Parking Area Maintenance
Provisions governing maintenance, repair, and replacement costs for parking structures and surface lots, including allocation between tenants and treatment of capital repairs.
Model Lease Language Variations
“Operating Expenses shall include all costs of operating, maintaining, repairing, and resurfacing the Parking Facility, including without limitation striping, lighting, signage, security, cleaning, snow removal, structural repairs, and the annual amortization of capital improvements to the Parking Facility over their useful life.”
Comprehensive inclusion of all parking costs including structural repairs and capital amortization. No distinction between surface lot and structured parking. No cap on capital amortization.
“Operating Expenses shall include costs of maintaining the Parking Facility, including routine maintenance, cleaning, lighting, striping, and snow removal. Structural repairs and resurfacing shall be treated as Capital Expenditures and amortized per Section X. If the Parking Facility generates net revenue from paid parking, such revenue shall offset parking Operating Expenses before allocation to tenants.”
Routine maintenance included; structural and resurfacing capital items amortized. Parking revenue offsets costs. Balanced allocation.
“Tenant's parking rights are included in Base Rent. Parking Facility maintenance costs shall not be included in Operating Expenses. If Landlord generates revenue from the Parking Facility (monthly permits, hourly rates, or event parking), such revenue shall be credited against Operating Expenses.”
Parking maintenance in base rent. Revenue credit to operating expenses. Tenant has no exposure to parking cost increases.
Calculation Methodology
1. Compile all Parking Facility expenses: maintenance, cleaning, security, lighting, snow removal, repairs. 2. Classify major items as operating or capital per lease terms. 3. For capital items, apply amortization schedule per lease. 4. If parking generates revenue, net revenue against gross parking expenses. 5. Allocate net parking costs to tenants per their proportionate share (or per parking space allocation if lease specifies).
Common Drafting Errors
Not distinguishing between surface lot and structured parking costs — structural maintenance for garages is 5-10x more expensive than surface lot maintenance
Failing to address parking revenue offset — landlord profits from paid parking while passing all maintenance costs to tenants
Not specifying whether parking space allocation affects pro rata share — a tenant with no parking spaces may still pay for parking maintenance
Omitting treatment of parking structure capital reserves — deferred maintenance on parking garages can create large one-time charges
Relevant Case Law
Landlord passed through $3.2M parking garage structural repair as an operating expense. Court held it was a capital expenditure subject to the lease's amortization requirement. Tenant's annual share reduced from $180K to $28K.
Billing System Implications (Yardi / MRI)
In Yardi, parking costs can be allocated through the operating expense recovery pool or through a separate parking-specific pool. Common error: including parking revenue as a GL credit in the operating expense pool without matching it to parking expenses, which reduces total CAM for all tenants even if parking costs are a separate charge. In MRI, maintain separate allocation groups for parking expenses if the lease treats parking differently from other operating expenses.
CapVeri Analysis
Parking maintenance is an increasingly significant expense, particularly for structured parking which can cost $150-300/space annually for routine maintenance plus $3,000-5,000/space for major capital repairs amortized over time. CapVeri flags parking expenses that are inconsistent with the property's parking type (surface vs. structured) and benchmarks.
Related Resources
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