• Key point.Eminent Domain Some deeds to church property contain a “reversion” clause stating that title will revert back to the previous owner in the event that a specified condition occurs. The courts will enforce such provisions, so long as they can do so without interpreting church doctrine.
A Washington court ruled that a church’s property did not “revert” to the previous owner because of immaterial violations of a condition in the deed that the property be used “exclusively for church purposes.” Property owners sometimes sell or give property to a church with a deed specifying that the property will revert to the previous owner if the church violates a specified condition. For example, a deed may convey title to a church “for so long as the property is used for church purposes.” Or, a deed may convey title to a church “for so long as the property is used as a Baptist church.” Such deeds vest only a “determinable” or “conditional” title in the church, since title will immediately revert back to the previous owner (or such person’s heirs or successors) by operation of law upon a violation of the condition. It is essential for church leaders to be aware of any such conditions in the deed to their property. Unfamiliarity can lead to unexpected consequences, including a reversion of church property to a prior owner. A recent case in Washington addressed this important question.
In 1954, a man executed and delivered a deed granting an acre of property to a church (“Tract A”). The church accepted the gift and recorded the deed. The deed contained certain restrictions, including a requirement that the church erect a church building on the property within three years of the date of the deed and that the property be used “for church purposes.” The deed also required that the property “in no wise be used for other than church purposes” and the church should neither convey nor attempt to convey the land for use for any other purpose. A “right of reverter” in the event of breach of any of these provisions is also in the deed. A right of reverter automatically reverts title back to the prior owner in the event one of the specified conditions is violated.
In 1956, the church built a sanctuary and parking lot on the property. In the early 1980s, the church built a second building on the property. The congregation used its facilities for worship services, Sunday school, bible study, weddings, funerals, choir practice, committee meetings, and social events. The church also made its facilities available as a polling place and meeting place for other community groups, and allowed commuters to use its parking lot. In 1992, the church remodeled its church building and expanded its parking lot.
In January of 1993, the church began allowing a public transit company to use two of its parking spaces as handicapped parking for commuters, and allowed the company to place a bus shelter, bike rack, and a “park and ride” sign on the property.
In 1999, the estate of the man who transferred the property to the church in 1954 filed a lawsuit asking the court to rule that the church had violated the conditions of the 1954 deed and therefore the estate was lawful owner of the property. The estate also asked the court to declare the church to be a trespasser, and to evict it from the property. The estate pointed to the following facts as proof that the church had violated the conditions in the deed: (1) two handicapped parking stalls for use by public transportation passengers; (2) a bus shelter; (3) a bike rack; (4) a park and ride sign; (5) pedestrian and vehicular ingress and egress to a park and ride lot; and (6) use of the church building by community groups. The estate did not contend that these uses diminished the church’s use of the property for church purposes. Rather, it asserted that the nature of these uses constituted substantial breaches of the deed restrictions. The church argued that the first amendment guaranty of religious freedom prevented enforcement of the deed restrictions by a civil court, and, that its “violations” of the deed restrictions were too insignificant to cause a reversion of title back to the estate.
The Court’s Ruling
The court began by rejecting the church’s argument that the first amendment prohibits the civil courts from enforcing deed restrictions pertaining to “church use.” It quoted from a 1969 decision of the United States Supreme Court: “Civil courts do not inhibit free exercise of religion merely by opening their doors to disputes involving church property. And there are neutral principles of law, developed for use in all property disputes, which can be applied without establishing churches to which property is awarded. But first amendment values are plainly jeopardized when church property litigation is made to turn on the resolution by civil courts of controversies over religious doctrine and practice. If civil courts undertake to resolve such controversies in order to adjudicate the property dispute, the hazards are ever present of inhibiting the free development of religious doctrine and of implicating secular interests in matters of purely ecclesiastical concern.” Presbyterian Church in the United States of America v. Mary Elizabeth Blue Hull Memorial Presbyterian Church, 393 U.S. 440 (1969).
The court then addressed the central issue of the case-whether the church’s uses of the property in the 1990s amounted to a violation of the conditions in the 1954 deed so as to vest title in the estate of the previous owner. It began by laying down the following ground rules: (1) Words in a deed restricting the use of property are construed strictly against the grantor and those claiming the benefit of the restriction. (2) A forfeiture clause in a deed must always be strictly enforced against the grantor, and nothing will be held to cause a forfeiture unless it plainly appears to be such. (3) In order to justify a forfeiture for the violation of the condition, the violation must be willful and substantial and not merely technical.
The court then quoted the following language in the deed: “Should no church building be placed on said land within three years from the date hereof, or should one be abandoned, or be unused for church purposes for a period of one year at any time the land hereby conveyed shall revert to the grantor. The said land shall in no wise be used for other than church purposes and the grantee shall not convey the said land to any person to be used for any other purpose, and if it should attempt so to do the same shall immediately revert to the grantor.”
