CAPE ELIZABETH —The Planning Board on Tuesday approved rules governing how residential properties may be used as for-profit event venues.

It also OK’d a zoning map amendment that allows the Sprague Corp. to continue to rent property at Ram Island Farm for weddings and other events.

The special events ordinance, which must be approved by the Town Council, would regulate the rental of residential property for private events and parties. The use of residential properties as a businesses for fee-paying functions is currently not allowed.

The issue came to light after the town became aware the Sprague Corp. has been renting Wentworth Lodge on Winters Lane at Ram Island Farm for several weddings a year.

Under the ordinance, if a person or business wants to hold these events on their property, they have to apply for a zoning map amendment for their lot to be included in the special events facility overlay district. The Sprague Corp. applied at the end of May and was approved by the Planning Board on June 16.

The special events facility ordinance would allow property owners in the RA, RB, and RC residential zoning districts to have “small-scale, hospitality venues” on their property, if the property is a minimum of 15 acres.

The ordinance was drafted by the Planning Board to allow residents to hold for-profit functions, but with rules and restrictions. Some of these restrictions have changed since the ordinance was last before councilors on May 26.

The ordinance draft had said that no event could last more than eight hours, but Town Planner Maureen O’Meara said the Sprague Corp. had a problem with that.

“They have some concern about that because sometimes people will actually set up for an event the day before,” O’Meara said. “They’re concerned (the ordinance) won’t allow for the kind of set up they’re used to.”

Planning Board Chairman Peter Curry said this was a valid concern.

“I think Sprague Corp.’s point about set-up and take-down is probably good,” he said.

The board changed the ordinance to say that events are allowed to last eight hours, in a calendar day, excluding set-up and break-down. They added “in a calendar day” to clarify that a rehearsal dinner held the night before is considered a separate event.

Other requirements would include not exceeding 275 attendees; amplified music can only be played between 9 a.m. and 10 p.m., and no more than 12 events can be held a year.

The board also decided that property owners in the overlay district must come back to the board every three years for renewal.

“At that point you would be able to look at things like how the event facility has been operated, (and) if there have been complaints from the neighbors,” O’Meara said.

A Town Council meeting to receive and review the ordinance has not yet been scheduled.

Kate Gardner can be reached at 781-3661 ext. 125 or kgardner@theforecaster.net. Follow her on Twitter: @katevgardner.