What's happening
This bill allows solvent religious corporations in New York to sell or mortgage real property valued under $200,000 without a court order, under specific conditions.
Why it matters
Reduces legal and financial barriers. By allowing solvent religious corporations to sell or mortgage lower-value real property without court approval, the bill decreases legal expenses and delays, making it easier for these organizations—often with limited resources—to manage or liquidate their assets.
Protects against misuse or undervaluing. The bill includes safeguards, such as requiring a recent professional appraisal, limiting transactions to those within 10% of appraised value, and mandating arm’s length (unrelated party) deals. This helps prevent property from being sold or mortgaged below market value or to insiders without oversight.
Requires transparency and congregational notice. Religious corporations must provide at least 30 days’ notice to their congregants in a manner likely to reach most members before proceeding, supporting greater transparency and giving stakeholders the opportunity to respond to proposed property transactions.
Maintains denominational oversight. For denominations that traditionally require higher authority consent (such as Episcopal, Catholic, Presbyterian, or Methodist churches), the bill still requires those consents for these streamlined transactions, preserving important denominational checks even as it removes the court from the process.
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Who cares
Headline styles
Ease Property Sales for Churches
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1895
2019-2020 Regular Sessions
IN SENATE
January 17, 2019
Introduced by Sens. GALLIVAN, AKSHAR -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the religious corporations law, in relation to the sale, mortgage and lease of real property of a religious corporation
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivisions 1 and 9 of section 12 of the religious corporations law, subdivision 1 as amended by chapter 555 of the laws of 2015 and subdivision 9 as amended by chapter 962 of the laws of 1969, are amended to read as follows:
1. (a) A religious corporation shall not sell, mortgage or lease for a term exceeding five years any of its real property without applying for and obtaining leave of the court or the attorney general therefor pursuant to section five hundred eleven of the not-for-profit corporation law as that section is modified by paragraph (d-1) of subdivision one of section two-b of this chapter or section five hundred eleven-a of the not-for-profit corporation law, except that a religious corporation may execute a purchase money mortgage or a purchase money security agreement creating a security interest in personal property purchased by it without obtaining leave of the court therefor.
(b) Notwithstanding the provisions of paragraph (a) of this subdivision, any solvent religious corporation may sell any of its real property without a court order in the following circumstances:
(i) The religious corporation shall have and maintain in its records an appraisal report prepared by a professional appraiser and dated or updated within ninety days of the sale showing the fair market value to be less than two hundred thousand dollars;
(ii) The sale shall be an arm's length transaction for a cash consideration at the fair market value of the property which shall be within ten percent of the appraised value;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00808-01-9
S. 1895 2
(iii) The governing body of the religious corporation shall have given notice for not less than thirty days to the members of the congregation served by the religious corporation in a manner likely to be seen by a majority of such members including but not limited to publication in any bulletin, newsletter, or similar document normally distributed to such members; and
(iv) A certificate of compliance with the requirements of this paragraph executed by the person or persons executing the deed on behalf of the religious corporation under the penalties of perjury shall be attached to and recorded with the deed; and with respect to religious corporations subject to subdivision two, three, four, five, five-a, five-b, or five-c of this section, such certificate shall have endorsed thereon the consent of the church authority or authorities whose consent would be required under such subdivisions of this section before the filing of an application to the court.
