Understanding the Types of Rentals

Steve Petty
Written by Steve Petty

People pay money to attend events in your building.  This helps to pay for the building.  The most obvious way this happens is that your congregation’s members and friends give money in the plate and with annual contributions.  When outside groups ask to rent part or all of our facility, we may ask them to pay for that privilege.

In the next two articles we will examine how we understand the two critical aspects of renting: the different types of rental agreements and the actual costs of renting the facility.  These do not include groups that you sponsor and community one-time groups that you may decide to allow to use the facilities for free.

1.  One-time small event rentals

When a group comes to you and asks to rent a classroom for a day or perhaps two, they will want the classroom, parking, access to rest rooms, electricity, and the ability to put up signs directing people.  They will want the room heated or cooled (HVAC).  They may want access ahead of time to set up for their event.  They may want a room key.  They will be there a specific amount of time and they will leave.  If they have a positive experience in your space, they may want to come back later on.

Many churches discourage such uses.  It is troublesome to do a whole lot of paperwork for just one group and one event – it may be more trouble that it is worth.

I have always tried to accommodate as many of these uses as I can.  I even encourage them.  It seems to me the church gets a tax break from the county, so our buildings can be a benefit to the people in that region by being available to the community to use.

However, just because the group is small and it’s only one time in one room, the group still has to meet the non-profit standard and has to pay for the room.  I will not ask my church members to subsidize other groups.

 

2. Annual Contract Rentals

Some groups will want to rent a room on a regular basis — weekly or monthly — for some special purpose.  One example: The local Homeowners Association meets monthly ten times a year.  They need a flexible space for their meetings, five board members and from one to fifty attendees.  They want an annual contract for your largest classroom.  Besides all the things for the one-time rentals listed above (parking, restrooms, lights, HVAC, etc.), they may also want your custodian to set up the tables and chairs so that when they arrive, the room is ready for them.  Keep in mind, if the room gets set up, the custodian will also need to take the tables and chairs down before the next user group.

Groups like this are a great source of income.  I encourage churches to get signed annual contracts.  When a group first contacts you, it is wise to only rent to the group for three months.  This gives you time to figure out if they are going to be benevolent or difficult renters.  During those 90 days, you will have time to work out any differences and decide whether you want to continue the relationship.  After the initial three-month contact, it might be wise to sign a new contract through the end of your financial year, usually December 31, and create new annual contracts in the fall which will begin on January 1 and run through the year.

If you set up your annual groups to all terminate on a common date, like December 31, your trustees can look at the current costs of operating the church and allocate new room fees across the board in the early fall — September and October.  On November 1 you can send out letters to your annual users with a letter of thanks for the positive relationship you enjoy, an explanation of the new costs in the contract, and a copy of the new contract for the coming year with a deadline to return it by November 30.  When all the contracts come in, your trustees can inform the finance committee of the income it expects to derive from annual building rentals.

3. Large Event Rentals

If you are fortunate enough to have a large social hall, you may have occasion to host large events.  These might include a dinner for a social club, a dance for the high school class, a family reunion, a retirement party, a square dance club, an art show, etc.

These are large fun events that will introduce your building to hundreds of people.  However, they can be a significant pain to put on and they can be a serious strain on the buildings.  You may want to include at least one staff person or two in the cost of the rental.  I usually offer the work to the custodian at double-time pay to be present to repair things that break, clean up any emergency messes, make sure the building is cleaned when the group leaves and turn off all the ovens, lights and secure the doors.  For a really large group, I often include a Host or Hostess, to oversee the event, as well as the custodian.

If the kitchen is to be used for a reception, there might be one cost, and there might be another cost if a meal is to be served so the ovens are turned on.

Contracts for all groups need to include your rules for alcohol and tobacco use or restriction.  This is especially true for receptions.  If you do not allow alcohol on the church premise, that needs to be spelled out in BOLD in the large event contract, with a penalty if alcohol is brought onto the campus.

4.  Wedding and Memorial Rentals

There are two types of weddings and memorials: members and non-members.  You would be wise to have two price lists and two different contracts for these events.  Furthermore, for these services, there are two schedules for each policy: building related charges and staff related charges.

Member Events

Church members pay for their building use with their annual contributions.  Therefore, it is improper to ask them to pay a use fee for the buildings, or for the pastor to accept gratuities or ask for honorariums for clergy services at member events.  Note, I only said “clergy” services.  The church pays the salary for the pastor 24/7.  However, the church does not pay the organist or the custodian to work 24/7.

Wedding and memorial fees related to the building uses and any clergy related fees, should not apply to members.  All other costs: custodian, hostesses, organist, sound and/or video technician, should be negotiated with your staff annually as they relate to member and non-member events, and those costs should be listed on the building rental cost list.  In small town churches and small suburban churches, usually where these staff are also members of the church, the staff may offer to volunteer their services for members who require them.  In larger churches and urban churches, where staff might not be members of the local church, or where the staff is not integrally involved in the congregation’s life, these staff members may prefer to be paid or request to not work these special events and that is their right.

Non-Member Events

Churches are less popular than just ten years ago for non-member events like weddings, funerals and memorial services.  Today, most weddings take place at the court house or a park or nice backyard.  Funerals and memorial services are most often conducted at the funeral chapel or at the graveside.  (Just twenty years ago I did fifty-five weddings in one year.  In 2014-15 I did zero.  Over the last five years, I probably averaged two a year.)

(Note: In Southern California recent surveys indicated that the most popular place to be married is Las Vegas.  I’m not sure whether that indicates that the survey takers are geographically challenged, or they see marriage as a gamble.)

Most non-member weddings are people who have some religious affiliation in their background, but who – for whatever reason – cannot get married in the church of their choice.

Non-member weddings and memorials have definite costs associated with them.  The church should have a wedding policy:  If you do several such events a year, you should have a wedding hostess who handles all the details between the couple and the church.  Clergy may be asked to marry these couples who have no relationship to the church.  In this case, it is appropriate to tell them right up front that counseling is a prerequisite to marriage and there is a clergy fee for all services rendered by the pastor.  Clergy may be asked to officiate at funerals and memorials for non-members as well.  On top of the building fees, there should be a standard honorarium established for such clergy services.

Staff salaries:  The organist is probably salaried, with a definite time commitment in the contract, services such as these will add considerably to the time expectation of an organist and should be charged accordingly.  The custodian is probably hourly and subject to all Federal Labor Standards Acts rules as well as any state rules.  If your custodian works 40 hours a week, and you expect them to work on Saturday as well, then the custodian is entitled to at least time and a half for overtime.

Each different type of rental requires a different understanding of the costs related to the rental and should have a list of expected fees related to them.

Articles in this series:

  1. Who can you rent to?
  2. Understanding the types of rentals
  3. Understanding the actual costs of renting.
  4. Creating a policy for community groups and events.
  5. Creating a policy for sacred events.
  6. Creating a contract that protects everyone.