Looking for other sources of income?
Question:
I am looking for other sources of income besides rent from my14-unit apartment building and am considering charging for parking space, both covered and uncovered. Is there anything I need to worry about in doing this? Can I force tenants to pay for spaces even though they are willing to park on the street?
Answer
There are a number of issues that must be considered regarding what you wish to do.
First, as you probably almost certainly know, you cannot change the terms of a lease agreement during the lease period without the tenant agreeing to do so. Therefore, you can only amend the lease to provide for paid parking upon renewal or extension of the agreement unless the tenant allows a mid-term change, possibly because you offer some kind of financial incentive.
Second, you should probably require tenants to keep the same parking spaces as they currently use for free in order to avoid additional complications.
Third, you will probably not want to allocate additional spaces to one tenant who is willing to spend more on parking because another tenant wants fewer spaces than he would be allocated, whether because he doesn’t need them or prefers to not pay for them (perhaps parking on the street). Doing so may create problems when the tenant with few or no spaces leaves and you have no spaces available for the replacement tenant, possibly making it difficult, maybe impossible to re-lease the vacant unit in the rental market existing at that future time.
Finally, you obviously cannot charge for the space they use when parking on the street if you don’t you own the street. Similarly, you can’t prohibit street parking; only the city can do so. You can probably legally require tenants who are willing to park elsewhere to pay for spaces that they don’t wish to use. However, you would need to disclose this fact to future applicants and I’m certain this will reduce your pool of qualified tenants, as those who are willing to park on the street will consider they are actually being asked to pay a higher rent. If you want to require all tenants to pay for parking, then you should raise everyone’s rent as the law allows
without calling the increase a parking fee.