Guidelines for Sale, Lease, Donation or Other Alienation of Real Property

Transcription

1 Guidelines for Sale, Lease, Donation or Other Alienation of Real Property (Parish Faith Communities) What Steps Need to be Taken to Sell, Lease, Donate or Other Alienation of Real Property? Where to begin: All property alienations, whether by sale, lease, donation, exchange, granting of an easement, or historic designation, begin with a review of civil and canon law and a gathering of relevant documents. There is help available for this work. Should you have any questions, please contact your Missioner for Missional Management, the Rev. Michael Pipkin, for assistance or clarification. Church Canon Requirements When a parish faith community desires to sell, lease, donate or otherwise alienate property, our canons require certain approvals. The complete process for such alienation could take up to 90 days, including appropriate notification time for faith community meetings, and depending on the complexity of the transaction. A. Any alienation by means of sale, lease, donation, exchange, granting of an easement, or historic designation must be approved by the Bishop and Standing Committee. The Faith Community must also seek the advice of the Chancellor. Canon 803.2b. B. If the alienation involves an exchange for other property, the approval of the Trustees is also required. See the separate Guidelines for Acquisition of Real Property by Gift, Purchase or Lease (Parish Faith Communities) for more information. C. If the alienation involves a commitment on the part of the Faith Community to undertake construction, such as a lease where the Faith Community agrees to construct leasehold

2 improvements for the tenant or a sale where the Faith Community agrees to remove a building from the property being sold, the approval of the Trustees is also required. See the separate Guidelines for Construction and Construction Financing (Parish Faith Communities) for more information. D. All purchase agreements, deeds, lease agreements, loan documents or contracts for deed for installment sales, and other documents relating to the transaction must be submitted to a Chancellor for examination and approval as to form. Such approval is required before the Faith Community executes any purchase agreements, deeds, lease agreements, loan documents, contracts for deed, or other contracts or binding commitments or closes on the sale, lease or other transaction. Canon E. A copy of all purchase agreements, deeds, lease agreements, loan documents or contracts for deed for installment sales, and other documents must be kept in a safe, fire-proof place. Send a copy to the Missioner for Missional Management at the Episcopal Center for recordkeeping. Canon Also send a copy to the Vice-Chancellor for his or her records. Civil Law Requirements In addition to church canon requirements, a parish faith community must comply with certain requirements of civil law when it sells, leases, donates or otherwise alienates property. A. The Vestry must approve sale, lease, donation or other alienation of property and record its action in the Vestry minutes. Normally, this action should take place before the matter is submitted to ECMN for review or approval. B. The Faith Community must abide by the requirements of its Articles of Incorporation and Bylaws to close on its sale, lease, donation or other alienation of property. The deed, lease agreement, loan documents, contracts for deed, or other documents need to use the name of the Faith Community set out in the Articles of Incorporation, which may be different from the common name of the Faith Community. C. Faith Communities are normally organized as religious corporations under Minnesota Statutes chapter 315. If the Faith Community is organized under Minnesota Statutes chapter 315, the congregation must approve any sale or other conveyance of its church or church site in a meeting called for that purpose. Minnesota Statutes section D. In some instances, Faith Communities have been organized as nonprofit corporations under Minnesota Statutes chapter 317A. Congregational approval of sale or other conveyance of property is not required for Faith Communities organized under Minnesota Statutes chapter 317A, unless the sale or conveyance is for all or substantially all of the assets of the Faith Community or is otherwise required in its Articles of Incorporation or Bylaws. Minnesota Statutes section 317A.661. As a practical matter, 2

