renting common house to outsiders
From: Karen Schwalbe (kschwalbewhrc.org)
Date: Mon, 13 Aug 2001 09:32:01 -0600 (MDT)
We are started renting out part of our common space on a larger scale for
the first time this summer.  (Alchemy Farm, Falmouth, Massachusetts) Our
common house was a pre-existing 6,000+ sq ft barn with a large (~900 sq ft?)
auditorium.  This auditorium space is being rented to a community member who
is running, though not actually teaching in, a cooperative dance studio.

Between our insurance company and our lawyers these are the issues we have
or will be dealing with.

Liability insurance - we have it, though it is more specifically for members
using the common house as an extension of their homes than commercial public
use.  There are many shades of gray here.  Study groups, dinners, small
parties and our semi-public no-profit food buying club seem to fit in well
here. Outside users, especially commercial use, do need to have their own
liability insurance.  In the dance studio situation we would be covered if
someone slipped on the stairs before class, but would not be liable if the
dancer were hurt in the class itself.  If the teacher didn't have insurance
there would be a problem.  Our insurance company says it would provide the
lawyer to say we (the neighborhood association) we not liable.  There is a
moral quandry, too, if there was injury that wasn't covered by someone's
insurance.

Zoning by-laws. Business use as an extension of a home business is okay too
under this particular type of insurance.  The fuzzy part of this is what is
legal under the zoning by-laws.  Our yoga teacher member who teaches in her
home and the common house is fine.  Her friend, who teaches in the common
house on an occasional basis, needs her own liability insurance.  The dance
studio situation may need to be clarified by the building inspector.  Our
lawyer said the building inspector it is a 50/50 situation, and the extent
of use will probably be the deciding factor.  This is an issue because our
insurance would not cover something that was an illegal activity on the site
and violating the zoning by-law isn't legal.  Then our individual assets are
at risk.

Occupancy permit for public use - We have an annual inspection by the town
building department that makes sure safety issues like exit lights and fire
extinguishers are okay.  We also have the building dept. peeking over our
shoulder once a year which keeps us honest <G>.

My advice is to talk with your insurance agent and your lawyer and the
building inspector only if absolutely necessary.  This is how it is in
Massachusetts; your mileage may vary.

Price - sort of a four-tiered system.
Member use/non-profit - free.
Member use/for profit - 10% no minimum.
Non-member use/non-profit - fuzzy here, but usually negotiates at $1/head.
Could need liability insurance
Non-member use/for profit - 20% with a $20 minimum for a four hour slot
(i.e. AM, aft, or evening). Does need liability insurance.

As an aside, we are still dealing with the impact on the community of the
greater public use of the common spaces.  There are problems - noise,
parking, having to dealing with nosy strangers and corralling strange small
children in our play spaces and yards.  Impact tends to vary based on
distance from the common house. My advice here is to go slow and make short
term commitments to start.

Karen Schwalbe
Alchemy Farm
Falmouth, MA

>
> We live in a town (Northampton MA) without a lot of rental space for large
> meetings, dances, and other public events.  Since our great room/dining
> room is empty more often than not, we're considering making it
> available at
> a reasonable fee to nonprofit groups.  Are any of you doing this?  If so,
> are you encountering any problems?  How much do you charge?  Learning of
> your experience with this would be very helpful.  Thanks.  Julie Mazo,
> Pathways Cohousing.
>>

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