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Leases
Open Collective Foundation can enter lease agreements on behalf of hosted Collectives, to rent space like offices or warehouses to facilitate your work in communities.
- Any legal contract in the name of a hosted Collective must be signed by OCF as party to the agreement, because OCF is the legal entity of the Collective. OCF will be signing on to be responsible to fulfil the lease terms, so we'll need to look over the paperwork and put some things in place (see below).
- If you take on a lease in your own individual name*, you are personally on the hook for the rent, even if your Collective budget runs out. If you need to move on from the project, it can be difficult to pass holding the lease to a different person.
- OCF is set up to get liability insurance that covers the specific leased premises and the activities of your Collectives. Most leases have a liability insurance clause requiring this to be in place.
- You can use Open Collective's features to fundraise lease costs, transparently. This has proved very useful, for example when a coalition of mutual aid groups in a city pooled money to lease a warehouse for food distribution. They could easily put money together, see who gave what, and seek further grants and crowdfunding.
*If you wish to personally enter a lease for a space used by a hosted Collective, you can submit receipts of rent payments to your Collective budget and get reimbursed (provided this use of funds is in service of furthering the Collective's impact mission).
1) The Collective must set aside money for the full value of the lease contract in advance (in a separate Collective or Project), including rent and all associated costs such as utilities. This is to prevent a situation where rent has to be paid but the Collective doesn't have enough in their budget. E.g. if the lease term is 12 months and the rent is $1,000 per month, $12,000 must be set aside.
There are ways to mitigate the budget requirements, so less has to be held up front:
- Agree a shorter term lease.
- Include provisions for breaking the lease early, e.g. if it says you can exit the lease with 1 month's notice, you only need 1 month's rent set aside.
- A contract with a funder to donate to pay the rent over time, such as a monthly contribution in the rent amount.
- If you later get funding, like a grant, toward paying the rent, you can free up the amount previously set aside for rent to pay other expenses.
2) At least two Collective admins need to sign a separate contract with OCF stating that they will uphold the terms of the lease, because OCF can't be there to oversee how they're using the space day to day. This means they promise not to do the things the lease says aren't allowed, like subletting, building works, etc.
All third-party agreements, including rental agreements (short or long), need to be approved and signed by OCF before associated expenses (like rent) can be approved. If you would like OCF to approve and sign an agreement, please email us at [email protected].
Last modified 7mo ago