It is common for school districts to permit the use of school district property by outside individuals, groups, or entities. Questions often arise on how to properly characterize the use, including whether it constitutes a temporary facility use (such as under a facility use agreement or license), or whether the arrangement is intended to be longer term and more akin to a lease or an easement. Depending on the type of use, there are different forms of agreement that apply, as well as different approvals that are required.
School boards are empowered to grant the use of school property on a temporary basis. Under Wis. Stat. § 120.13(17), a school board may “grant the temporary use of school grounds, buildings, facilities, or equipment, upon such conditions, including fees not to exceed actual costs, as determined by the school board, to any responsible person for any lawful non-school purpose if such use does not interfere with use for school purposes or school-related functions.” The statute defines “actual costs” as “reasonable costs for maintenance, security, supervision of participants who are minors, if applicable, and cleaning.” In addition, the statute expresses that the user is primarily responsible for damage in connection with use of school district property by the user.
Most school districts have facility use policies to address the parameters of such temporary use of school district property, including, but not limited to, the process by which one can request to use a particular facility, applicable fees, rules, and insurance requirements. A facility use agreement may also be drafted as a recreational agreement under Wis. Stat. § 895.523, which must specify the permitted activity, time and place of the activity, eligibility requirements of participants, supervision, and specify assumption of risk. Elector approval is not required to allow temporary use of school district property.
The key distinction between facility use versus a lease is that facility use is intended to be temporary and is usually short-term. Granting a third-party permission to use a district facility, such as through a facility use agreement, is similar to a license, in that it gives permission to a third party to use school district property for a specific purpose and for a specific, limited period of time. A facility use agreement or license does not transfer an interest in real property, and it may be exclusive or non-exclusive.
By contrast, a lease generally involves the transfer of possession of real property for a definite period of time, thereby providing the tenant with a leasehold interest. Leases also address the nature of the possession, including whether it is intended to be exclusive, as well as the responsibility to pay rent and maintain the property, among other terms. It is advisable to incorporate the lease terms into a written lease agreement. Lease agreements for more than one year must be in writing. Lease agreements are not required to be recorded with a county register of deeds, but sometimes parties choose to do so.
School boards have the power to “lease school sites, buildings, and equipment not needed for school purposes to any person for any lawful use at a reasonable rental if approved at an annual or special school district meeting.” (Emphasis added.) Wis. Stat. § 120.13(25). Therefore, for common and union high school districts, elector approval is required to lease school district property to third parties, with some exceptions, such as for agreements with other governmental bodies.
Easements differ from leases and licenses. An easement grants a third party the right to use real property and transfers an interest in the property to the third party. Easements are an encumbrance on real property and often run in perpetuity. They are usually non-exclusive. In other words, a school district can still use the easement area so long as it does not unduly interfere with the third party’s easement rights. A common example would be a utility easement. Easements must be set forth in writing and recorded. Easement agreements address key terms, such as the uses allowed, whether expansion of use and assignment of rights is allowed, the legal description of the easement area, maintenance obligations, and indemnification obligations.
The statutes do not directly address whether elector approval is needed for a common or union high school district to grant an easement to a third party. In the absence of a statute that would otherwise authorize the agreement (such as an agreement with another governmental body), a school district may wish to obtain elector approval to avoid any challenge that the school district did not have authority to grant the easement.
It is important to properly characterize whether use of school district property by a third party is a temporary facility use (or license), a lease, or an easement. The title of the document is not necessarily controlling, rather, it will depend on the nature and duration of the usage rights conveyed.
