Sooner or later, every church deals with the purchase or sale of real estate.
As you might expect, this process is a little different than buying or selling a home. Much of this difference results from the way the First Amendment and Virginia’s tradition of religious liberty shapes courts’ interactions with churches.

The First Amendment and Religious Freedom

The U.S. Constitution guarantees religious freedom which prevents courts in Virginia from interfering with issues of religious doctrine or faith.
While Virginia courts are not closed to churches, they must be cautious when resolving church disputes so they they do not pronounce on matters of church doctrine or religious faith.

A relatively common church dispute that may come before a Virginia court is whether or not to sell the property on which a church building sits. Some churches outgrow their buildings, other churches dissolve and want to dispose of church property and in some cases a church split requires a determination regarding which faction should receive the church property. How does a court resolve property disputes without violating the First Amendment? The first step is determining whether a church is considered Hierarchical or Congregational, then deferring to the appropriate authority for each.

Is Your Church Hierarchical or Congregational?

In order for a court to decide who has the authority to sell or purchase property on behalf of a church, they have to determine if that church is a hierarchical or congregational church.
A hierarchical church is one with an existing authority structure outside of the local church which is tasked with, among other things, making property decisions. Virginia Courts have held, in some circumstances, that Catholic and Episcopal churches fall within this tradition and therefore defer to the decision-making authority of their hierarchical structure. This is apparent in cases where the Virginia courts have held that the Episcopal church structure has an interest in the property of local churches, which has resulted in the displacement of some of Virginia’s Episcopal congregations. The courts cannot pronounce on the theological disputes that lead a congregation to choose to separate from its hierarchical organization, but after the separation, courts have held that the church property does not follow the congregation and remains within the hierarchical organization.

The other possibility is that a church is a congregational church, or a church without hierarchical ties. In a congregational church, the court first looks to the church constitution, bylaws and other governing documents which may have procedures set out regarding property. If a church has no bylaws or constitution, then the church is a pure democracy and should hold a congregational meeting and vote to affirm disposal of the property. These meetings, if properly conducted, are not subject to judicial review. A properly conducted meeting includes the traditional components of the democratic process: notice to the congregation, open discussion at the meeting, and a secure voting process.

While local Catholic and Episcopalian churches have been deemed hierarchical, in Virginia it is sometimes unclear exactly when a local church has enough ties to a larger organization or denomination to qualify as a hierarchical church.

Hierarchical churches have several distinct features:

• A hierarchical church is part of a larger denominational body of churches that has a distinct structure of authority.
• Hierarchical churches often establish rules for discipline and internal government, and frequently have distinct bodies of ecclesiastical law.
• Because of the First Amendment, the decisions of tribunals within hierarchical churches on matters of faith are not subject to judicial review.
• A local hierarchical church might have a constitution and bylaws, but these will conform to the denominational constitution and bylaws.

Congregational churches have several distinct features:

• A congregational church is not part of a larger authority structure, but exists distinct from external authority.
• Congregational churches function like a democracy, governed by the majority.
• They may establish constitutions and bylaws through this democratic process.
• In the absence of bylaws and a constitution, the courts treat congregational churches like pure democracies and puts decisions to a congregational vote.

The disputes over church property highlight the importance of understanding your church governance structure. If your church is part of a hierarchical structure, it is important to understand how that structure influences the ability of your congregation to act on its own. If your church is a congregational church, having an effective constitution and an up-to-date set of bylaws is critical. If you have questions about church governance, an attorney experienced in non profit law can help you think strategically. It is important to periodically review your church governance structure with an attorney experienced in this area and adjust as needed to avoid difficult decisions and potential court rulings.

Disclaimer:
This blog post generally describes some aspects of the church law and the First Amendment and is not intended as legal advice. Because every situation is unique, you should consult a qualified attorney to receive specific, complete advice on the legal status of your church.

This blog was written by Josiah Lindstrom, Law Clerk