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Church Rental Guidance

Here is guidance on church rentals from the Georgia-Cumberland Conference, Ministers Manual, Ministry Magazine, and the White Estate.

 

CONFERENCE-OWNED FACILITIES – Use by Other Organization 5120

Revised 4/12/17

When it is the desire of a congregation or institution to share an Association-owned facility with a non-Seventh-day Adventist (SDA) organization, the following steps should be taken to protect the Association:

  1. Obtain a sample lease agreement from the Association Treasurer’s Office.
  2. The requesting congregation’s tenets of faith must be in harmony with evangelical Christian concepts.
  3. The religious practices of the congregation cannot be a source of embarrassment to the Seventh-day Adventist Church.
  4. The use shall have the approval of the pastor and the church board.
  5. The non-SDA organization shall sign a Use Agreement spelling out the terms of the use of the facilities and the agreement that the “using” organization hold the Association harmless from any liability that may result from the use of the facility. The Use Agreement should be reviewed by local legal counsel or submitted to the Conference for review prior to signing.
  6. The non-SDA organization shall file with the Association annually a certificate of liability insurance indicating at least $1,000,000 per occurrence ($3,000,000 preferred) liability coverage, $1,000,000 damage to rented premises coverage, and $10,000 medical expense coverage. The certificate must name the Georgia-Cumberland Association of Seventh-day Adventists, Inc. DBA (doing business as) [local entity name] as an additional insured.  If the non-SDA organization has employees working on the Association-owned property then a certificate of workers’ compensation insurance must be provided to the Association annually.  If the non-SDA organization will be using vehicles on the Association-owned property then a certificate of auto liability insurance must be provided to the Association annually.  Insurance shall be from an insurer rated A Class VII or better from A. M. Best. Coverage shall remain in force for the duration of the usage.
  7. All or a portion of the property tax exemption granted by the county or city may be jeopardized if the property is not being used exclusively for tax-exempt purposes. Accordingly, for-profit organizations and individuals should not generally be allowed to rent or use the property for for-profit purposes.

 

RENTING FACILITIES

From time to time Adventist congregations find it necessary to rent facilities. Given that Adventist use of the church building falls primarily on Saturday, the opportunity exists for shared use with those who use church facilities primarily on Sunday, renting either from or to such groups. While renting facilities from other churches may be a useful stopgap for Adventist congregations in transition, for the long term members usually see this as an unsatisfactory arrangement. Over time the desire and convenience of owning one’s own church building usually brings the congregation to the decision to obtain their own property.

However, if another church group in the community has lost their place of worship, allowing or even inviting them to rent the church for a period of time may be the Christian thing to do. In such circumstances every part of the rental agreement should be clearly stated in a legally binding document signed by the renters and by the conference officer in charge of church properties, and approval from the conference should be received. Counsel from the conference attorney should be sought in preparation of these documents. Rental income may be taxable under certain circumstances. Be certain that the church insurer knows about this rental agreement and has insurance policy coverage. Renters also must obtain renter’s insurance to cover the possibility of an accident while they are renting the property.

Long-term rental of church buildings to other churches or organizations should be approached cautiously. The practices and reputation of some groups may adversely affect both the comfort level of the congregation and the perceptions of the community. Such rentals may lead to misunderstandings, cause extra wear on buildings, and increase maintenance and utility costs. Congregations that rent their church in order to raise additional income are frequently disappointed with the results.

Ministers' Manual, pp. 151-152.

 

Renting our churches to others

James A. Cress

When the Frederick, Maryland, Adventist Church suffered a tragic electrical fire and their building burned to the ground, a neighboring congregation, the Church of the Brethren, graciously offered the use of their facility to the newly-homeless Adventists. Likewise, the Denver First Seventh-day Adventist Church made the same gracious gesture to a Presbyterian congregation who lost their building to fire.

During times of tragedy, it is easy to see how Sabbath and Sunday worshiping churches can serve each other's crisis needs by making facilities available to those who have been deprived of their buildings.

Recently, however, I was asked whether the Adventist Church has a policy regarding renting our facilities to other groups who request such use for their regular Sunday services. As I began to research the issue, I discovered that a policy exists at the General Conference which addresses insurance issues. However, in consultation with some colleagues, we came up with other issues that should be considered when contemplating such a step.

