Church Property – Part 1

A North Carolina court ruled that a local church, rather than a national denomination, was the legal owner of its property.

Church Law and Tax2000-05-01

Church Property

Internal Property Dispute Resolution Procedures

Key point 7-04. Churches and denominational agencies can avoid church property disputes by adopting appropriate nondoctrinal language in deeds, trusts, local church bylaws, or denominational bylaws.

A North Carolina court ruled that a local church, rather than a national denomination, was the legal owner of its property. A local church disaffiliated from a parent denomination (the “national church”) in 1994. The national church asked a court to determine which entity was the legal owner of the local church’s property. The court ruled that the property belonged to the local church, noting that while the denomination was “connectional” in nature, it was not connectional with respect to the local churches’ property. The national church appealed, citing the following provision in the denomination’s “Discipline”: “It shall be specified in each deed to church property that it shall be for the use and benefit of the ministry and membership who are worshipping according to the customs and usages of the [denomination].” The deeds by which the local church in this case acquired its property did not make these required specifications. They contain no reference to the customs and usages of the denomination. The court concluded, “Under the language of the Discipline, it seems clear that local church property that is recorded as specified in the Discipline belongs to the denomination, and that a local church seeking to secede from the denomination could not keep such property. Here, though, the deeds were not recorded as set out in the Discipline.”

The court also noted that the Discipline required local churches to receive the approval of the bishop or ruling elder before securing any warranty deeds. This was not done by the local church in this case. To the contrary, the denomination clearly expressed its disapproval of the church’s plan to acquire the property now in dispute, but the church still did so, using its own money. The court concluded, “We find that it would be inequitable, if not unconstitutional, for a court of this state to enforce the Discipline against the church when the denomination made no effort to enforce it at the time of any violations.”

Application. This case illustrates three important points.

1. It is possible for a denomination to be connectional or hierarchical in most respects, and “congregational” regarding local church property. “Congregational” in this context means that local churches own their property free from any interference or control by the denomination.

2. The court conceded that the Discipline required that deeds to local church property contain a provision recognizing that the property would be held in trust for the benefit of the national church. However, the court concluded that the local church nullified the effect of the Discipline by not incorporating such a clause in its deeds. Many denominations have similar provisions in the governing documents of regional or national denominational bodies, and they should understand that these provisions in themselves may be of little or no value if they are ignored by a local congregation.

3. The court noted that the national church failed to enforce other provisions in the Discipline regarding deeds, and concluded that it would be entirely inappropriate for it to do so if the national church itself did not. This illustrates the legal relevance of a denominational agency ignoring certain provisions in its own organizational documents. Such neglect may weaken the agency’s later attempts to enforce other provisions against a dissident local congregation. Fire Baptized Holiness Church of God in the Americas v. McSwain, 518 S.E.2d 558 (N.C. App. 1999).

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