When it comes to the rare and collectible car world, few things are more important than storage and upkeep. For those who seek out the most coveted vehicles, having a proper place to store them that is also reliable from an insurance and security perspective is paramount. For those who regularly buy and sell rare and collectible cars, being able to review storage options can offer some of the most lucrative opportunities in terms of freedom of movement for vehicles. Some enthusiasts will choose a very straightforward approach of purchasing a car and just putting it in storage. Others will use those vehicles as a “loss leader” while purchasing others at a lower cost. In either case, making sure that you have as few headaches as possible from a legal, maintenance, and bookkeeping standpoint is obviously to your benefit.
The reality is that many people who own rare and collectible cars for more than just collecting purposes will end up with them in a different way than they anticipated. Sometimes, a financial opportunity will strike their fancy and before they know it, their once prized vehicle becomes a profitable business endeavor. In other cases, life reasons will dictate that certain vehicles must go and the fastest way to do that is to dispose of them through the auction house. Regardless of the reason, sometimes the right choice is not readily apparent and choices from a storage standpoint must be made in short order.
In most cases, leasing space for the purposes of storage in Ontario is referred to as a “tenancy.” Most states refer to this as a lease agreement, which is a common term. Tenancies can fall under residential or commercial categories, depending on the type of lease you sign. For those leasing space within a residential area with the sole intention of using the property primarily for vehicle storage, the lease arrangement is very important. If a tenancy is a “residential” one, you may be subject to the same laws governing apartment leases, utilities and property taxes in Ontario as any other tenant. This could end up resulting in you paying higher taxes, utility bills or other costs than what a typical business would.
If you believe that your use of the property is going to have some degree of impact on the tenancy, you’ll want to ensure that you have the proper protections in place. Understanding tenant representation agreements in Ontario will vary by the type of space you are leasing. For example, a residential lease can function the same as a commercial lease if that’s how you choose to use the property. However, if you are in a large commercial space, the tenant representation agreement affects how the property is assessed. As a result, if you choose to try to run a business out of your garage, you may end up paying higher property tax and utility fees than you would if you just use the space for vehicle storage. Accordingly, know that you have options and choose the one that works best for you.
The rationale of a tenant representation agreement in Ontario is to set aside those considerations. Instead of deciding whether you want the property based on the location, you’re buying as many units as possible. You’ll then pick which of the spaces you want to use for your needs. This will allow you to get maximum use out of the property you selected, and can offer some advantages when it comes to negotiating the price of the space.
In addition, consider that your tenant representation agreement can also contain a clause that protects you from rate increases for a specified period of time. This is perhaps one of the most responsible things you can do when securing commercial space as a collector. If you’re keeping some very expensive vehicles on the property, knowing that your rent or other tenancy terms are locked in can be a huge advantage. It also helps you stay competitive when it comes to pricing, since you’re not doing it at the whims of the landlord or property manager.
As a rule of thumb, you should have the rights to every space you see within the property and be able to use it in any form or fashion you see fit. If this is important to you, it’s something you need to be upfront about in the agreement process. It doesn’t mean you can do anything you want, but it does mean that you can organize your collection of valuable assets with the peace of mind that you need.