Church Property Ownership

A denominational agency was entitled to the property of a local church following a vote to disaffiliate itself from the denomination.

Key point 7-03.3. Most courts apply the "neutral principles of law" rule in resolving disputes over the ownership and control of property in "hierarchical" churches. Under this rule, the civil courts apply neutral principles of law, involving no inquiry into church doctrine, in resolving church property disputes. Generally, this means applying neutral legal principles to non-doctrinal language in any one or more of the following documents: (1) deeds to church property; (2) a church's corporate charter; (3) a state law addressing the resolution of church property disputes; (4) church bylaws; or (5) a parent denomination's bylaws.

A New York court ruled that a denominational agency was entitled to the property of a local church following a vote to disaffiliate itself from the denomination. A church which was originally incorporated as a Methodist Episcopal Church eventually became a member of the United Methodist Church (UMC) after a series of mergers. The church voted to withdraw from the UMC, and a denominational agency (the "regional church") voted to dismiss the church as a member of the UMC. The regional church asked a civil court to declare that it was the legal owner of the church's property. The court noted that the civil courts "may decide matters involving property disputes between local churches and the general church provided that resolution of the property dispute is possible by application of neutral principles of law." The focus in resolving such disputes is "on the language of the deeds, the terms of the local church charter, the state statutes governing the holding of church property, and the provisions in the constitution of the general church concerning the ownership and control of church property."

The court noted that nothing in the deeds, the certificate of incorporation of the church or state statutes governing the holding of church property addressed the property rights of a member of the UMC. However, it noted that "the Book of Discipline of the UMC, which binds plaintiff, states that all property deeded to a UMC church or its predecessor is required to be held in trust for the UMC or its predecessor." It concluded that "an implied trust is created where, as here, the property is conveyed to a local church of the UMC; the name, customs and polity of the UMC or any predecessor to the UMC are used in such a way that the local church is known to the community as part of such denomination; and the congregation of the local church accepts the ordained ministers appointed by a bishop of the UMC or any predecessor to the UMC. We therefore conclude that the court properly determined that the church held its property in an implied trust for the UMC." North Central New York Annual Conference v. Felker, 816 N.Y.S.2d 775 (N.Y.A.D. 2006).

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