Part III: Church Property Litigation

In Part I of this series, we discussed church polity and governance as a framework for understanding legal issues associated with church litigation. In Part II, we discussed how the governing documents of a church are often critical to both creating and resolving legal disputes. In this installment, we will discuss church litigation resulting from church property disputes and how to prevent and prepare for such controversies.

A Repetitive Problem

Each time there is a rift in a major denomination, there is typically a wave of litigation hashing out competing claims to ownership of church property. Throughout the 20th century, successive waves of exits from the Presbyterian Church USA resulted in a handful breakaway denominations. From the 1980s into the early 2000s, a slew of dioceses and parishes separated from the Episcopal Church USA over doctrinal disagreements. In recent years, the United Methodist Church has split on theological issues, resulting in hundreds of congregations leaving that denomination.

Each of these splits was followed by a wave of court cases across several states as local congregations, and other church bodies fought for control over houses of worship and other church property. However, church property litigation does not always arise out of a denominational breakup, but also can come about from local disputes in small churches.

Polity vs. Paperwork: How Courts Decide Church Property Disputes

In some countries, civil courts can resolve church property disputes by deciding which group is more faithful to the doctrinal teachings the church was founded upon. However, this is not possible in the U.S. because the First Amendment of our Constitution forbids courts from favoring one religious group over another or from deciding issues of religious doctrine or practice.

American courts have developed different approaches to resolving church property disputes in a way that does not require judges to decide questions of religious teaching or practice. One approach that some states have adopted is called the “polity approach.” Under this approach, a court looks to whether the denominational structure of the relevant church is hierarchical. If it is, the court will defer to and enforce the decisions of the authorities of the denomination, e.g., bishop, presbytery, synod, assembly, etc.

Another approach adopted by several jurisdictions is known as the “neutral principles” approach. Under this approach, a court will look at all the relevant governing documents (deeds, bylaws, constitutions, etc.) and will apply neutral principles of law to determine whether the documents create a trust in favor of the denomination. If they do, the court will enforce the trust and award the property to the denomination. But if the elements of a trust are not present and there is no other valid property interest that can be enforced, the local congregation will keep the property.

Each of these approaches has its pros and cons. In general, states applying the polity approach tend to see more litigation outcomes in favor of denominations claiming rights in church property while states applying the neutral principles approach tend to favor the rights of local congregations. Under either approach, a church’s polity and its governing documents are key to resolving the dispute.

Proactive Prevention of Property Problems

Church property litigation can be messy and expensive. It often makes an already heated situation worse and results in greater disunity in a church or denomination. For these reasons, disputes about ownership of church property are best resolved out of court. This could be by Christian mediation, or even by following the Scriptural principle that it is better to be wronged than have unseemly fights between believers. Preventing problems is even better.

How can church property disputes be prevented? From the perspective of a local congregation seeking to preserve its property from takeover by a denomination, church leaders should consider the relevant law of their state and how courts in their state resolve church property disputes. In a polity approach state, a congregation may need to consider ways to avoid the denomination’s authority if a split is expected. In a neutral principles state, a church may need to consider whether the governing documents create a trust in favor of the denomination and how those documents might be amended.

From the perspective of a denominational body seeking to keep historic church buildings and valuable property in its fold, the issues are the same but with opposite concerns. In polity approach states, denominations want to ensure that their decisions and policies about church property are clear. In neutral principles jurisdictions, a denomination will want to add clear and enforceable language in deeds, bylaws, and other relevant documents that create trusts over the property in favor of the denomination.

By paying careful attention to the applicable law and the relevant documents, parties can understand their rights and protect their interests in the church property while also avoiding costly court battles.

Stay Tuned

In Part IV, we will address preventing liability for defamation and other claims resulting from church discipline. In Part V, we will discuss constitutional principles that restrict courts from being able to decide certain church disputes. And finally, in Part VI, we will discuss conciliation agreements and other practical steps that churches and leaders can take to prevent conflicts and keep church disputes from spilling over into courts.

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Featured Image by Rebecca Sidebotham.