Commercial Lease Issues for Churches or Spiritual Organizations

Suppose your congregation’s Church building is too small for its growing numbers. Your Church board decides to rent space in a different building for worship purposes. The board finds a different building to use and is negotiating a lease.

Churches and similar religious organizations seeking to enter into a lease for use of a building for religious purposes should be careful of certain clauses. When reviewing a commercial lease agreement with a third party, there are certain aspects a Church board should consider. Read further for a few examples.

Use Clause—Permissive or Restrictive

Often leases will contain a “use clause.” A use clause can be permissive or restrictive. A permissive use clause is a clause in a contract that details what can be done, so all other “uses” are contractually prohibited. In contrast, a restrictive use clause prohibits certain activities, so all activities not listed in the contract are allowed.

While this is relevant for any business negotiating a lease, it is especially important for a Church looking to lease space for services. It needs to maintain its integrity as a Church, so there should be nothing in the lease that compromises that integrity. For instance, the lease should have a clause that religious gatherings can take place as a permissive use and that such gatherings do not violate any law.

Similarly, Churches might want the landlord to ban certain behaviors on the property because such behavior is inconsistent with Church ideals. For instance, it may want to ban marijuana use on the premises, because the premises are used for religious worship. It is imperative that prior to entering into a lease, the Church review the contract for permissive and restrictive uses.

Parking Lot—Times of Use and Keeping it Clear

Similar considerations should be determined for other use of the property. The lease should include a clause that the property holds enough parking spaces for members of the congregation. If the parking lot is leased during weekdays to another company then the lease should clearly state that the parking lot operator needs to make sure that all cars are cleared from the parking lot prior to the start of services. The Church should look for a clause in the contract obligating the other party to remove those vehicles, without any expense to the Church.

Hours of Operations for Church Functions and Access to Property

The lease should define the parameters for use of the building. If the Church only wants to use the building on Sundays then this will not be an issue. However, many congregations want to hold events throughout the week. As a result, the lease should define what hours are for Church use.

A good example of an acceptable lease is a provision that allows the Church to hold events in the evenings between 6:00 pm and 10:00 pm. This would allow for events like bingo for seniors. It would also allow for Bible classes and similar religious-focused events.

Another example is designating certain nights of the week for Church use. Or stipulating that the Church can run a summer camp for children on the property during June, July, and August. Depending on the circumstances and needs of the congregation, this may be one of the most important provisions negotiated in a lease besides the right to use the property on Sundays.

Property Damage to Leased Property—is the Church Responsible?

Another issue is potential damage to Church property. The neighborhood may have vibrant nightlife, especially on Friday night. In addition, recent news reports detail instances where spiritual organizations are targeted by vandalism or protesters seeking to make political statements. The Church leadership should be sure to analyze the property repair sections of the lease to determine who bears responsibility for property damage not caused by the Church.

If you are on a Church or similar organization’s board and negotiating a lease for use as a Church or the like, you need a lawyer who has the keen insight needed for reviewing your lease. Eric L. Nesbitt and his associates have the experience and skill to review your lease for the proper deal. Contact them today to discuss this further.

Eric L. Nesbitt

Attorney at Law

Law Offices of Eric L. Nesbitt, P.C.

88 Inverness Circle East, Suite C104

Englewood, Colorado 80112

Phone 303-741-2354

Fax 303-346-5290

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Because of the generality of the information on this site, it may not apply to a given place, time, or set of facts. It is not intended to be legal advice, and should not be acted upon without specific legal advice based on particular situations