3.16 Churches And Religious Associations

3.16.1

Organization

Generally, churches and religious associations may assume two different forms of organizational structures:

·   Congregational - Typically, an independent organization governed solely within itself by a majority of its members or by such other local entities as it may have instituted for the purpose of ecclesiastical government. In congregational churches, there may be supervisory bodies or judicatories, but they have no control over the property or real estate of the local churches;  or,

·   Hierarchical - Typically, one organized as a body with another church known as the parent church, both having similar faith and doctrine and the same constitutional or ecclesiastical laws. In such denominations, title to real estate, though vested in the local entity, remains subject to the control of a supervisory body.

3.16.2

Incorporation

Churches and religious associations may exist without being incorporated. However, incorporation may be required by the church’s charter or parent entity for the church to hold title to land.

A religious corporation or association and the church whose doctrine it represents are two different entities that may coexist independently. The objective of one is materialistic while the other deals exclusively with faith and matters of the spirit.

The right to incorporate has to conform with the corporation statute as to the purpose of the proposed incorporation as well as with the general laws of the state.

Incorporation of churches and religious associations may take place under general laws or under express statutory provisions.

Incorporation under the general nonprofit corporation statutes.

Texas Bus. Organizations Code, Chapter 22 provides for incorporation of nonprofit corporations.  See Sections 22.222 and 22.234 for section peculiar to religious organizations.

3.16.3

Power To Acquire And Hold Title

In general, but with cases of certain statutory limitations, religious corporations have the capacity to acquire and hold real property for purposes consistent with their creation and existence.

Statutory provisions sometimes limit or restrict this capacity by imposing restrictions on:


·   The nature, quantity, or purpose of the land to be acquired.

·   The specific organizations permitted to incorporate.

·   The areas of capital value or annual productivity.

·   The power and capacity to operate.

This section is not applicable in Texas.

3.16.4

Power To Encumber and Convey

·  
Statutory

·  

Inner Structure

In addition to compliance with statutory provisions, it is always necessary to ascertain fully those acts which are permissible, those which are prohibited, and which others, if any, require authority from a supervisory body.

3.16.5

Power Determination

The determination of the church powers to hold, encumber or convey real estate requires the careful examination of all the documents under which the church operates (constitution, charter, rules, discipline, bylaws, etc.) Copies of all these documents must be requested and examined, in conjunction with the related statutory provisions, for the purpose of determining the church power or capacity to execute real estate transactions.

For your convenience, we have prepared a chart showing a large number of US churches together with their national headquarters street addresses and websites.  This chart is updated infrequently and is not guaranteed to be completely accurate at all times.  We recommend that you contact the listed church organizations directly.

3.16.6

Unincorporated Religious Associations

Some courts maintain the viewpoint that an unincorporated group is not an entity; hence, a deed to such a group in its collective name is a nullity.

Frequently, unincorporated religious associations attempt to take title in the name of the church alone. With few exceptions, such attempts will not vest title in the church since the church as an unincorporated religious association is generally not a legal entity in which legal title can vest. 

As a solution to this situation, title to real estate property could be held by some of its members, in trust, for the use and benefit of the unincorporated religious association. 

However, it should be noted that in some jurisdictions, it is permissible for unincorporated associations to acquire land interests in the group name without any mention of trustees as the mediation of ownership.

Company policy: In Texas, we require that title be held by individuals in a representative capacity.  An example is A, B and C, Trustees of XYZ Church.  If Church documents provide for a different vesting, call a Texas underwriter.

3.16.7

Corporation Sole

  A corporation sole is one consisting of one person only, such as a bishop, chief priest, presiding elder, or other presiding officer of a religious denomination or church and their successors. The Roman Catholic Church and the Church of Jesus Christ of Latter-Day Saints (Mormons) are corporations sole.  Rarely, other churches have attempted to be Corporations Sole.  Their founding documents must be carefully reviewed before allowing a transaction from these other churches.

3.16.8

Congregational Problems That May Affect The Pow

The alienation or encumbrance of property held by the trustees of an incorporated religious association may sometimes be affected by problems that afflict the congregation.

Among such problems may be:

·  Schisms

·  Divisions

·  Secessions

·  Extinguishments

From the title insurance point of view, no attempt should be made either to get involved in any church dispute or to take side with any church faction.

The same principle is applicable to the disposition of property after the extinguishment or dissolution of the congregation.