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Essential Components Of A Building Use Agreement For Churches

Essential Components of a Building Use Agreement for Churches

The greatest gift ever given is outlined in John 3:16.  God gave His only son so that we might have eternal life, and not only do we now have the ability to fellowship with the Lord, but we can also have life and live life more abundantly! What a blessing and privilege it is to be the Body of Christ. We know that ” the church” is really composed of the people who make it up, not the facilities that we meet in. However, God has given us the buildings and grounds to help aid in His ministry and also to utilize in our outreach to the community at large. And as stewards of this gift, we have responsibilities for overseeing how the facilities are used.

Our meetings with churches regarding insurance matters have identified  building usage and/or the lack of established procedures thereof as one of the larger legal risks the organizations face. Building usage procedures are among the most important to implement, as  they specify who can use the church facilities and for what purpose.  Churches also have to be mindful of tax considerations that can be associated with outside building usage as well as additional liability exposure.

We recommend that you develop a “Building or Facility Use Agreement”.  This is important because it outlines the terms and conditions and is the first line of protection for the church against claims of discrimination, medical payments, and other tort-related liability.

Outlined below are some essential components of the Building Use Agreement: 

Set Expectations:

  • What areas of the facilities or actual building would be utilized
  • Define the type of activity
  • Agreed upon dates and times for the activity/event
  • Set-up and clean-up responsibilities
  • Childcare arrangements
  • Any costs involved

Costs/Fee Schedule:  A fee schedule should be established, which should reflect the fair rental value of the facilities and address related expenses, such as custodian or childcare expenses.  Be sure to consult your CPA or legal council regarding what guidelines to follow when fees are waived.  Example:  For 501C3 entities, if the activity is in line with the mission of the church, sometimes fees can be waived.

Statement of Purpose – Who Will Be Allowed To Use The Facility:  This is where it is stated that the facility usage has to be consistent with the mission and/or beliefs of the church.

**VERY IMPORTANT: Be sure to consult your attorney. If you wish to restrict facility usage to only activities consistent with your organization’s religious beliefs, you will need to say so here and to show how it is connected to your Statement of Faith. After the same sex marriage ruling, this has become increasingly important to many churches who do not wish to rent facilities out to same-sex couples for their ceremonies and receptions.

Hold Harmless/Release Language: Have your attorney draw up your hold-harmless language releasing the church from liability for the event/activities,etc.

Insurance: 

  • Is the organization insured?
  • If Yes (important), then complete the following recommended insurance addendum which requires the church to be named as an additional insured:

(ABC Organization) will name (ABC Church) as an additional insured on their General Liability policy. This insurance shall remain in full force and effect for the duration of the building usage and shall be evidenced by a Certificate of Insurance.

What about those non-profit organizations that are not insured? This is the question proposed every time we visit a church regarding building usage. Take into consideration the activities that are being held and their frequency of usage. For example: if a community “quilting club” is utilizing the facilities every few weeks and it is only adults who are quilting and doing no other activities, this would not rank high on the risk meter. However, if a community soccer team wants to utilize the church’s fields, you have the two large triggers on the risk meter, those being athletic activities and youth activities! Risk increases with youth activities and athletic activities. When reviewing building usage requests like this, it is important to remember that these rank high on the risk meter and it is recommended that those organization be required to be insured.

If uninsured groups want to utilize the church’s facilities, the church has several options: 

  • Do not allow the activities to any uninsured groups.
  • Allow the activities if the risk is low ( as explained above with the “quilting club” example
  • Roll the dice. Not recommended! If an injury results, the church could wind up being named in the lawsuit.
  • Adopt the activity as a program of the church.  NOTE: At times churches decide to bring programs under their own covering and extend them to the community as a ministry of the church – but just be sure it is truly a ministry of the church. Be sure to do all of the due diligence in screening practices and to risk-manage it just as though it is your own ministry, because now it is!

When we step back and look at the big picture, we are reminded that the overall purpose of attending to the operational details of the facilities that our Lord has entrusted to us is to use them to achieve His work and for His glory. Faithful stewardship of church facilities must include attention to how these facilities are used, and must include following legal guidelines for the protection not only of the church, but also of all who make sure of the facilities.

 

 

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