The issue at hand, therefore, is whether or not to rent our facilities to other Christian organizations. It seems that if these congregations are Christian, we should at least be open to considering their request to rent our facilities. After all, in many places throughout the world we depend on the generosity of other denominations renting their facilities to us as we attempt to plant new congregations or await the time when sufficient funds allow us to purchase or construct our own buildings.

While it is clear that the "other Christian congregation" will not worship exactly as Adventists, it is equally clear that a benefit may result from such close interaction between two church families. For example, a Methodist church would not immerse; a Baptist church would teach eternal torment; and all such potential renters would worship on Sunday---which is surely why they seek the use of our facilities, since they could not rent other "Sunday-keeping" churches.

If you have been approached with such a request or are thinking about renting your church to another group, I suggest you consider these conditions for any rental process:

1. Concurrence of the local union and/or conference leadership. I always encourage pastors and churches to seek the guidance of leadership in their specific area.

2. This issue must not become one that splits the congregation into opposing factions. A substantial majority of the local membership (not just a simple or bare majority vote) should be in eager agreement before you rent your facilities.

3. Any lease should include specific agreement that the other church will not publicly attack Adventist doctrines or practices even as they are dependent upon our good will in renting our facilities to them.

4. A firm rental agreement/contract with a substantial damage deposit (refundable) plus at least three months rent paid in advance should be negotiated. Then, the renting group should, for the duration of the contract, remain paid for three months in advance. Such contracts should also include a 90- day escape clause for either group, should the rental situation not work out.

5. A small committee (perhaps only three or four individuals) should be appointed and empowered by the Adventist church board to negotiate and enact all agreements and contracts. The other group should expect to have negotiating contact with only that group rather than attempting to work with an entire board.

6. Appropriate liability insurance protection for the renting congregation which also indemnifies the Adventist congregation should be purchased and maintained at all times. Such insurance policies should be structured so that the Adventist Church is notified if the policy lapses for any reason. Furthermore, the representatives of Adventist Risk Management should be consulted and their advice followed regarding all insurance regulations and contract provisions.

7. Any lease agreement should clearly stipulate what facilities are available to the other congregation. For example, are you renting only your sanctuary or does the other group have access to fellowship halls, Sabbath School classrooms, etc. Likewise, your own department leaders should be consulted as to what guidelines are to be followed for use of resources in their classrooms or facilities.

8. The lease contract should also stipulate what days and hours the renting group has access to the church and whether or not they are allowed a portable sign during the times of their services. Rarely would I encourage erection of a permanent sign that stays up all through the week.

9. The charges for renting a church facility should be sufficient to cover all utilities, janitorial, supervision, and security services plus provide a profit to the Adventist church. One clear exception to renting for profit is when another church has faced a crisis i.e., their church has been destroyed by fire, vandalized, or suffered a tragic loss. Then we should provide our facilities gratis or as economically as possible to the other church for the short-term interim while they rehabilitate or rebuild their structure.

10. Any funds that come from the rental of our facilities should never be used for general church budget or local expenses. Rather, use rental income for capital improvements, evangelism, special projects, etc. Do not let the Adventist Church become dependent upon rental income for its day-to-day operations. I know of one congregation that rents various parts of its facilities to three or four different groups each week and could not survive financially if they lost even one of the renters. We should never place our church in such jeopardy.

11. The Adventist pastor, along with the small committee, should attend the first worship service of the renting congregation and welcome them to the Adventist facilities and express joy and delight in their presence. A small welcoming ceremony might be appropriate.

12. An annual review of the lease, of the ongoing interaction between the two congregations, and of any other pertinent matters should occur between the small committee from the Adventist Church (which would report to the church board) and the operating committee of the other congregation. Such a process will insure continuing good relationships.

13. I strongly counsel against renting our churches to non-Christian, cultic groups. On the other hand, if we rent our facilities to another Christian group, we should make them feel welcome regardless of the reality that their worship, polity, or practices may well be different than ours. For example, we could hardly expect to mandate only vegetarian meals in our fellowship halls.

14. If the other group eventually builds or buys its own facilities, it is a generous gesture to farewell the departing renters with a contribution from our profits toward their new venture.

 

From the White Estate: