence agreement should cover things like:-
- who can use the car space;
- the weekly, fortnightly or monthly licence fee payable;
- whether an upfront security deposit is payable to cover any damage or loss of swipe card etc;
- how long the arrangement will be for;
- can a party end the arrangement early or will there be penalties or loss of deposit;
- maintenance obligations and cleanliness standards;
- allocation of risk and limitation of liability for any damage, theft or loss occasioned while the car is parked in the car space;
- other related matters.
Whichever angle you are approaching the transaction from, make sure that you are comfortable with the terms and conditions of the licence before signing it, or try negotiating changes if there is something that you are unhappy with. Particularly, be aware of the total costs involved, and any extra costs you might be liable for if you need to break the arrangement early.