How to protect your church while others use the premises.
A charity permitted an outside group to use its facility for a Christmas party. During the party, a woman suffered serious injuries when she fell on a slippery floor. As a result of her injuries the woman underwent surgery for a complete hip replacement. She later sued the charity, claiming that it was responsible for her injuries because it had retained control over the premises during the party. She claimed that the floor was unreasonably slippery, and this dangerous condition caused her to fall. One witness testified, “It was obvious that floor was slippery. It was just waxed or something. I mean it wasn’t dirty. It was clean. Probably too clean.”
The charity asked the Louisiana court to dismiss the case, but its request was denied. On appeal, a state appeals court suggested that there was sufficient evidence that the charity retained control over its premises during the party to send the case to a jury. The court began its opinion by acknowledging that a property owner may be legally responsible for injuries that occur on its premises when they are under its custody or control. The court suggested that the charity had retained control over its premises during the Christmas party on the basis of the following factors: (1) the charity was responsible for setting up Tables for the party; (2) the charity provided a custodian during the entire party; and (3) the charity was responsible for opening the premises at the beginning of the party and locking the premises at the conclusion of the party. The charity’s custodian admitted that he had cleaned the floor prior to the party and that he was on duty and responsible for cleaning the floor during the party. Aufrichtig v. Progressive Men’s Club, 634 So.2d 947 (La. App. 2 Cir. 1994).
What can churches do to minimize liability for injuries that occur when outside groups use their facilities? Here’s a checklist:
- Have the outside group sign a “facilities use agreement” that (a) provides the group with a mere license to use the property; (b) contains a hold harmless and indemnification clause; (c) states that the church provides no supervision or control over the property when being used by the group. This document should be prepared by an attorney. The agreement should clearly specify that it is a license agreement and not a lease. The church’s potential liability for injuries that occur during the use of its property by an outside group will depend to some extent on the nature of the relationship. A license exposes the church to less liability than a lease.
- The church should be named as an additional insured under the group’s liability policy. Review the group’s liability policy to ensure that it provides adequate coverage, and does not exclude sexual misconduct.
- If the outside group’s use of the property will involve any participants who are minors (including minor children of participants), then the outside group should warrant that it has exercised a high degree of care in conducting background investigations on all persons who will have access to one or more minors to determine their suitability for working with or being present with minors during the outside group’s use of the property. The outside group also should warrant that it will use a high degree of care in supervising all activities involving minors during its use of the property under the terms of the agreement.
- Check with the church insurer to determine coverage issues in the event the church is sued as a result of an accident or injury occurring during the group’s use of the property.
- If you deny use of your property to any group because of its religious affiliation, be sure that you are legally permitted to do so under applicable federal, state, and local laws. Many jurisdictions permit religious organizations to discriminate on the basis of religion when allowing outside groups to use their property. Check with an attorney regarding the application of such laws to your church.
- The Americans with Disabilities Act prohibits places of public accommodation from discriminating against persons with a disability. The Act exempts religious organizations from this provision. Be sure to see if state and local law contains a similar exemption.
- There are several potential violations of copyright law that may arise when an outside group is using the church, including the following: (a) An outside group that plays copyrighted music or shows copyrighted videos or images may be committing copyright infringement. (b) If the outside group makes audio or video recordings containing copyrighted music, this is another possible example of copyright infringement. (c) If a musical group performs a concert in which copyrighted music is performed, then this may result in copyright infringement. At a minimum, the agreement should include a statement making the outside group solely responsible for compliance with copyright law.
- The fees received by the church may be subject to the federal “unrelated business income tax.” Generally, this tax will not apply unless the rented facilities are subject to an “acquisition indebtedness” (a mortgage loan). This tax is addressed fully in chapter 12 of Richard Hammar’s annual Church & Clergy Tax Guide, available from the publisher of this text.
- The agreement should clarify that the outside group will be solely responsible for the collection of any sales taxes on the sale of any product during its use of the facilities, and that it will indemnify the church for any taxes it is assessed as a result of the outside group’s sales occurring on (or a result of) its use of the premises.
- The outside group should agree to indemnify not only the church but also the church’s offi cers, agents, and employees from any and all claims or damages in connection with the use of the property by the outside group.
- The agreement should contain a non assignability clause.
- The agreement should state that the church does not warrant or represent that the property is safe or suiTable for the purposes for which it is permitted to be used under the terms of this agreement, and that the outside group (for itself and on behalf of all of its members, guests, or participants who will be using the property) acknowledge that the church is providing the property and all appliances on as “as is” basis.
- The agreement should clarify that the church will bear no liability if the agreement is cancelled due to any legal or regulatory compliance issue, such as a zoning ordinance.
For more practical help on how to share your ministry space with outside organizations, order the download “Managing Church Facility Use” at
ChurchLawAndTaxStore.com.
