What constitutes a shared parking agreement
A shared parking agreement is a contractual arrangement that allows two or more property owners to share their parking facilities as a means of mutually satisfying their zoning parking requirements.
Typically, the owners of the property enter into the agreement to satisfy the parking requirement imposed upon their property by local zoning code. More simply, the agreement allows private property owners to meet the needs of parking generated by their development without building additional spaces. This idea, however, is not limited to "surplus parking." For commercial shopping centers, retail, theaters, or other forms of mixed use properties, the hours when parking is needed to satisfy parking codes of the neighboring uses may be opposite each other. Thus, providing shared parking for such uses can reduce the overall parking requirement required as it allows for the availability of parking for the property around the clock. In such cases, a shared parking agreement may barely be distinguishable from an easement agreement.
The potential for shared parking is not limited to commercial properties. In fact, many residential developments rely on shared parking agreements that allow residents and non-residents of the property to park on the property. Such agreements are sometimes permitted by the zoning code; but may also be prohibited by the zoning code depending on the type of community and the relationship with the adjacent community. However, given the costs associated with parking, and additional costs associated with providing or maintaining parking that may be considered superfluous, shared parking agreements have become widely utilized to minimize such costs to the property owner and the surrounding community .
Definition
It is important to note that while shared parking is often considered a land use issue, it is actually a matter of contract. It relies on an agreement between neighboring property owners and not a land use regulation.
Legislative Purpose
More so a matter of contract than a land use issue, the legislative purpose is to satisfy the requirement of the zoning code and mutual benefit for the various property owners. Given that the terms of shared parking are a result of negotiation between the neighboring property owners, and that the area of the property being shared lawfully satisfies the requirements of the zoning code for each property owner utilizing the space, the legislative purpose, in many cases, is being achieved.
Legal Enforcement of Shared Parking Agreements
While the use of shared parking agreements is an issue of contract law, it may have far reaching implications on property owners, businesses, and municipalities alike, which can lead to competing legal opinion on the implications of such agreements. The contractual obligation, however, is a mutual issue between property owners, and, as such, should be enforced based on the basic tenets of contract law. In the event of a contractual violation will determine whether a shared parking issue is properly motivated by the need to satisfy a local zoning requirement or is the result of a "contractual dispute" between the property owners. While staying within the bounds of the area authorized under the shared parking agreement will determine whether the basic tenets of contract law are being satisfied, litigation of a poorly drafted or incomplete agreement may give a municipal land use appealing board an opportunity to review whether the resulting arrangement satisfies the legislative intent.
The advantages of a shared parking arrangement
Common Benefits of Shared Parking: A Guide for Property Owners
There are several common benefits to entering into a shared parking agreement. The most obvious is cost. Whether it’s common sense or contract law that dictates the manner in which parking is allocated, pooling resources is almost always less expensive for both parties than bearing the full cost of each vehicle space.
Nearby lot owners might be able to save money on infrastructure costs by sharing the use of existing lots. No new pavement has to be added in order to accommodate increased need, and therefore no cost is incurred. If one owner needs to perform maintenance on their lot, the sharing owner doesn’t need to invest any money on upkeep during the period that they would be facing added costs.
A shared parking agreement allows developers to use space to its maximum potential. For instance, an office building requires larger parking lots during business hours, but outside of those hours, it can share its parking with a more regulated retail business. The retail business will face its greatest need for parking during the evening, when the employees of the office building are off of the premises. Contractors who lease space in the office building don’t have the capacity to expand all at once, so the ability to use the parking lot of the retail space makes their lives easier and reduces the chance of a disorganized parking lot.
Shared parking agreements aren’t just good for some businesses: they’re good for development as a whole. A shopping district that invests in a series of shared parking lots will appeal to small businesses and their clients. Higher traffic means better visibility, which means more business.
Thoughts to consider
Legal considerations in the drafting of a Shared Parking Agreement largely surround observations as to the use of the property and obtaining the appropriate level of insurance to cover that use.
A parking lot usually requires a minimum amount of area dedicated to circulation, stacking and necessary ancillary structures such as curbing, landscaping or lighting. The above factors will either reduce the parking utilization of the area, as turning and maneuvering space is necessary, or cause a reduction in the useful area in a contractual or legal agreement for the purpose of rent calculation, as rental charges are commonly on a per space basis. For example, if a parking facility measures 100,000 square feet, it might have the capacity to accommodate 400 vehicles depending on the size of the parking spaces. However, if a parking facility is required to provide ingress and egress to a building on an adjacent site, there may be an argument that the parking facility is now required to make available a portion of the usable area to the neighbouring building to provide proper access.
Generally, with respect to the apportionment of insurance between users of a Shared Parking Lot, a shared parking agreement will set out the insurance required and set out the extent of coverage required from the point of view of liability arising as a result of activities upon, or the maintenance or operation of the parking lot. The agreement also sets out the items for which an owner will not be liable. An owner can usually limit its liability through the establishment of an express agreement of the parties. However, most states have adopted area and unitary doctrines of liability based on the principle of public or private invitation into a parking facility with the premise being that an owner can be held liable for all harms sustained, as a result of trespass or implied invitation to trespass, caused to persons or property in the exercise of reasonable care.
