We may be used to seeing Adventist churches rent buildings or rooms from other denominational churches for worship services and events. It seems less common for us to rent our premises to other groups, whatever the organisation: another denominational church, a local charity, or a private function.
Allowing different groups to use our facilities is an opportunity for a church to interact with the community and provide for their needs. An example would be a church that has an agreement with the local health service so they can use their premises for diabetes checks or mental health support.In doing so, the Seventh-day Adventist Church not only becomes known by the different services and charities, but also by all the individuals attending the provided services. This will create opportunities to be relevant and serve the community as part of the church’s mission.
As appealing as it may be, you need to take some consideration before deciding to rent your church facilities to outside groups or other church denominations.
Can the church make a rental agreement?
With the approval of your conference or union, churches should be legally allowed to rent their rooms. However, check with the conference legal counsel to make sure you are not giving rights to the tenants that they should not have.“The Agreement cannot be, or appear to be, a commercial agreement. Churches engaging in commercial ventures can jeopardize tax exempt status and subject the church to public accommodation laws. These laws may interfere with the church’s ability to limit certain practices and behavior when others use the church facility."1
Who to rent to?
Take into consideration to whom you want to rent your premises. Would you rent to members for their private functions, such as birthdays and anniversaries, or to other churches and non-profit organisations?Carefully consider what type of business or functions would take place in your church. Whatever happens on your premises contributes to the image that the community will have of your local church or even our denomination. Your church’s reputation is at stake.
What type of agreement?
Bob Burrow, in his article “What is a Facility Use Agreement and Why Would We Want to Use One?,” writes: “How do you communicate and get those who wish to use your facilities to understand and agree to your conditions and limitations? A rental agreement or lease is one option, but it may not be the best choice. A lease creates a tenancy which, under most state and provincial laws, is an exclusive interest in the land which passes to the tenant. Under such an arrangement, a landlord will have a difficult time imposing restrictions on the use of the facility."1Therefore, the alternative could be to create a Facilities Use Agreement.
The Facility Use Agreement is a contract between two parties that allows them to use your premises for a period of time, usually for a fee. For example, this would be appropriate for a church plant programme, weddings, anniversaries, birthdays, etc.
What is included?
You may rent your space with seating, audio-visual system, or any other equipment and furniture included. In some instances, you may decide to rent a room and charge a separate rental fee for any furniture needed.There is no right or wrong way; it all depends on the circumstances. However, it is very important to have it specified in the agreement.
Whose liability is it?
If the building or any furniture gets damaged, who would be responsible for the repairs or replacement? Would the church be liable if someone gets injured while attending one of the tenants’ events?When renting a space, the church continues to have a duty of care regarding the physical space. The room needs to be in good maintenance condition, with fire exits in conformity with the local authorities’ regulations, handrails well secured, etc.
Should any injury or damage happen because of the church’s negligence, the ARM General Liability insurance would respond.
However, the tenants/users should also be responsible for their actions if they cause harm or damage to a third party or to the church’s property. Therefore, it is crucial that they have their own Public Liability insurance, which would cover any accidents, injury, or damage caused by their negligence.
The Public Liability should have sufficient insurance coverage. Typically, $1 million is sufficient, but more and more entities are asking for a $5 million coverage.
Who can help?
Adventist Risk Management©, Inc. (ARM) is here to support your ministry, providing resources and information as you move forward with creative ways to serve your community.On the following link, you can find a template of an agreement, which can be adapted to the specific needs and situation of your local church. However, always consult with a legal counsel to make sure you follow the laws and regulations of the local authorities in your country and are not jeopardising the activities or reputation of the Adventist Church.