The court noted that this language in the deed created a “fee on condition subsequent.” The term “condition subsequent” refers to “that part of the language of a conveyance, by virtue of which upon the occurrence of a stated event the conveyor, or his successor in interest, has the power to terminate the interest which has been created subject to the condition subsequent, but which will continue until this power is exercised. Violations of a condition subsequent must be willful and substantial in order to justify a forfeiture.”
The estate argued that the church’s various uses of the property constitute uses “for other than church purposes” requiring a forfeiture. The court disagreed:
Whether the challenged uses of the property by [the church] are for valid ‘church purposes’ is a question we need not decide. But assuming, without deciding, that the challenged uses are not for ‘church purposes’, the issue then is whether the nature and frequency of the challenged uses constitute substantial, and not merely technical, breaches of the deed that work a forfeiture. We hold that they do not. Here, the nature of the uses of the property … include two handicapped parking stalls, a bus shelter, a bike rack, a park and ride sign, pedestrian and vehicular ingress and egress to a park and ride lot, and use of the church building by community groups. [The estate] does not contend that these uses diminish [the church’s] use of the property for church purposes. Rather, it claims that the nature of these uses constitute substantial breaches of the deed restriction. We reject this claim because where the nature of [the church’s] uses of the property are so intertwined with its public welfare activities, it cannot be said that they constitute substantial breaches of the deed restrictions.
The court quoted with approval from a 1970 decision of the United States Supreme Court:
Any assumption that a church building itself is used for exclusively religious activities, however, rests on a simplistic view of ordinary church operations …. [T]he public welfare activities and the sectarian activities of religious institutions are intertwined. Often a particular church will use the same personnel, facilities and source of funds to carry out both its secular and religious activities. Thus, the same people who gather in church facilities for religious worship and study may return to these facilities to participate in Boy Scout activities, to promote antipoverty causes, to discuss public issues, or to listen to chamber music. Accordingly, the funds used to maintain the facilities as a place for religious worship and study also maintain them as a place for secular activities beneficial to the community as a whole. Walz v. Tax Commission, 397 U.S. 664 (1970).
The Washington court found this language “equally applicable in assessing whether the uses at issue here constitute substantial breaches of the deed restrictions.” It concluded,
We cannot say that two handicapped parking stalls … are so divorced from the public welfare activities that the church maintains as part of its church purposes so as to substantially breach the deed restrictions. Likewise, we cannot agree … that the activities associated with commuter-support functions (a bus shelter, a bike rack, a park and ride sign, and pedestrian and vehicular ingress and egress to a park and ride lot) are so divorced from the public welfare activities that the church asserts are part of its church purposes as to constitute breaches of the deed restrictions. Finally, there is nothing in the record before us that demonstrates that the use of the property by community groups is substantially at odds with the use of the property for church purposes …. [The estate] also challenges the frequency of the challenged uses. But that argument does not support a conclusion that there were substantial breaches of the restrictions. The record shows that a few of the community groups meet four times a month while the majority of the groups meet only once a month. As to the frequency of the use of the Marshall property for commuting purposes, we presume it is used for limited hours twice a day for five days a week. None of these periodic uses are so great in frequency as to substantially violate the deed restrictions. In sum [the estate] fails to show that either the nature or the frequency of the challenged uses constitute substantial breaches that work a forfeiture.
Application. Many churches received title to their property by means of a deed containing a similar restriction. It is imperative for church leaders to be aware if such a condition exists. This can be easily determined by inspecting the deed to the church property. While the language of these conditional deeds varies, it is common to condition a church’s ownership of deeded property on continuous use of the property for religious purposes. Such a condition would mean that a church could not sell its property to a buyer who did not plan on using the property for religious purposes. Some of these conditional deeds are even more restrictive, conditioning a church’s ownership on continued use of the property as a church of a specified religious denomination. Under such a clause, a church could not sell its property to a buyer other than another church of the same denomination. In some cases a deed conditions a church’s ownership on continued use of the property for religious purposes by the congregation that purchased the property. This is even more restrictive, for a church could not sell the property to anyone without triggering a reversion in favor of the previous owner. Obviously, this is a matter that must be taken very seriously.
(1) Check the deed or deeds to your church property to determine if any conditions exist. If they do, it is possible in some cases to have them “released” by the previous owner (if he or she is willing to do so). Often this is done by having the previous owner execute a quitclaim deed. If the previous owner is no longer living (a fairly common circumstance) then the condition can be released only by all of the legal heirs of the deceased owner. This can be a very cumbersome process.
(2) Be sure your church complies with any deed restrictions to the extent you are unsuccessful in getting them removed.
(3) When acquiring property through purchase or gift, discourage the property owner from encumbering the title with any restrictions that could later create substantial inconvenience for the church.
One final point. This case demonstrates the negative attitude the courts have toward restrictions in deeds. While the court recognized that the deed contained restrictions, it concluded that the church’s “breaches” of those restrictions were immaterial. This language should not be viewed as a license to engage in substantial violations of deed restrictions, but it does support some deviations in the use of church property within the larger context of the church’s religious mission. Topp v. Trinity Lutheran Church, 2001 WL 950265 (Wash. App. 2001).
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