Parking Agreement Could Be Canceled After Property Use Changed

An office building owner and a commercial center owner signed a parking agreement in which they granted each other the use of their respective parking lots. The commercial center owner sold its property to a high school, which then notified the office building owner that it was canceling the agreement because of the change in the property's use. So the office building owner sued the school, asking a court to force it to honor the agreement.

A California appeals court ruled that the school could cancel the parking agreement because of the change in the property's use. The court noted that the office building owner and commercial center owner had signed the agreement so that the commercial center would have enough parking to comply with the city's parking requirements. And now that the property was being used for a school, additional parking was no longer needed to comply with the city's parking requirements. So although the agreement didn't explicitly give either party a cancellation right, it was reasonable to allow the school to do so, since the reason for the agreement was now moot, the court reasoned [Magnuson v. Escondido Charter H.S. Dist.].