Thinking of setting up a venue? Geldards’ associate solicitor Rebecca Stojak offers six tips to help prevent you getting into legal difficulties.
Although becoming a venue can be an excellent way to diversify, there can be unexpected issues not necessarily anticipated when the idea is explored round the kitchen table on a dreary January morning…
No one wants to be persuading a particularly grumpy sheep that he really shouldn’t be behind the bar in the marquee when guests leave the neighbouring farmer’s gate open. What do you say when the wedding couple can’t live without a firework display to rival London on New Year’s eve? What duties do you owe to neighbouring landowners and animals? Who is liable if temporary structures are not secured properly and blow away or fall down (or worse, injure someone)?
With the British climate being unpredictable at the best of times, and 2019 being one of the wettest years on record, the weather is often not on a venue’s side. Who foots the bill of putting walkways down when the proposed parking field resembles Glastonbury on a bad year? Or worse, what happens when you have paid for metal trackway in parking fields only to find them washed away by rain on the morning of a big event?
Sadly, all of the above (and more) are real situations clients have found themselves in, so what can you do and what should venues be thinking about?
1 Know your area
Firstly, what can and can’t you do on your land? Do you actually own the property/land where you want to create your venue? If not, check your tenancy or licence (or check your deeds if you own the land) to see if there are any restrictions on what it can be used for or what types of structures you can put up. Look into any rural development grants which may be available in your area to encourage regeneration for the type of venue you want to set up.
Check if there are any rights of way – do you want a group of ramblers wandering through a black-tie event? Can you do anything to stop them? It is important to seek advice from your local planning authority on what rules and regulations apply and find out what licences you will need, eg. will you need a personal alcohol licence or event licence? Find out if you are limited to how many events you can have a year or the type of event you can hold. These are all important considerations as they will impact what you can do and potentially how much money you can make.
2 Consider your neighbours
It is important to consider the venue’s neighbours both during the proposed use of the venue and set up periods. Talk with them and let them know well in advance of any plans you may have.
Ensure there is adequate and clear signage around your venue (including the perimeters and entrances/gates) to stop guests wandering into places they shouldn’t be. If signage is clear, any damage they cause to neighbouring property may be able to be claimed back, if not you may be liable for damage or losses suffered eg. if a guest lets the neighbour’s animals out and the animals are injured you may have to pay vets fees, or the losses suffered as a result of a lucrative crop being trampled.
Any dangers should be clearly cordoned off or signposted to avoid potential claims. You should ensure that the venue is as safe as possible, that appropriate health and safety checks have been done and risk assessments are in place. I once had a colleague tell me of a client who had a claim against them when their employee hadn’t replaced a manhole cover which a guest then promptly fell down resulting in a civil claim.
3 Fireworks and animals
Often parties and weddings want a spectacular firework display. Before you can agree to this (and when you are first setting up) consider if fireworks are something you are going to be able to offer. I have acted for both sides of civil claims relating to fireworks where expensive animals have been injured when insufficient notice (or sometimes no notice at all) has been given to neighbouring animal owners by venues.
It is important to consider if your venue is next to stables or a farm that has livestock. Section 4 of the Animal Welfare Act 2006 confirms that it is an offence to cause any unnecessary suffering to any captive or domestic animal (this could include farm animals or horses). For breaches of the act, venues could be fined up to £20,000 or the owners could be imprisoned for up to six months. The land owner could also bring a civil claim for losses incurred such as vets’ fees and personal injury caused to individuals by scared animals.
4 How will you operate?
Once you have decided that you want to open an event venue, talk to a solicitor. Although you may want to get on with the ‘fun stuff’ (and actually earning some money) it is important that you understand exactly what you are getting into legally. It is important that you ensure the business is set up correctly and that you are as protected as possible – be that as a sole trader, partnership or limited company.
You should also consider who is going to be part of your business and what would happen if you fall out. Where would you stand in terms of continuing it? Would there be any employment law implications? What if your marriage or relationship breaks down – can your partner claim a share of the business or even insist that part or all of the business is sold? These are all things your solicitor can help you protect against.
