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Church Property - Part 2

A church's deed that gave the prior owner of the church's property an option to purchase the property in the event that the church ever discontinued using it for church purposes.

Key point 7-13. A restrictive covenant is a restriction on the use of property. Such restrictions often are noted in deeds to property, but they may appear in other documents as well. Such restrictions apply to a church's use of its property.

* A Michigan court upheld the validity of a provision in a church's deed that gave the prior owner of the church's property an option to purchase the property in the event that the church ever discontinued using it for church purposes. A landowner sold several acres of property to a church in 1962. The deed contained the following clause: '[This conveyance is] subject to the express condition, to which the church agrees in accepting this deed, that should the church fail to use, or discontinue using said property for a church, parsonage … or other religious purpose, said church, its successors and assigns shall, at a price of no more than ...

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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  • September 1, 2006

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