Negotiating a shared parking arrangement
Negotiating a shared parking agreement typically requires more time and energy than standard lease negotiations, given the complexities inherent in these arrangements. It is important that parties approach the negotiating process with clearly defined objectives and goals, knowing where they can make compromises and where they cannot.
To start, property owners and tenants need to understand the legal concept of a "mutual consideration" in a shared parking arrangement, which is at the heart of negotiations. Simply put, each party must be required, without benefit to them, to allow their parking area to be used by someone else for a specified term in exchange for something from the other party.
Statements describing an intent to share are not sufficient to establish a mutual consideration. Some examples of provisions that do not amount to express intentions to share parking include: "hours to be posted at entrances" and "terms of enforcement to be agreed upon during annual meetings." In these instances, the parties have expressed intentions to share, but no reciprocal terms have been articulated.
One way to address the mutual consideration issue is to base the exchange on the number of parking spaces. For instance, the deployment of a parking attendant could be a reduced service provided in lieu of paying parking taxes. Under this arrangement, the increased value of the parking tax reduction to the owner would be the motivation for his or her agreement to provide parking spaces, while the free use of parking spaces would be the incentive for the tenant’s contribution to the provision of the parking attendant. Another option is to utilize monetary consideration in the form of payments from one party to another for use of the other’s parking spaces.
Other considerations during the negotiation process include the duration of the agreement (how long are the users allowed to "borrow" spaces) and general use and maintenance of the area. For instance, are there any restrictions on who can use the spaces? Are the spaces limited to employees or are they also open to customers/clients?
It is also important to note potential liability issues that may arise. For example, how will a party be liable for damage to the space of another? Also, what happens if an individual is injured on the premises?
Samples and examples
Consider an upscale condominium development that competes with several of its neighboring locations in the heart of a major metropolitan downtown area. This condominium has only a small area reserved for tandem or double-parking spaces; otherwise parking is located in a five-story subterranean parking garage available to unit owners on a first come, first served basis. One of the condo’s neighbors is a party hall located a few minutes from the condominium and within easy walking distance. The condo determines to enter into a parking space lease agreement with the party hall whereby the party hall’s guests may use one of the condo’s empty parking spaces, but they must vacate the space by the start of the condo’s evening social events. In exchange for their participation, unit owners receive a reduction in their assessments .
The owners of a restaurant and a sports bar in a retail center also decide to implement a shared parking arrangement with another restaurant in the neighborhood. In addition to being located within a four-minute walking distance of the other three businesses, this other restaurant has a large outdoor patio area. The four businesses agree that each will reserve two spaces in their respective parking lots for the other three to use as needed. They also agree, however, that a restaurant with a dining room will not be able to use one of the sports bar’s spaces if the sports bar is extremely busy, such as during televised sporting events. An exception to this agreement will occur during lunch hours.
Shared parking arrangements can be particularly beneficial and useful for highly developed areas where parking is at a premium, and for municipalities where venues for recreational activities and commuting are within minutes of employment centers.
Common issues and considerations
Common challenges arise when parties attempt to implement this approach. For instance, resolving issues related to potential land use violations can be a time-consuming process that may not work for the parties in the short-term when they want to be able to act quickly. There are often concerns about liability exposure; if one party has an aggressive interpretation of liability, it could create major problems for others involved. Changes in demographics may also impact the structure of a shared parking agreement, as nearby developments and population trends can increase the demand for parking. Confusion about space availability resulting from different schedules for tenants of limited service businesses (e.g., restaurants) and full service businesses could lead to parking overloading. The extent of enforcement can also be uneven and arbitrary; perhaps some group is reluctant to let other groups manage their lots.
While these potential pitfalls are important issues to consider, there are several strategies for addressing them. It is also critical that a written shared parking agreement documents everything about how the use of the land is to be shared; this will include things like payments, liability, and insurance for the parties to address their respective concerns. Next, it is important to determine the maximum number of spaces that are to be used on any given day, which can limit further liability concerns. Parties should also take turns watching some of the spaces during the times when the risks of overcrowding may be the highest, which can help significantly with potential liability. Another solution to the liability issue could be to have fully independent parties provide insurance. Finally, it may make sense to set up a formal process for any disputes; allowing involved parties the opportunity to raise concerns early on, before they escalate too much, could save the agreement from falling apart.
Future opportunities with regard to shared parking
As the concept of shared parking gains traction, it will likely see increased endorsement and integration into land use policies. For example, transportation impact fees that impose charges on developers to finance new streets and other infrastructure improvements could be recalibrated to discount for parking demand reductions projected from the shared parking program. Likewise, developers may find some relief from expensive parking requirements if they have an approved shared parking agreement in place.
Technology is likely to play a growing role in the evolution of shared parking arrangements and management of parking spaces as a limited commodity . New products are emerging that warehouse essential data and facilitate connection among owners of underutilized spaces and those seeking affordable parking for multiple uses in proximity to where they are doing business.
Surveillance and parking management technologies can complement shared-parking operations and increase opportunities for wayfinding to available spaces that fit the needs of drivers. Like so many other products, parking technologies will continue to evolve to benefit owners on both sides of the transaction.