The latest risk alert from CUNA Mutual Group warns credit unions looking to derive extra income by leasing available space to protect themselves in lease agreements.
Contract language risks to be concerned with includes the verbiage/conditions and terms in the lease, hold harmless agreements, the type of business, and the potential interaction between the operation of the credit union and the business, according to the risk alert.
The risk alert states that credit unions should consider the following risk mitigation tips:
- Consult with a real estate attorney during the leasing process whether the credit union is the lessor, or lessee. This includes the creation of the lease as a lessor and protecting the credit union by transferring risk where allowed. As a lessee, having the attorney review the lease, also to protect the credit union and suggesting areas for negotiation.
- Determine if the type of business may cause risks to the operation of the credit union or the assets of the credit union including the property itself.
- Include the tenants in any type of training where necessary which involves safety measures in place related to situations that may arise in the credit union which effects the health and safety of the employees including the evacuation of the premises.
CUNA Mutual Group’s risk alerts, in addition to additional risk-prevention resources, may be accessed in their Protection Resource Center. Log-in is required.