Knowing how to sell church property the right way takes careful planning, because it is nothing like selling a house. Assuming your congregation is incorporated and has decided it is time to sell, several steps must be followed to handle the sale responsibly, acting in the best interest of the congregation and corporation, honoring the governing documents, and complying with California law. This guide walks through the five key steps. If you would rather have an attorney and broker handle the whole process for you, learn how we help churches sell church property across California.
Selling a church property in California involves five distinct steps, and skipping or rushing any one of them is the most common way churches run into trouble when they sell church property.
The 5 Steps at a Glance
Confirm ownership: Verify the church is the sole owner of record by reviewing the recorded deed, since a defective grantee name can cloud title.
Get congregational approval: Before a church can sell church property, its bylaws typically require a vote from the active, voting members to approve the sale.
Secure conflict-free representation: Engage a broker and attorney without a personal stake in the sale, since a member-broker carries an inherent conflict of interest.
Establish value: Obtain a zoning or market analysis and a title report, since what a church actually receives when it sells its property depends heavily on what a buyer can use it for.
Notify the Attorney General: Before a church can sell church property, California Corporations Code §9633 requires written notice to the Attorney General at least 20 days in advance, unless a waiver has been granted.
Step 1: Confirm Who Actually Owns the Property
Not all churches own their property, and that is the first thing to verify when you sell church property. Your real property may be owned by your denomination, regional office, or synod rather than your local congregation. How title is held will be set forth in a recorded deed, obtainable through the county recorder or a title company.
Once you have the deed, check how title is held to confirm the church is the sole owner and to identify the exact owner of record. Clouds on title often arise from a defective deed with the wrong grantee name. If a church is incorporated as “The Church of Southern California” but the deed lists the grantee as “The Church of California,” the latter is the owner of record, and an attorney or title company may need to correct the error. Otherwise the church cannot convey clear, marketable title.
Step 2: Follow Your Governing Documents and Get Congregational Approval
Your church sets forth its governance in a constitution or bylaws, and those documents dictate how to sell church property. As a nonprofit corporation, the power generally lies with the members of the congregation rather than with shareholders or a board of directors alone.
Typically the corporation may buy, sell, and encumber real property upon approval of a majority of the active, voting members. The governing documents set out how that approval is sought, such as calling a congregational meeting under the bylaws. Often a congregation approves a sale with the caveat that the Church Council find a buyer and return with a bona fide offer for final approval. Throughout, the governing documents must be followed and backed by minutes and resolutions granting named individuals the authority to legally bind the corporation and transfer title.
Step 3: Secure Proper, Conflict-Free Representation
This is where how to sell church property gets complicated for most boards. Once the congregation approves the sale, the church needs proper representation to protect its interests. Many churches have members who are licensed to broker real estate, but a member broker carries an inherent conflict of interest: are they working for the church, or for their own commission?
Selling special-use religious property is complex and involves far more than an open house and a signature. When you sell church property, location matters, but the underlying zoning has an even greater effect on its value to a buyer, because the property is only worth what a buyer can actually use it for. This is where specialized representation earns its keep.
Step 4: How to Sell Church Property for What It Is Worth
If you are researching how to sell church property, know that it rarely has a single value; it depends on who the ultimate buyer is. To arrive at a real number, weigh both the site feasibility and the economic value. A church in a residential zone without a Conditional Use Permit may be worth little to another church buyer, while a residential developer might value the same parcel far higher.
For that reason, obtain more than a simple Broker’s Opinion of Value; get a zoning or market analysis. As part of it, obtain and understand a Title or Preliminary Report, which sets out the legal description and any encumbrances, mortgages, deed restrictions, outstanding taxes, and easements, all of which affect the use, transfer, and ultimate value of the property. Used properly, that report surfaces problems before they derail the sale.
Step 5: Give the Attorney General Notice Before You Sell
This is the step churches most often miss. Under California Corporations Code §9633, a religious corporation must give written notice to the Attorney General 20 days before it sells, leases, conveys, exchanges, transfers, or otherwise disposes of all or substantially all of its assets, unless the Attorney General has waived the requirement for that transaction. By regulation, “substantially all” means assets equal to or exceeding 75 percent of everything the corporation holds.
The notice must include a letter, signed by an attorney or a director, describing the proposed action; a copy of the board resolution authorizing it; the corporation’s current financial statement; and a copy of the articles of incorporation. The Attorney General may also require an independent appraisal or other evidence that the price and terms are fair to the corporation. One firm rule underlies all of it: no portion of any fee or proceeds from the sale of church property may be distributed to, or inure to the benefit of, any private individual.
If your church is selling because the congregation is closing rather than relocating, the process is similar but not identical. See our guide on what happens when a church closes for how dissolution changes the picture.
Get It Right the First Time
Each of these steps has a trap that can cloud title, void an approval, or draw an Attorney General objection, and any one of them can cost a church its sale or its price. When you are ready to sell church property, the safest path is representation that handles the legal and real estate sides together. See how we guide churches through the entire process on our Selling Church Property page.
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When Should a Church Sell Its Property or Relocate?
Special Use Appraisals
Appraisals vs Market Evaluations
Do I need congregational approval to sell church property in California?
In most cases, yes. Church bylaws typically require a congregational vote before the board can proceed with a sale, and the specific approval process is usually set out in the church’s governing documents.
Does the California Attorney General need to be notified before selling church property?
Often, yes. A religious corporation generally must give the Attorney General written notice at least 20 days before selling, leasing, or otherwise disposing of substantially all of its assets, unless a waiver has been granted.
What is the first step in selling church property?
Confirming how title to the property is held, typically by pulling the recorded deed from the county recorder, to verify the church is the sole owner of record before moving forward with a sale.
Disclaimer: Every situation is different and particular facts may vary thereby changing or altering a possible course of action or conclusion. The information contained herein is intended to be general in nature as laws vary between federal, state, counties, and municipalities and therefore may not apply to any given matter. This information is not intended to be legal advice or relied upon as a legal opinion, course of action, accounting, tax, or other professional services. You should consult the proper legal or professional advisor knowledgeable in the area that pertains to your particular situation.
