Recent Developments in Church Property Rulings

Maryland’s highest court ruled that a local congregation that voted to disaffiliate from a national church after more than a century of association was entitled to retain its property.

Church Law and Tax1999-01-01

Church Property

Key point. A church affiliated with a hierarchical denomination may be able to retain its property if it disaffiliates from the parent denomination, despite a provision to the contrary in denominational bylaws.

Maryland’s highest court ruled that a local congregation that voted to disaffiliate from a national church after more than a century of association was entitled to retain its property. A church affiliated with the African Methodist Episcopal (AME) Church voted in 1993 to disaffiliate from the national church as a result of what it perceived to be burdensome financial demands and a decline in moral conditions within the denomination. Both the dissident congregation and the national church claimed ownership of the church’s property, and a court was asked to determine the rights of the parties. A trial court ruled in favor of the local congregation, and the national church appealed. The Maryland Court of Appeals (the highest state court) agreed. It cautioned, however, that a national church may retain control of the property of a dissident congregation in any or more of the following three ways:

1. requiring the local churches to place reverter clauses in the deeds to [their] property; 2. providing in their constitutions or other authoritative sources for the reversion of local church property upon the withdrawal by a local congregation, with an implied consent by the local church to the reversion provision; 3. obtaining from the [legislature] an Act providing for that result. Moreover, we have recognized that a Maryland religious corporation … may adopt a presbyterial or episcopal polity and, thus, may provide for the holding of the local church property subject to the provisions of the constitution, charter, or bylaws of the denomination and the action of the authoritative agencies of such denomination.

The court concluded that none of these exceptions applied in this case. While conceding that the AME Church was hierarchical in structure, it concluded that the national church’s constitution “was silent on the issue of the ownership and control of local church property, although it recommended deeding such property to trustees to be held in trust for the church and the insertion of deeds of provisions providing for the reversion of the property … in the event of the church’s becoming extinct or failing to remain doctrinally compatible.” As a result, it was “plain that it was never contemplated that the property of the local churches should be subject to the control” of the national church. Board of Incorporators v. Mt. Olive African Methodist Episcopal Church, 703 A.2d 194 (Md. 1997). [State Court Rulings Regarding Church Property Disputes]

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