Church Property Ownership: Another Lame Excuse for Contracting with Civil Government for Church Corporate Status

Jerald Finney
October 27, 2020

Is the church you are a member of being prepared for His coming?

Ephesians 5:25-27: “Husbands, love your wives, even as Christ also loved the church, and gave himself for it; That he might sanctify and cleanse it with the washing of water by the word, That he might present it to himself a glorious church, not having spot, or wrinkle, or any such thing; but that it should be holy and without blemish.”

2 Corinthians 11:1-3: “Would to God ye could bear with me a little in my folly: and indeed bear with me.  For I am jealous over you with godly jealousy: for I have espoused you to one husband, that I may present you as a chaste virgin to Christ. But I fear, lest by any means, as the serpent beguiled Eve through his subtilty, so your minds should be corrupted from the simplicity that is in Christ.”

Ephesians 1:22-23: And hath put all things under his feet, and gave him to be the head over all things to the church, Which is his body, the fulness of him that filleth all in all.”

Colossians 1:18: “And he is the head of the body, the church: who is the beginning, the firstborn from the dead; that in all things he might have the preeminence.”

No church in the New Testament and no church for a long time thereafter owned property. Churches were built according to the doctrine of the church as explained by our Lord as he laid the foundation before his death, burial, and resurrection; and, after His resurrection, by the epistles of the Apostle Paul as inspired by the Holy Spirit. “Christian” attorneys (e.g., David Gibbs) and others will tell you flat out that today’s churches simply cannot do things God’s way. They explain, without Bible reasoning, that they cannot operate like that. Being “practical” trumps New Testament church doctrine and example. They state that churches must become worldly organizations with fleshly, temporal goals to one extent or another. According to them, churches must own, or seek to own, property on which to build meetinghouses. Of course, the more “successful” churches will also build gyms, restaurants, buildings for Bible institutes and colleges, and auditoriums for rock concerts, plays, bookstores, etc. To do so they believe that they must violate Bible principles and sacrifice the status of the local church as an entity under the authority of Lord Jesus Christ and Him alone. They become spiritual harlots and dishonor their Bridegroom.

A church who does not act legally is not a legal entity; she is a church under the authority of Christ and Christ alone. A church who acts legally is a legal entity. Legal entities are under the authority of civil government for many purposes. One way a church can act legally is to own property. A church may buy property in the name of the church, and become a legal entity, without incorporating. A legal entity, as opposed to a New Testament church, is an entity which can sue, be sued, contract, go into debt, buy and sell, be charged with crime, or act legally in other ways. Churches can also become legal entities by voluntarily submitting themselves to man’s law through incorporation, Internal Revenue Code Section 501(c)(3) or Section 508(c)(1)(A) status, charitable trust law, or unincorporated association law.

One reason churches give for incorporation is “to own property,” even though the church may buy property in the name of the church without incorporating. Either method of owning property is wrong, because either results in the church becoming, if it is not already, a legal entity. Church incorporation is the least desirable method of the two because it brings a lot of red tape which entwines the church in the many provisions of the law of incorporation. For example, see the California Corporations Code or the California Attorney General’s Guide for Charities. A religious corporation in California is classified as a charity.

The incorporation laws of the states vary, but they all give the state considerable control over the church and they all make the corporate church a legal entity. To understand the legal status and powers granted a religious corporation in California see, California Code, Corporations Code – CORP, TITLE 1. CORPORATIONS, DIVISION 2. NONPROFIT CORPORATION LAW, PART 4. NONPROFIT RELIGIOUS CORPORATIONS, CHAPTER 1. Organization and Bylaws, ARTICLE 4. Powers, 9140. Section 9140 begins by stating, “Subject to any limitations contained in the articles or bylaws and to compliance with other provisions of this division and any other applicable laws, a corporation, in carrying out its activities, shall have all of the powers of a natural person, including, without limitation, the power to: ….” A corporation is a legal entity controlled according to the law of the state of incorporation.  As a legal entity, the corporate church has voluntarily given up much of its First Amendment protection. For more on church incorporation, see, e.g.,(1) What does church, inc. mean?, (2) Who Is the head of an incorporated church?, (3) What is an established church? 

Owners of real property, whether an individual or an unincorporated or incorporated church, usually get liability insurance on that property. Liability insurance covers the liability of, to the extent of the limits of the insurance policy, the legal owner, others who may have been assigned or volunteered to make sure the property is safe, and perhaps those members of the organization who knew of, but ignored, the dangerous condition. Liability insurance is an admission that the legal owner of the property is a legal entity in that it gives protection against being sued.

Almost all churches become owners (and possessors) of property; and, as legal owners of the property, they can be sued should someone be injured on that property. The little old lady who slips on the ice on the entrance can sue.

Our Lord, when meeting with His apostles and disciples as he laid the foundation of the church, met on property with them. As recorded in the New Testament, many times their meetings were outdoors. Christ owned and owns all things. However, He, for the time being, entrusts legal (earthly, temporal) ownership to the earthly owners. A church, an assembly of believers, must meet on property. The churches in the New Testament, and churches for a long time thereafter, never met in buildings they owned.

