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Top tips for hiring out your estate
Hiring out your property can be an effective way to secure a revenue stream from typically the largest asset on your estate. Joanna Goddard is Founder and Chairman of Estate Life, the leading specialist in the private hire and commercial use of historic properties and has advised Channel 4’s Country House Rescue since its inception. Here, she shares her top tips for those considering this type of rural diversification.
Historic properties prove popular venues for a range of events and activities; from corporate events and film locations to weddings, rock concerts and festivals. While venue hire can generate substantial income for castles, stately homes, halls, and churches, other popular locations include barns, gardens, and derelict buildings. The income generated represents a useful contribution to maintenance and running costs and successful venue hire businesses often become significant for local employment.
“A business approach can maximise the return on investment from venue hire, as well as ensuring your asset is protected”
A business approach can maximise the return on investment from venue hire, as well as ensuring your asset is protected. Various legal issues, the scale of the activity, or the sums involved, make a formal written contract the most appropriate option. Estate Life offers a full toolkit providing step-by-step guidance on how to prepare for, market, price and position a profitable hire business. The following top tips may get you started:
- Keep it confidential – Even before a contract for hiring a property is agreed, confidentiality can be an issue. Corporate hire can include event professionals securing venues for high profile clients. Proprietors may be asked to sign confidentiality agreements as a precursor to any hiring negotiations. Making staff aware of the importance of compliance is vital. The fact that you have long-serving staff and/ or are family run can prove advantageous.
- Structure fees – Structure payments so that the hirer has paid in advance and include a contractual obligation to pay the full fee in the event of late cancellation precluding a replacement hire. Requiring hirers to obtain event cancellation insurance so that they are able to pay you if they cancel may be sensible.
- Be specific– The contract should specify the areas of the property the hirer will and will not have access to, as well as routes of access. If large numbers of people are expected, access arrangements from the main road should be discussed beforehand with the police.
- Calculate the risk – Anyone hiring out a property as a business needs to consider the health and safety of those using it and their own employees. Risk assessments should be carried out and appropriate steps taken to minimise potential dangers. The proprietor should seek to contractually shift any risks to the hirer. Certain limited risks (death or personal injury caused by the proprietor’s negligence) cannot be transferred, but all others should be passed on and the hirer should be obliged to assess, mitigate and insure risks to those attending or working at the event. Proprietors are advised to request copies of the hirer’s insurance policies.
- Get the licensing right– If you are hiring out your property for use as a place of public entertainment, you must hold a public entertainment licence. A liquor licence will be required if you or the hirer proposes to sell alcohol. As proprietor, you can shift the responsibility for obtaining these licences to the hirer but you should request evidence that they are secured. You should also impose on the hirer an obligation to comply with the licences to avoid the property gaining a bad reputation, rending it more difficult to obtain licences in future occasions and limiting its marketability.
- Think ahead– The use to which the property may be put should be specified. If the event is a wedding, spell out that use is for a wedding only. If any major changes are going to be required to the grounds or property, for example for a music festival, ensure that the contract covers restoring original layouts.
- Explore Third Party Rights – It is not unusual for there to be parties other than the proprietor and hirer to be involved in an event (e.g. third party rights to event photography). The proprietor should be aware that their property may be photographed and that they will not receive direct benefit unless photographic rights are sold separately or factored into the charge. Exposure of valuable works of art to the public eye should also be considered.
- Decide what’s personal– While you may be happy to make your space available; you may not wish to make all of your possessions available at the venue. Bear in mind that it is likely to be the ambiance of the property that appeals to prospective hirers, so you should consider room dressing. Clearing rooms can be expensive, so care should be taken to ensure that the cost of removal and storage is recovered from the hirer.
- Calculate the costs – VAT may be chargeable. Property VAT and the interaction of VAT with charitable status (for example when a heritage property is held in a public trust) are complicated areas, and specialist advice should always be sought.
“Establishing written rules helps to ensure that events run smoothly, memories remain unsullied by bad feelings, and that your venue’s reputation and popularity grow and grow”
Springkell, an 18th century house by Lockerbie in Dumfriesshire
As with all commercial relationships, if the ground rules are clearly understood at the outset there is unlikely to be any need to revert to the contract as everybody understands their responsibilities. Establishing written rules helps to ensure that events run smoothly, memories remain unsullied by bad feelings, and that your venue’s reputation and popularity grow and grow. And, if it does all go wrong, you may be very glad indeed to have things in writing.
Estate Life works with landowners, family businesses, factors, trustees and managers to research, establish and develop commercial projects on rural estates. They are the UK’s premier resource for vibrant and profitable historic properties and also procure goods and services for member estates. www.estate-life.com
Founder and Co-owner
Published on 28th June 2015