Perhaps you are looking for another source of income or perhaps someone just approached you asking if they could rent or use your church facility. Renting out your space would potentially bring you additional income; allowing an organization to use your facility would be community minded. But before you sign any agreements or come to a hand-shake agreement, you need to be fully aware of the risks.
Who Do You Want To Be?
This might seem like an odd question but if you do not follow the proper procedures – you are who uses your building. If a school uses your building but you don’t have the right agreements in place, you are now a church and a school. If you allow another church to use your building, you are now responsible for two congregations; one of which you have little to no control over. Get the point?
Ultimately lawsuits might be an issue so it’s essential that you protect your church and here’s how.
Don’t Shortcut The Insurance Requirement: Make sure your tenants or anyone that uses your building has insurance coverage limits that are equal to or higher you’re your own church’s insurance coverage AND name your church as an additional insured on their policy. Way too often we see the other organizations only provide a copy of their policy or simple proof of insurance but please understand – this will not protect your church as it should and without that organization naming you as an additional insured, you are essentially co-insurers with the other organization and that’s an exposure that unnecessarily exposes your church to legal risks.
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Secure proof (typical is via a Certificate of Insurance) that your church has been named as an additional insured and share that with your own agent for review.
Set Ground Rules (Facility Use Agreement): Saying “yes” or “no” to use requests is much easier when you have streamlined guidelines in place — guidelines influenced by legal and financial advisors. Create a go-to Facility Use Agreement (also essential that you have a written agreement/contract in place – that might also be a trigger for their insurance to respond) that includes, but is not limited to, the following factors:
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Will you allow members of the public or outside organizations to rent your facility, or limit it to church or ministry uses? Note that opening your facility to the public can have potential tax and/or legal liability implications.
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Which rooms in your church (the sanctuary, fellowship hall, classrooms, kitchen and nursery, for instance) are open to users, and which aren’t?
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What will you charge for rental fees and related expenses? Will church members pay less than nonmembers?
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Who is responsible for setup and cleanup?
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Will you allow sales during events?
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Do church members get priority if two groups want the space at the same time?
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Must someone from the church be present when an outside group uses the facility?
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Must childcare providers be selected and screened by your church?
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How will damage, injury or theft be handled?
DON’T ignore facility maintenance. As the “lessor” of space, you have an obligation to provide a safe facility. Limit risk by keeping your facility in tip-top shape inside and out. Remove tripping hazards, secure valuables, and mark and clear slippery surfaces. It’s a good idea to conduct pre- and post-event building walkthroughs and assessments. Prevention is the best remedy against a lawsuit.
At the end of the day, you need to weigh the risks against the rewards to determine whether you should rent or allow others to use your church facilities. As the old saying goes, it’s always better to be safe than sorry and sometimes it just makes sense to say no to use requests.
Upon request, we are pleased to provide a sample Facility Use Agreement so please contact us and we’ll be happy to email a copy to you with no further obligation. As with all legally binding contracts, it is important to review any sample agreement with an experienced attorney.
