There are a number of ways in which all types of voluntary organisation might share buildings but they can be simplified into to three main options:

Option 1: Lead organisation

This model for sharing premises has one organisation owning the property or holding a main lease (also known as a head lease) from the owner/landlord, and renting out space to other organisations (figure 1).

Figure 1: Option 1.

The advantage in this option is that this is a simple structure. The main disadvantage in this arrangement is the potential risk for organisation A if the other organisations decide to move away from the arrangement as they are liable for the full cost of rent, services and/or loan repayments.

Option 2: Joint ownership

In this option, two or more organisations buy a property jointly (figure 2). The advantage of this arrangement is that each organisation only needs to find their share of the purchase price and so the financial risk is shared. However, this ties each organisation to a long-term commitment and it would be problematic if one organisation decided to leave.

Figure 2: Option 2

Organisations would ideally need to make an agreement setting out clearly how exits from the arrangement are to be handled and any obligations that each partner might need to meet.

Option 3: Separate Company

With this model, the partnering organisations set up a separate company to own the property and they nominate members from their organisations to the management committee or trustees’ board of the new property company (figure 3).

Figure 3: Option 3.

Each partner organisation then rents space from the property company. The property company may also rent out space and sell services to other organisations and so generate an income, reducing the overall costs to the partners. The main advantage of this arrangement is that the property company can itself be a viable business and therefore manage any risk from participating organisations; rules may be incorporated so that organisations may leave the arrangement and others may join.

If the purchase of the property is financed through a loan or a mixture of grants and loans, the partnering organisations are liable for the repayment through the property company. If the property is not purchased and the property company leases the building on a long-term basis, the owner/landlord may require guarantees from another more established organisation.

For all options, organisations should seek professional legal advice when entering an arrangement to share premises.