Landlords and business tenants are again being warned there are instances in which parking spaces can be classed as business premises.
Birmingham solicitors Williamson & Soden are highlighting the matter after the Court of Appeal was asked to consider whether the use of parking spaces by a tenant could constitute "occupation for the purposes of a business".
Associate partner and commercial property specialist Louisa Jakeman said: "This is important, since a tenant in business occupation can renew a lease under the Landlord and Tenant Act 1954, while a landlord can only oppose a renewal under specified statutory grounds. The Court of Appeal ruled that if a tenant is using the parking as incidental to a business then use of parking spaces is considered business occupation, even though that use may be limited to particular times of the day."
A landlord who wants to avoid the problem of a protected business tenant should either grant a licence agreement for parking spaces, which triggers a need for VAT on the parking fees, or to contract the lease outside the 1954 Act.