I would recommend talking to a solicitor as soon as possible; they will be able to advise you on your options and the potential risks so you go into your new venture with your eyes open.
5 Worst case scenario documents
Make sure that you have appropriate terms and conditions and contracts in place (that are actually used, incorporated and signed by customers) for both those wanting to hire your venue and traders/suppliers. Make sure you also know what external terms and conditions your venue has agreed with third parties and the implications.
I describe these to my clients as “worst-case scenario documents”. Hopefully, they can be signed by all parties then left to gather dust in a file never to see the light of day again. However, if things go wrong, the contract and terms and conditions set out what will happen; they are the rules that both parties agree to abide by and can cover a range of issues, eg. if someone doesn’t pay on time is there interest due? If the deposit is paid but then the event is cancelled with a week to go is the deposit refundable? How much notice would you want of a cancellation?
I would always recommend having your quotes and estimate documents, as well as your terms and conditions and contracts, drawn up by a solicitor. They will often have seen your type of business many times before and will be able to advise on specific (often specialised) clauses to include.
Even if your venue has been set up for years, I would still recommend that your terms and conditions and contracts are regularly reviewed to ensure they are offering you maximum protection and are fit for purpose. Often solicitors will do this for a small fixed fee (or in some cases for free).
I have seen clients with a dispute that their terms and conditions document does not adequately protect them from as it has been cobbled together over the years from various sources (sometimes even contradicting itself). In my opinion it is always better to invest in robust, fit for purpose terms and conditions and contract documents than have something go wrong.
Always ensure that you have adequate insurance policies in place for when things may go wrong, and review these every year to ensure they still cover your venue’s needs.
6 Force majeure
During the terrible rain and flooding of 2019 I had clients who had a big event planned after a week of heavy rain. The site was inspected and, as it was a lucrative event, they chose to hire metal trackway to try to preserve the land and ensure the site was safe. However, on the morning of the event, when the organisers got to the car parking fields, they found it had been washed away by a huge deluge overnight. The decision was then made to cancel the event.
Although this was not a small task, the venue team already knew exactly what it needed to do – who was contacting who etc. – as they had an adverse weather policy in place together with an up-to-date list of all of the suppliers’ and traders’ contact details.
The venue’s contract with suppliers and traders also had a force majeure clause in order to mitigate any losses. In this case, the venue was not under any obligation to repay any portion of the fees that had been paid prior to the occurrence of the force majeure event. This however always needs to be a commercial decision and venues need to consider how important relationships are with suppliers and traders, and what impact the decision will make to future events.
I would advise any decision to cancel an event due to adverse weather to be made in conjunction with a solicitor, so that the owners are fully aware of any potential risks, eg. the potential of being sued, and ensuring that the notice is sent out correctly and in accordance with any contract so it is effective and there is no right of recourse.
Ultimately, when considering any new venue business, planning and implementation are key to making sure an unforgettable time is had by all. It is important to ensure that all parties understand their role in supporting this, and contractual agreements and terms and conditions ensure everyone knows exactly what is expected of them. These documents form the basis of any agreement, and are the foundations on which success is built.
If you are reading this and thinking, “hmm, how would this affect me?” then please contact Geldards for further information, and we will be happy to lend our expertise.
About the Author
Rebecca Stojak is an associate solicitor at Geldards LLP and is part of the Commercial Dispute Resolution team. She is also a member of Geldards Agriculture and Rural team. Rebecca advises a range of clients from individuals and charities to large national and international companies.
Geldards’ Agriculture and Rural team is a multi-disciplinary team specialising in agriculture, rural and equine disciplines across all fields such as commercial property, corporate and commercial, family, dispute resolution and planning. Geldards advises a range of clients, from individuals, well known venues, large estates and events companies to suppliers and traders. Over the years, Geldards has come to advise its clients on a range of matters over a business’ life span – from the initial set up of a new business to diversification to advising when things go wrong.
If you have any legal queries, please do not hesitate to contact email@example.com or visit www.geldards.com