Clubhouse For Rent Renting Amenities for Revenue

 Tennis courts, event spaces and private swimming pools are practically standard  issue when it comes to suburban homeowners associations and condominium  communities. While the residents who enjoy these amenities as part of their  ownership generally use them solo or in the company of friends and family, some  associations occasionally make their facilities available to rent for private  events, such as a wedding reception or a work meeting. Renting out a clubhouse  or other community amenity can be a useful source of revenue for HOAs looking  to make some extra money, but it also raises issues of access and liability.  

 Coverage is Crucial

 Whether a community cashes in—or cashes out [see sidebar]—by renting out its amenities or other facilities for a fee largely depends on  the size of the association, the types of amenities involved, and how those  amenities are defined and operated. When condo developers promote boat basins  or an in-house spa as homeowner perks, those facilities are generally operated  by an outside company completely independent of the homeowners’ association itself, and thus not at a board's disposal as revenue generating  entities.  

 By contrast, something like a clubhouse or community room is a standard amenity  for most HOAs, and associations usually have full control of these areas and  may exercise options when it comes to how they're used. For the most part, HOAs  tend to maintain these amenities for resident use only. Bernie Gitlin,  president of Massachusetts-based Global Insurance Network explains why  associations may opt out of renting their common facilities.  

 "I have seen some communities rent out to the general public,” he says, “but this could get a condo association into the rental hall business, which  opens up a lot of other issues," like serving alcohol on the premises, for  example, and the liability considerations that raises. Gitlin stresses that  it's vital to consult with your insurance carrier before letting any outside  people use your HOA's facilities for any purpose.  

 For any community considering renting their clubhouse or other amenities, legal  professionals stress the importance of having an attorney review the  association's governing documents to make sure renting is even allowed, and  also making certain that the proper insurance is in place before any rental  agreements are made. An HOA's insurance company will routinely supply coverage  for the association's fitness center, pools and function spaces, but sometimes,  when parties, classes or other events are held in a common area, outside  vendors take on the responsibility, with their own insurance, licensing or  permits. For example, Gitlin cites a community where yoga classes were offered  in the clubhouse, "And the instructor had her own insurance that covered her  classes wherever they were held.”  


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