Legal Tools to Control Property Ownership

Transfer of Property with Conditions

Controlling a property’s use is typically the goal when attaching conditions—such as a trust clause—to legal documents. For example, a land donor—called a “grantor”—may gift five acres to a local ministry with the condition that it builds a new church at the site. The condition could specify that if the ministry fails to build within five years, ownership of the land would revert to the donor. 

In the case of a denomination or multi-site church which donates property for the benefit of a local church, the main controlling body is the grantor, and may want to ensure that each locally-controlled property stays within the denomination. A legal document would specify that control of the property reverts to the district or denominational headquarters should a local church body decide to withdraw [or dissociate] from the district or denomination.

How it Works: Three Options

A property owner can attach conditions to the transfer of property. Controlling interests vary—some offering stronger protection against legal challenges than others. 

1. Revisionary interest/Possibility of reverter. While there are many ways to control ownership, a reversionary interest may be the best way for ministries to maintain control of property. A reversionary interest includes a “condition”— a provision on a deed stating the property is transferred on condition that the property is used, or not used, for a specific purpose. Ministries might see a provision stating: “for so long as the property is used for the purpose of operating a [insert denomination] church.” This provision enables the grantor to reclaim property should the ministry fail to meet the conditions. It is the most favorable provision for a grantor.

2. Right of re-entry/Power of termination. A right of re-entry allows the grantor to re-enter and take the property when a condition is broken. In this situation, the grantor may likely need to go to court to reclaim its interest in the property. This type of interest is not as favorable to a grantor as the reversionary interest.

3. Repurchase. This option creates opportunity to repurchase the land for an agreed upon amount. This option simply gives the grantor an option to repurchase land should the recipient decide to move or cease operations. 

Know Your State’s Laws   

Whichever type of interest a ministry creates, it is essential that the deed’s language is clearly written so everyone understands their rights.  Although laws vary by state, some property concepts, such as reversionary interests, are generally applicable. Ministry leaders should have their current property deeds, and any future deeds, reviewed by a local attorney who can properly advise ministry leaders about the interests and limitations in the transferred property.

Below is a case law example where a reversionary interest affected a ministry:

• In a 1993 Georgia case, a property owner transferred property to a church that included a reverter clause. The restriction provided that the church would own the property “only so long as said lot is used for church purposes.” When the church decided to move to another location, the property owner claimed the reverter clause was triggered and the property should be returned to the property owner. The Supreme Court of Georgia determined that the reverter clause was enforceable.

Details Matter

Whether you have been gifted property or seek to maintain control of ministry-owned property, it’s important to work with your local attorney. He or she can ensure your legal documents have clear provisions for how your land is controlled and who maintains ownership if certain conditions apply.