I’m thinking of renting out my driveway- what should I bear in mind?
With parking space at a premium in many towns and cities and parking permits costing often in excess of £100 per week, homeowners are renting out their driveways and parking spaces to earn extra income. What should you be aware of if you decide to do this?
Understand that you are granting rights to use your property
By authorising someone to park on your driveway or parking space you are granting that person a personal right to use the space, otherwise known as a licence. It is important that you do not inadvertently create a tenancy as it is then much more difficult to bring the arrangement to an end.
Check your mortgage
Some mortgage providers require their permission before you rent out a parking space or driveway. Check the terms of your mortgage and if you have any doubt, check with your mortgage company before you do anything. Likewise if you are a tenant, check the terms of your tenancy and if you are in any doubt, check directly with your landlord before you begin to rent your driveway or parking space.
Make sure you have a written contract
While this sounds obvious, a clear and well written document can avoid potential disputes. In the contract you may wish to specify:
- the space being rented;
- the times during which the space can be used (do you want someone being able to park there at the weekend or just during the working week?);
- that only vehicles make be stored on the space(not caravans, boats etc);
- that the licensee (the person using the space) agrees not to block any other driveways or parking spaces; and
- that you take no responsibility for loss or damage to property left on the parking space or driveway.
You may also wish to set out the notice periods for either party to terminate the agreement; for example one or two weeks.
Check your buildings insurance
Some (not all) household policies class the granting of a licence as a commercial contract which may invalidate the policy. Before renting out your driveway or parking space you should check with your insurer to ensure that doing so would not invalidate your policy.
Your earnings may be taxable
From April 2017 homeowners are able to earn up to £1,000 per year tax free from their property. Even so, you should inform HMRC of your intention so that they can apply any tax which may be payable.
If you have any queries about renting out a parking space or your driveway, please contact HMG Law LLP on either 01869 252244 (Bicester office) or 01865 244661 (Oxford office).