Landmen and attorneys frequently find churches and other religious institutions within their chains of title, either as current or past holders of record title. These religious institutions are often conveyed valuable mineral or royalty interests, either through an unsevered estate, or more directly through a severed mineral or royalty interest. Therefore, it is crucial that landmen and attorneys understand the legal frameworks regarding church ownership of real property when engaging in leasing, conveyancing, or otherwise examining title.
Unfortunately, the applicable legal frameworks can be somewhat complex and confusing. This is likely due to the inherent conflict between constitutional law and property law. On one hand, the constitution requires that courts defer to the religious institutions, so as to refrain from becoming too entangled with the establishment or free exercise of religion. This means that courts must exercise certain levels of deference to religious institutions regarding their internal beliefs or rulings as to which branches, levels, parish or other type of sub-entity has the rights of ownership and authority over church property. However, on the other hand, courts must also rule on property disputes. This jurisprudencial battle is outside the scope of this article, but it should provide some direction in understanding goal behind the various frameworks that have developed for analyzing church property ownership and conveyancing disputes.
Generally, the topic can be divided into two subissues: (1) whether the status of the entity is such that, in the relevant time period, it could legally hold title to real property in its own name rather than a trustee, and (2) which persons or entities within the church organizational structure technically hold title to the real property. Understanding these issues, and the applicable legal frameworks, are crucial to effectively handling oil and gas title, leasing, and royalty payout.
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