Facility Use Agreement 101: What to Know

A facility use agreement is essential for organizations that rent or lend their space. It establishes clear usage rules, and policies as well as defines liability for space holders. 

Whether it’s a school gym, a community center, a park pavilion, or a corporate meeting room, having a clear agreement in place ensures that all parties understand their responsibilities.

What is a facility use agreement?

A facility use agreement is a formal contract that outlines the terms and conditions under which an external party may use a facility or space. It includes provisions that define use purposes, costs, and length requirements. 

Since they are legally binding, it’s important to have strongly defined terms to avoid discrepancies between parties. Additionally, facilities use agreements help those using a space maximize its benefits and are essential to adhering to your facility maintenance plan. 

Who typically needs a facilities use agreement?

These common documents are found in many places and in use by many different types of organizations. They are common for:

• Schools allowing third parties to use gyms, auditoriums, or classrooms
• Businesses renting office space or conference rooms for temporary use
• Community centers leasing rooms for public events or private gatherings
• Event venues hosting weddings, parties, or corporate functions
• Religious institutions a church facility sharing their space for community events or external functions

Why are these agreements important?

Contracts are an essential part of business, regardless of what they define. Facilities use agreements are no exception. They help clarify expectations, protect both parties legally, and streamline operations by defining terms of real estate use, financial obligations, and liability protections. In addition, they help support facilities management processes already enacted by your team.

When do you need a facility use agreement?

A facility use agreement is necessary whenever an organization rents or loans its space to an external party. Some common situations include:

• Renting an event venue for a private or corporate function
• Schools permitting third-party use of gyms, auditoriums, or classrooms
• Municipalities leasing community centers for public gatherings
• Businesses offering office space for temporary or shared use

Benefits of a facility use agreement

By outlining the terms of use in writing, both parties can operate knowing their rights and responsibilities. Here’s why having a facility use agreement in place is essential:

Legal protection

The main purpose of facility use agreements is to protect both parties legally. It prevents misunderstandings and liability disputes. Ensure that the agreement includes indemnification clauses and insurance coverage requirements.

Clear responsibilities

This section outlines both parties’ responsibilities in rental or lease agreements and defines maintenance, cleanup, and security obligations. It also details who is responsible for setup and teardown whether that’s employees or attendees.

Financial transparency

Rental payments are an arduous part of the event process for employees. A facility use agreement helps circumvent the difficulty. These documents clearly state rental fees, deposits, and payment schedules. They prevent unexpected charges or disputes over costs.

Operational efficiency

A standardized facility use agreement helps optimize facility rental procedures. It is the first step to ensuring consistency across the rental experience. And helps organizations enforce facility rules.

Key components of a facility use agreement

Now that we know some of the basics about facilities use agreements. It’s critical to understand how to write one. A comprehensive facility use agreement should include the:

Agreement details

This is the basic information that spells out the facility use agreement. It’s important to include the names and contact details of both parties. Also, this section should describe the rental facility.

Usage terms and conditions

The terms and conditions written consent section defines the rental. It details the approved purposes for the property owner’s space, its timeframe for use, and any restrictions like noise limits, occupancy caps, and guidelines.

Payment terms

Payment terms are an important part of these documents, even if the space is free to use. They establish equipment fees and deadlines for spaces that cost money, but they also outline penalties and damage fees if the space isn’t well maintained. That information is key to include even for free use facilities in case the contractors or the rental party doesn’t adhere to defined rules.

Insurance and liability requirements

While insurance is not always required, indemnification clauses are. They shift risk from the facility owner to the party occupying a rental space and vice versa depending on what’s defined. If insurance is required, it’s imperative to include that written notice here as well.

Maintenance and tear-down rules

To enforce indemnification clauses, it’s critical to define space rules like maintenance and tear-down. This section defines facility upkeep and condition responsibilities as well as details security, agents’ access, and emergency procedures.

Termination clauses

Finally, facility use agreements should include termination conditions and notice requirements for cancellations.

Facility use agreement template form

To ensure your rental agreement works for your organization, it’s best to hire legal representation to help craft it. 

Once a standard contract is in place, facility scheduling software can help expedite the process.

Our template includes the details you’ll need to streamline your rental process.

How facility scheduling software aids use agreements

Managing facility rentals manually can be time-consuming and a written agreement is prone to errors. Facility rental software simplifies with:

• Easy-to-use forms, reducing paperwork
• Request and approval workflows to streamline the booking process
• Safety and liability compliance standards through reporting and logging
• Functionality allowing users to upload proof of liability insurance
• Event portals where users can submit requests, check availability, and receive automated confirmations

FMX for facility scheduling

Regardless of your facility rental needs, FMX can help you streamline the property lease process. Make event scheduling faster, easier, and more reliable with configurable request forms, approval processes, and more.

Whether you’re managing municipal buildings, community centers, schools, or sports complexes, FMX creates a seamless scheduling experience. Our software provides a centralized platform for requests, agreements, approvals, and payments.