So how can a church honor both God and man in the matter of property ownership? The original churches met on property owned by the Lord Jesus Christ, the owner of all things, but legally owned by someone, not by the church. The church was not the legal owner or owner in any sense of the property they met on. Every piece of property they met on was legally owned by a person or persons who, whether they realized it or not, was entrusted by the real, true owner of the property – the Lord Jesus Christ –  to hold and manage the property for His benefit..

Churches in America can still obey God and His principles on the matter of assembling together. They can meet on property owned by others as long as they have the permission of the owner. They can meet on property owned or leased by a person: a church member or someone else. They can meet on public property. For example, a church in Austin Texas meets under a bridge. Or, they can meet on property held by a person in trust for the benefit of the true owner of the property, the Lord Jesus Christ.

Many churches in America are now choosing to establish an irrevocable trust relationship with property whereby a trustee holds and administers the property in the trust estate for the benefit of the true owner of the property, the Lord Jesus Christ. This “common law” or “Bible” trust is a fiduciary relationship with real and/or personal property (personal property includes intangible property such as money and bank accounts) recognized but not created by man’s law. This relationship is established by an agreement between a trustor and trustee, is private, creates no contract with the state (the state is not a party), and is not subject to control by civil government and its courts. Trust documents, if any, are never required to be filed in man’s legal system through any of its courts or agencies. This type of trust is not a legal entity. The trust relationship can be established orally or in writing; a properly drafted writing is much better than an oral trust, especially if the trust estate is to hold real estate, vehicles, or other property which requires a written title. If not in writing, and if the facts show the intent to establish a relationship with property to be held by a trustee for the benefit of the true owner of the property then a trust relationship has been established. Also, should the trustee desire to open a trust bank account, written documents will probably be required by the bank.

It is not necessary to use the terms “trust (or steward, etc.),” “trustor (or grantor, steward, donor, etc.),” “trustee (or steward, etc.),” “trust estate,” or “beneficiary” for a trust relationship to come into existence if the essentials of the relationship are there.

The trustor creates the relationship and names a trustee who agrees to administer a trust estate funded by the trustor (and others, if any, who wish to contribute to the trust estate) solely for the benefit of another, the true owner of the trust estate, the beneficiary. The trustor merely establishes the trust relationship. Again, the trustee administers the trust estate solely for the benefit of the owner of the trust estate. Once assets are placed in the trust estate, those assets permanently belong to the beneficiary, not to the trustor  (in an irrevocable trust).

When this relationship is created, the church remains non-legal entity as long as she does not misstep and act legally in some way. For more on this see, The Church Bible Trust Relationship Explained and How a Church Can Nullify Her Effort To Remain under Christ Only.

What about the little old lady who slips on the ice at the door of the meeting house? A church which is a legal entity (incorporated, 501(c)(3) or 508(c)(1)(A), unincorporated association, charitable trust, etc.) can be sued. Any member of that church who can be held to have violated a duty to maintain safety on the property can be sued. This could go to the officers of the corporation, the janitor, the one who volunteered to remove the ice, etc. Thus, the corporation gets liability insurance. More importantly, should a church member desire to displease our Lord and apply to man’s law, state law, for corporate or other legal status, so that their liability is limited such that they will not be required to help that little old lady injured on the ice? Another consideration is that the members of the church own the corporation and ultimately pay the debts and liabilities of the corporation: they pay for the insurance and any obligation not covered by the insurance.

What about the church under Christ and Christ alone? Believers should take care of that little old lady who slips on the ice which a responsible party intentionally, recklessly, or negligently failed to remove or salt down; especially when the property is used for a meetinghouse open for attendance to the church members and others. If the church meets in someone’s house, the homeowner should, and probably does, have homeowner’s insurance. Should the church establish a common law trust and acquire property for a meetinghouse, the trustee, as legal owner of the property, should obtain liability insurance, in the name of the trust, him being the legal owner of the trust estate.

Property owners, especially believers, should be responsible for the safety of the property they legally own. This is common sense. This is Christian. This is Bible. The new Testament Church, not being a legal entity, cannot be sued, but those legally responsible can be sued. Nonetheless, those injured on the Lord’s property due to the failure of the legal owner of the property to make sure that the property is safe, are to be taken care of.

In conclusion, many believers in America, seeing the problems with church legal status, are leaving their legally established churches and forming house churches. Others, when the need for a larger facility arises or should a bank account be desired to secure God’s money, are establishing trust relationships with property as described above. Sadly, even though the First Amendment to the United States Constitution and corresponding state constitutional provisions guarantee that churches may choose to do things God’s way without persecution, the overwhelming majority of churches betray our Lord and become legal entities. One of their many excuses is that it is not practical to do things God’s way in the matter of property ownership. Not so. It is always practical, from God’s viewpoint, for believers and churches to honor their love relationship with the Lord Jesus Christ.


For analysis of other false reasons for betraying our Lord see:

False Reasons of Christians and Lawyers for Church Corporate, 501(c)(3) Status or Legal Status of Any Kind


For more information on the common law (Bible) trust, see:

  1. The Church Bible Trust Relationship Explained and How a Church Can Nullify Her Efforts to Remain Under Christ Only
  2. How a Church Can Organize to Remain a New Testament Church (Holding Property In Trust For God Is A Scriptural Principle Recognized by American Law) 
  3. What God Has Committed to Man’s Trust: “Ye Cannot Serve God and Mammon”: Steward or Trustee?
  4. The Bible Trust Relationship, Essays and Other Resources

 

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