(c) Notwithstanding the provisions of paragraph (a) of this subdivision, any solvent religious corporation may mortgage any of its real property without a court order in the following circumstances:
(i) The religious corporation shall have and maintain in its records an appraisal report prepared by a professional appraiser and dated or updated within ninety days of the mortgage showing the fair market value to be less than two hundred thousand dollars;
(ii) The mortgage shall be an arm's length transaction with a mortgagee licensed to make mortgage loans in the state for an advance of cash in a principal amount not more than two hundred thousand dollars;
(iii) The governing body of the religious corporation shall have given notice for not less than thirty days to the members of the congregation served by the religious corporation in a manner likely to be seen by a majority of such members including but not limited to publication in any bulletin, newsletter, or similar document normally distributed to such members; and
(iv) A certificate of compliance with the requirements of this paragraph executed by the person or persons executing the deed on behalf of the religious corporation under the penalties of perjury shall be attached to and recorded with the mortgage; and with respect to religious corporations subject to subdivision two, three, four, five, five-a, five-b, or five-c of this section, such certificate shall have endorsed thereon the consent of the church authority or authorities whose consent would be required under such subdivisions of this section before the filing of an application to the court.
9. If a sale, mortgage or lease for a term exceeding five years of any real property of any such religious corporation with respect to which a court order was required under subdivision one of this section has been heretofore or shall be hereafter made and a conveyance or mortgage executed and delivered without the authority of a court of competent jurisdiction, obtained as required by law, or not in accordance with its directions, the court may, thereafter, upon the application of the corporation, or of the grantee or mortgagee in any such conveyance or mortgage or of any person claiming through or under any such grantee or mortgagee upon such notice to such corporation, or its successor, and such other person or persons as may be interested in such property, as the court may prescribe, confirm said previously executed conveyance or mortgage, and order and direct the execution and delivery of a confirmatory deed or mortgage, or the recording of such confirmatory order in the office where deeds and mortgages are recorded in the county in which the property is located; and upon compliance with the said order such
S. 1895 3
original conveyance or mortgage shall be as valid and of the same force and effect as if it had been executed and delivered after due proceedings had in accordance with the statute and the direction of the court. But no confirmatory order may be granted unless the consents required in the first part of this section for a Protestant Episcopal, Roman Catholic, Presbyterian church or an incorporated African Methodist Episcopal Zion church or an incorporated United Methodist church have first been given by the prescribed authority thereof, either upon the original application or upon the application for the confirmatory order.
§ 2. This act shall take effect immediately and shall apply to sales and mortgages of real property occurring on or after the effective date of this act.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the religious corporations law, in relation to the sale, mortgage and lease of real property of a religious corporation
Purpose
This bill amends Section 12 of the Religious Corporations Law to provide an exemption to the current requirement for court approval of the sale, mortgage or lease of property owned by a religious corporation. This exemption would only apply to the sale of real property whose fair market value and actual sale price do not exceed $200,000.00 or to the mortgage of real property where such mortgage secures a debt of less than $200,000.00.
Summary of provisions
Section 12(1) of the Religious Corporations Law requires that a reli- gious corporation intending to sell, mortgage or lease (for a period of more than five (5) years) first must submit a petition to the Supreme Court of the judicial district or the County Court of the county in which the corporation has its office or principal place of operation. The court then gives a minimum fifteen (15) day notice of hearing on the transaction to the Attorney General and any other member, officer or creditor of the corporation that the court may choose. A "show-cause" hearing is then held at which any party may appear and argue why the petition should not be granted. Once satisfied that the consideration and terms of the transaction are fair & reasonable, the court may authorize the sale, lease or other disposition of the property.
Justification
This process is a difficult, time-consuming and an expensive process for churches and other religious organizations that are trying to dispose of or encumber relatively modest properties. Exempting transactions under $200,000.00 enables these organizations to conduct routine business efficiently and economically while still insuring large amount trans- actions receive the scrutiny of the court.
Legislative history
2017-18: S.2935/A.9983 Passed Senate/Referred to Corporations, Authori- ties and Commissions 2015-16: S.8001 Referred to Corporations, Authorities and Commissions 2010 - S.4163 Reported and Committed to Finance 2009 - S.4163 Referred to Corporations, Authorities and Commissions 2008 - S.1591 Passed Senate 2007 - S.1591 Passed Senate 2006 - S.2497-A Passed Senate
Fiscal implications
There are no fiscal implications to the State but may save the courts time and money.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.