By Richard R. Hammar, J.D., LL.M., CPA
© Copyright 1993, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m21 c0393
Key point: The deeds to some
church property specify that the church shall remain in possession
so long as the property is used for church purposes, and that if
the property ever ceases to be so used it shall revert to the
person who conveyed the property to the church. The effect of such
deeds can come as an unpleasant surprise to church leaders.
Can a church lose its property if it ceases
to use it for religious purposes? That was the issue before the
Supreme Judicial Court of Massachusetts in a recent case. A church
obtained its property in 1941 by a quitclaim deed that contained
the following clause: "It is further understood and agreed that
said premises are to be held by said [church] as a parsonage for
the minister of said church as a parish house and if said [church]
should ever cease to carry on the adjoining property as a church
for its own use or if said premises shall ever cease to be used by
said church as a parsonage or parish house or for other religious
purposes, then said premises shall revert to me [or my heirs]." The
person who deeded the property to the church died in 1962.
Beginning in 1978, the church ceased using the premises as a
parsonage and except for one room no part of the premises were used
by the church for religious purposes. Accordingly, the court ruled
that the property was now owned by the heirs of the previous owner.
What is the significance of this interesting case? 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. Our
recommendation--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. Howden v. Crombie Street
Congregational Church, 590 N.E.2d 687 (Mass. 1992).