06.2 - Local Church Property and the Trust Clause
by Scott Selman
For the Lord is good; his steadfast love endures forever, and his faithfulness to all generations.
Psalms 100:5 (NRSV)
Have you ever considered who owns the local church? This question is frequently asked when church property is acquired or sold, or during the financing and construction of new facilities. The answer to this important question is based on the polity and connectional structure of The United Methodist Church.
Title to local church property is not held by the denomination, or the General Conference of The United Methodist Church, but rests with incorporated local churches, or in the case of unincorporated local churches, with boards of trustees established for the purpose of holding and administering local church property. According to ¶ 2501 in The Book of Discipline of The United Methodist Church, title to all local church property – real and personal, tangible and intangible – is held in trust for The United Methodist Church and is subject to the provisions of the Book of Discipline.
The Book of Discipline clearly indicates that all local church property, not just real estate, is held in trust for The United Methodist Church. From a practical perspective, “held in trust” means the denomination has a right to succeed to the title of local church property. From a spiritual perspective, “held in trust” refers to a sacred trust between today’s church members and future generations of The United Methodist Church.
Specifically, ¶2503 in the Book of Discipline requires that all written instruments conveying property held or hereafter acquired for use as a place of worship or other church activities, except in conveyances that require property ownership to revert to the grantor if and when its use as a place of worship terminates, shall contain the following trust clause:
In trust, that said premises shall be used, kept, and maintained as a place of divine worship of the United Methodist ministry and members of The United Methodist Church; subject to the Discipline, usage, and ministerial appointments of said Church as from time to time authorized and declared by the General Conference and by the annual conference within whose bounds the said premises are situated. This provision is solely for the benefit of the grantee, and the grantor reserves no right or interest in said premises.
A similar trust clause is required for written conveyances of property to be used as a parsonage or for other church owned property.
Sometimes, the grantor of property will be another United Methodist entity, such as the annual conference or a district. In these cases, the trust clause should read as follows:
In trust, that said premises shall be held, kept, maintained, and disposed of for the benefit of The United Methodist Church and subject to the usages and the Discipline of The United Methodist Church.
In this way, the annual conference or a district retains a right or interest in the property and does not waive the benefit of the trust clause.
What happens if there is no trust clause in the written instrument of conveyance? The absence of the trust clause does not change the right or interest of the denomination in succeeding to the title of local church property or the obligation of the local church to hold the property in trust for the denomination. When the required trust clause is not included in the instrument of conveyance, there is an implied trust clause imposed by ¶2503.6 in the Book of Discipline. Secular courts have upheld the right of The United Methodist Church to succeed to the title of local church property.
The trust clause is required by The United Methodist Church. Title to local church property may be held in the name of the local church (as a corporation) or its board of trustees, but local church property is always held in trust for the denomination, with or without a trust clause.