NY Church Property Law Legal

Court validates law requiring notice about sale, mortgage, or lease of church property.

Key point. A New York law requiring certain churches to notify the state attorney general prior to the sale, mortgage, or lease of their property is not unconstitutional.

A New York court upheld the validity of a state law imposing requirements on the sale, mortgage, or lease of church property .

New York law specifies that "a religious corporation shall not sell, mortgage or lease for a term exceeding five years any of its real property without applying for and obtaining leave of the court …." New York law also requires several "congregational" (and some hierarchical) churches to notify the state attorney general prior to the sale, mortgage, or lease of their property.

A hierarchical church obtained court approval of the sale of some of its property in 1987, although it failed to comply with the requirement that it notify the state attorney general of its intent to sell its property. The church later modified its sales contract on two occasions, but did not seek court approval in either case on the basis of its assumption that such approval was not necessary. A member of the church later challenged the validity of these actions on the ground that they violated the provisions summarized above. The church argued that court approval is not required unless the property sold by a church will be used for religious purposes, that it was not required to obtain court approval of a modification of a sales contract, and that the state law provision requiring notice to the attorney general prior to the sale, mortgage or lease of church property was unconstitutional.

A state court disagreed. First, it refused to limit the state law provisions to sales of church property in which the property would continue to be used for religious purposes. The court noted that had the legislature intended for the statute to be so construed it could easily have said so. Second, the court concluded that the state law provisions applied to the modification of real estate contracts since a modification is actually "a new agreement between the parties." Finally, the court rejected the church's claim that the state law provision requiring notice to the attorney general prior to the sale, mortgage or lease of church property was unconstitutional. The church argued that this requirement not only violated the first amendment's ban on the establishment of religion but also violated the first amendment's guaranty of religious freedom by involving the government in the internal decisions of churches.

In rejecting the church's "establishment clause" argument, the court applied the United States Supreme Court's three—part Lemon test for determining whether or not the New York law constituted an impermissible establishment of religion. Under this test, first announced in a 1971 decision (Lemon v. Kurtzman), a law or government practice challenged as an establishment of religion will be valid only if it satisfies the following three conditions—a secular purpose, a primary effect that neither advances nor inhibits religion, and no excessive entanglement between church and state.

The court concluded that all of these tests were met. First, the New York law had a secular purpose—"to insure that such [sales are] in the best interest of the corporation and its members and that the proceeds are properly disbursed." The court noted that the New York law was prompted by "several instances of questionable practices resulting in lawsuits to enjoin and set aside transfers of religious property within congregational—type religious churches." Second, the notice requirement did "nothing to convey any message whatsoever that could be construed to advance or inhibit any religion or religious belief." Third, the notice requirement did not result in an excessive entanglement between church and state since it was a mere "routine regulatory interaction" involving "no inquiries into religious doctrine … no detailed monitoring and close administrative contact between secular and religious bodies."

The church argued that the first amendment's ban on the establishment of religion has been interpreted by the Supreme Court to prohibit any law that discriminates among religious groups. It claimed that this was precisely what the New York notice requirement did by applying only to congregational churches and some hierarchical churches. The church pointed out that it was hierarchical in structure, but was not specifically exempted from the notice requirement while many other hierarchical churches were.

The court acknowledged that the New York law discriminated among religions by only requiring "congregational" churches, and some hierarchical churches, to notify the attorney general while exempting most hierarchical churches. However, it concluded that this discriminatory treatment did not violate the establishment clause since it was based on a compelling government interest ("protecting members of religious corporations by safeguarding the potentially substantial proceeds from sales of property, and ensuring that the proceeds are properly disbursed").

The court noted that the hierarchical churches that are exempted from the notice requirement are required to obtain the consent of their top executive officer before seeking court approval. It concluded that the notice requirement applied to those churches, whether congregational or hierarchical, whose structure "does not assure that its members have an opportunity to review the sale of real property." This conclusion is questionable and vulnerable to reversal on appeal, for the court was attempting (without a shred of supporting evidence) to distinguish between churches on the basis of whether their membership has an opportunity to review property transactions.

Finally, the court concluded that the notice requirement did not violate the first amendment guaranty of religious freedom. It noted that a violation of this guaranty requires proof that a law or government practice "burdens the adherent's practice of his or her religion by pressuring him or her to commit an act forbidden by the religion or by preventing him or her from engaging in conduct or having a religious experience which faith mandates." Such was not the case here, the court concluded. It further noted that "any inquiry by the attorney general involves only the terms of a real estate transaction; it involves no inquiry into religious beliefs nor does it involve the regulation or prohibition of conduct undertaken for religious reasons." Greek Orthodox Archdiocese v. Abrams, 618 N.Y.S.2d 504 (Sup. 1994).

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