3 congregational approval should be obtained for any sale of the church or church site whether or not the church or church site constitutes all or substantially all of the assets of the Faith Community. LEASES: TAXES, ADA, ETC. E. The Faith Community is encouraged to appoint its own attorney to provide legal advice and representation to the Faith Community. The Faith Community will be responsible for the fees and expenses of its attorney. The Faith Community s attorney should work cooperatively with the Vice-Chancellor in connection with the transaction. Approval Process The Faith Community should not enter into any purchase agreement, lease agreement, or other binding obligation for sale, lease, donation or other alienation of property until it has obtained the necessary approvals by the Bishop, Trustees, Standing Committee and Chancellor. The process for obtaining such approvals normally follows the following sequence: A. As the Faith Community is preparing to move forward with the sale, lease, donation or other alienation of property it should gather the documents that will need to be reviewed by the Bishop, Trustees, Standing Committee and Chancellor. A list of the documents required for legal review is included in Appendix A. B. In addition to gathering documents, the Faith Community should also be thinking about why it desires to sell, lease, donate or otherwise alienate the property, what impact such transaction will have on the mission, ministry, and sustainability of the faith community, and any other information the faith community would like to share with the larger church. These matters are included in the Property Alienation Questionnaire that will guide the Faith Community, Bishop, Trustees, and Standing Committee in their approval of the alienation. The Property Alienation Questionnaire is included in Appendix B. C. The Faith Community is encouraged to work with the Missioner for Missional Management in gathering the documents and thinking through the Property Alienation Questionnaire as soon as they begin considering the sale, lease, donation or other alienation of the property. This will help expedite the approval process. D. Once the Vestry has approved the sale, lease, donation or other alienation of the property, the Rector or Senior Warden sends one letter addressed to the Missioner for Missional Management with a copy to the Bishop advising ECMN of the proposed alienation. The letter should include the documents that are available to the faith community at that time and a completed Property Alienation Questionnaire. This letter can be sent via , along with scans of the appropriate documentation and the Property Alienation Questionnaire. 3

4 E. Normally, within a day or two of receiving information from the Faith Community, the Rector or Senior Warden will receive a phone call from the Missioner for Missional Management who will discuss the action of the vestry, the next steps in the approval process, and the timelines for any required approvals. The Missioner for Missional Management will then verify all of the documents and the Property Alienation Questionnaire, and forward them to the Bishop, Trustees, Standing Committee and Chancellor for review and recommendations. F. Upon receipt of the information from the Missioner for Missional Management, a member of the Standing Committee or Real Estate Committee of the Trustees will contact the Rector or Senior Warden to discuss the matter, ask questions, and possibly arrange a time for a personal visit. Following this conversation or visit, the Trustee will write a brief report on the project, making appropriate recommendations, and will forward that report to the Rector, Senior Warden, Bishop, Trustees, Standing Committee and Chancellor. G. Meanwhile, the Chancellor will review the legal documents and make recommendations as to form and content of legal documents relating to the project, and will forward those recommendations to the Missioner for Missional Management for distribution to the Faith Community, Trustees, Standing Committee and Bishop, as appropriate. H. If the Trustees advice or approval is required, the Trustees, upon receiving the report from the Real Estate Committee, will place the sale, lease, donation or other alienation of the property on their agenda for the next appropriate meeting. Representatives of the Faith Community may be asked to meet with the Trustees to discuss the matter. In some circumstances the Trustees will consider the proposal by or conference call. The Trustees will discuss the matter and hold a vote to consent. If approved, a written approval will be forwarded to the Missioner for Missional Management for distribution to the Faith Community, Trustees, Standing Committee and Bishop, as appropriate. I. The Standing Committee, upon receiving the advice or approval of the Trustees, will place the sale, lease, donation or other alienation of the property on their agenda for the next appropriate meeting. Representatives of the Faith Community may be asked to meet with the Standing Committee to discuss the matter. In some circumstances the Standing Committee will consider the proposal by or conference call. The Standing Committee will discuss the matter and hold a vote to consent. If approved, a written approval will be forwarded to the Missioner for Missional Management for distribution to the Faith Community, Trustees, Standing Committee and Bishop, as appropriate. J. The Bishop, upon receiving the required consent of the Trustees and Standing Committee, will consider the project and, if he or she approves, will issue his or her consent to the construction project. 4

5 Contacts Do not hesitate to ask any of the following persons for assistance: Missioner for Missional Management: Vice-Chancellor: The Rev. Michael Pipkin Episcopal Church in Minnesota 1730 Clifton Place, Suite 201 Minneapolis, MN Tel: or , ext. 315 Fax: Robert O. Straughn McGrann Shea Carnival Straughn & Lamb, Cht d 800 Nicollet Mall, Suite 2600 Minneapolis, MN Tel: Fax: ros@mcgrannshea.com 5

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