Church Manual Section 1 Owning Property 1 Owning property 2

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					Church Manual

Section 1

Owning Property

1. Owning property

2. Types of Legal Entity 2.1 Individual persons 2.2 Trustees

3. The Trust Deed

4. The Corporations

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1. Owning Property
In our Baptist understanding of Biblical principles, a church is a gathered community of believers. It can meet in a home, in hired premises or in specially acquired accommodation. In the eyes of the law such a church has no “legal entity” that can be pinned down or sued for breaches of the law. It is simply a club or society which people join or leave at will. If a church wants to acquire and own property it is assuming responsibilities which demand such legal entity. For example such responsibility occurs if a slate falls off a roof and injures a passer-by. The legal entity can be sued for damages. Therefore there must be a precisely identifiable entity that takes such responsibility for the property owned by a church.

2. Types of Legal Entity
The law recognises two types of legal entity: 2. 1 Individual Persons

These can be clearly identified. Church property can be held by an individual or by a group of individuals. This is VERY UNWISE because the person or persons concerned: (i) (ii) (iii) are the legal owners of the property; can sell the property. They have the legal right to do so. tend to think of the property as their own and if in membership develop a 'proprietary' interest and become bossy. However even if they do not, others tend to look around to see what they think and want! Inevitably they are a controlling factor. can be in dispute with the members, or can become backslidden or uninterested, and in such circumstances can make things impossible. die and the property becomes part of their estate and subject to their last will and testament. Trustees

(iv) (v)

2. 2

Trustees are an identifiable legal entity who under a Deed of Trust own or hold the property on behalf of the church. Trustees can be either: (i) Named individuals

Such Individuals must be: of sound mind, resident within the jurisdiction, i.e. U.K., or R o I and must NOT be undischarged bankrupts. registered with the appropriate Government department.

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If there are several trustees the survivors can act when some die. When the last one dies his heir inherits the trust. A trust deed normally provides for the resignation of a trustee and for the substitution of a new trustee. However substitutions have to be registered at some expense. Experience has shown that disgruntled or awkward trustees can make things very difficult. If they fall out with the church or change their views they can obstruct any action of legal significance which requires their signatures. Such Trustees are personally liable for the legal responsibilities of the church. This means that their property is at risk if the church is sued and does not have the resources or insurance cover to meet the claim.

(ii)

A corporate body

These are usually a trust holding company whose liability is limited by guarantee. They operate under their own Memorandum and Articles of Association. They must be registered in the Company’s Register. Annually they are required to make a return listing their Directors and including their Audited Accounts. The significant difference between such bodies and individual named trustees is that such a company continues in existence even though directors change. It is the “Company” that is the Trustee.

3. The Trust Deed
Where Trustees are chosen by the church as the method of owning its property, a Deed of Trust must be drawn up to give the individual trustees or the corporate body the legal responsibilities of the church. This should also set out the duties, responsibilities and limits of authority of the Trustees and church. Normally a Trust Deed will include: the the the the the the identification of the property being purchased name(s) of the Trustee(s) name of the church aims and stance of the church power to purchase, rent, sell or let the church property use of the premises if the church ceases to exist.

The Trust Deed essentially relates to the plot of ground on which the church building stands. By defining the type of group set up under the Trust Deed it defines the group which can legitimately use the land and premises. For example a “Baptist” trust excludes use of the property by Presbyterian, Brethren or Hindus. When a Trust Deed is being created it needs to be carefully considered and worded to ensure: 1. that it does what the church intends

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2. that it gives the trustees the powers they need but no more power than the church wishes or might wish This needs to be considered in two areas: (i) Doctrinal While it is normal that the doctrinal position of the church and Baptist Principles are set out it should be remembered that burning theological issues in one generation may be of little importance in the next. However if these are included in the Trust Deed the church is bound by them. It is best to restrict such statements to the central truths of the faith and to omit sectional interpretation and issues over which Baptists differ. (ii) Organisational Some of the older Trust Deeds of churches go into detail about the organisation of the church setting out: the composition of the church the appointment of the pastor and office bearers the number and timing of members' meetings While some of these things may be desirable in the Constitution of the church they are out of place in the Trust Deed as they bind the church to such practices in the future. 3. that it is not restrictive on the future development of the church.

4. The Corporations
In Ireland to meet these needs two Corporations have been established: the Southern Baptist Corporation Limited for the Republic of Ireland; and the Northern Baptist Corporation Ltd for Northern Ireland. These corporations have their own Memorandum of Association which enshrine the Doctrinal Statement of those things commonly believed among the churches in the Association of Baptist Churches in Ireland. They also define the purpose and functions of each Corporation. Among other things each has power to acquire and to dispose of land and property. The Corporations have developed a Standard Deed of Trust (Appendix _) to remove the need for developing a Trust Deed on each occasion a church purchases property. This is used by many of our churches. It permits the Corporations to purchase or hold on behalf of a church property to be used and managed by the church entirely at its 'uncontrolled discretion'. This means that the day-to-day organisation and operation of the church is entirely a matter for the local church. The Trustee cannot interfere in the affairs of the local church. Indeed such interference would be a breech of Trust. There are two reasonable limits on this “uncontrolled discretion”. There is an obligation on the Trustee to ensure:

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1. that the church, its pastor and its office-bearers hold and practise the doctrines set out in the Memorandum of Association, that is, the Doctrinal Statement of the Association of Churches. In the event of Pastor, office-bearers or the church departing from those doctrines, the trust body is legally required to deny them the use of the property. 2. the conduct of business in accordance with Baptist Principles of congregational church government, particularly in regard to the: reception, disciplining and excluding of church members electing and removing church officers and pastor the sovereignty of the church meeting in all matters affecting the life of the church. Finally a provision is also made for the event of the church itself being dissolved. This allows that the Trustee takes possession of and uses or disposes of the property in the interest of Baptist work in Ireland.

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