Like any other contract, an agreement for a sale and purchase of real estate is an enforceable document, and a breach of its terms entitles the party who was harmed to damages that must be supplied by the party who breached the contract. That said, the complex nature of real estate contracts has resulted in an amount of law arising around these agreements. These include, for example, the stipulation in Arizona’s statute of frauds that a real estate agreement is only enforceable if the party claiming breach can produce a written and signed document (an oral contract for the sale of the property is not enough). And most real estate purchase agreements contain contingencies—which are elements that, should they occur, permit the parties to exit the contract without it being considered breach. (For example, if the contract is made contingent upon the potential buyer having sold their previous home by a certain date, and that date comes without the sale of that previous home, then the contract may be canceled—the seller of the home in question may go on to entertain other purchase offers and the potential buyer may move on to search for other properties.) And then there is the fact that a given parcel of real estate is such a unique form of property that, in the case that a breach (not supplied for in the contract’s contingencies) should occur, a court may determine that specific performance is called for.
Passed in 1997, the Federal Volunteers Protection Act (VPA) was crafted with the purpose of limiting the amount of legal and financial liability that volunteers to nonprofit organizations—including unpaid Directors—might have otherwise been subject to for harms caused in the course of their service. In drafting the Act, Congress made explicit its goal to “promote the interests” of churches and nonprofits by providing“certain protections from liability abuses related to volunteers serving nonprofit organizations and governmental entities” (42 U.S.C. § 14501). The passage of the Act was in response to a decrease in volunteerism in society at large, which Congress attributed in part to a belief that church and ministry volunteers were facing financial harm because they were judged to have caused some sort of harm to others in the course of their volunteer efforts.
As any property lawyer can tell you, property law is a complex area of law, whose rights and duties are often defined by interweaving and conflicting interests. A potential interest in a piece of property can be affected in the present by defects in the property’s title that are the result of a misstep made sometime in the distant past;and interest can be equally affected in the present by a conflict occurring in the present whose outcome still remains to be determined at some future date. An example of the latter is the legal concept of “lis pendens.”
As part of the 2017 Tax Cuts and Jobs Act, a new tax was imposed on churches and other nonprofits that assigned a value to the concept of providing parking to employees—essentially treating employee parking as a form of “unrelated business taxable income” (UBTI). The Act referred to this provision of parking for employees as a “qualified transportation fringe” (QTF) benefit. This new tax would have resulted in many churches having to file tax returns and pay tax who had not done so previously. This new tax was a surprise to many nonprofits—and immediately sparked a great deal of pushback. The good news is that, because of the backlash, Congress recently repealed this tax.
Failure to pay property taxes in the state of Arizona results in tax liens. Sometimes other lienholders are the ones to foreclose on the property. Among the liens applied to a property, tax liens are considered most “senior.” This means that when a property gets foreclosed upon either under the tax lien or by a more “junior” lienholder, though other liens that are “junior” to the tax liens are wiped out, the tax liens remain.
Sad though it may be, churches are not immune to the threat of lawsuit. Indeed, the ever-increasing litigious nature of our society brings the courts into the business of churches at a rather alarming rate. This may lead churches to think that it is not a matter of whether a church is likely to get sued, but when. The question is: what should you do if you find your church suddenly subject to a lawsuit.
One of the cutting-edge issues in property law, one that promises to have an increasing amount of currency in the coming years, is that of drone traffic. More and more people find themselves wondering what it means when a drone passes over their property, and whether they have a claim of trespass against those whose drones pass over their property without their permission.
Churches are subject to many external laws and rules but the law, and the Church’s constitutional rights, give a church the ability to define for itself how it will be governed. Another way to put this is to say that churches have the right to set up the rules they will abide by as they go about their business as a church. This self-definition is generally laid out in what are referred to as “bylaws.”
When a director’s action or inaction comes under fire via lawsuit, the question of whether the behavior in question is covered by insurance policies owned by the church can become one of vital concern. The fact is, there are a number of different types of insurance available to churches that cover various forms of director behavior.
Nuisance law in Arizona—as elsewhere—can be a complicated topic. And perhaps the most complicated of these topics—one that some property owners claim goes to a certain extent against what they consider common sense—is that of “attractive nuisance.”
It may surprise many to learn that, where the Internal Revenue Service is concerned, there is a difference between how it classifies churches and ministries. It may be confusing on the surface but makes sense once you consider the differences in these two types of organizations.
Arizona law—via common law tort and nuisance statute—recognizes the concept that one party’s use of their property may have an effect on the ability of another party to use theirs. Sometimes that effect is, from the perspective of the latter party, a negative one. This negative effect may come in the form of de-valuing nearby properties, by ruining the air quality (as air has a tendency to diffuse from one property to another before its molecules dissipate), and so on. Not everything that bothers a property owner will qualify as a nuisance, however.
Child abuse is considered by advocates to be a “hidden epidemic” in our society at large. And Arizona is no exception. We’ve witnessed recently churches and even entire denominations reeling from allegations of abuse cover-ups. One of the top reasons churches end up in court is related to child abuse. The question arises often—what are the obligations of clergy when they learn of allegations or suspect child abuse? Arizona has adopted “required reporting” provisions in Revised Statute section 13-3620(A)-(B)—enumerating those people in specific professions that must report cases of child abuse or neglect. Clergy (as well as Christian Science practitioners) are listed among these mandated reporters.
It is not uncommon for more than one party to purchase a parcel of real property for any number of reasons. Sometimes, in the course of the co-ownership, one of the parties will decide that they want to get out of the ownership situation—to remove their names from the title and the mortgage, preferably by selling the property. But what can that party do when the other co-owners do not want to sell the property? Does the law effectively lock the first party into owning property when they do not want to?
Most churches in the state of Arizona are incorporated as nonprofit corporations. From time to time a church or religious nonprofit will cease to be necessary, for whatever reason. In that case, the nonprofit will need to be dissolved so that the legal entity ceases to exist and that all its responsibilities are discharged.
In real estate law, there are a startling number of different types of rights that a person may have concerning a parcel of land. It is not just as simple as, well, “fee simple,” which is full and complete ownership over a parcel, with which one may do as one pleases (subject, of course, to laws of conduct, code,and zoning). One of the types of right over land that confounds many at first is that of easements—and particularly a subcategory of these that is referred to as “implied easement.”
Directors of churches are classified in Arizona law as directors of nonprofits. Arizona statutes provide a standard of conduct for such directors, along with protections for them. For purposes of director liability, whether the church has been incorporated or remained unincorporated is not taken into consideration. A church director will not be held liable for actions taken in accordance with their role under what is known as the “business judgment rule.”.
Law is a profession rife with terms of art—you might even say that terms of art are the meat of the profession, because the law is essentially a linguistic system codifying concepts of legal relationships, prohibitions, existences, behaviors, rights, and duties. One term of art that confuses many laypeople is the concept of a “statute of frauds.” What this is, in essence, is a statute requiring particular sorts of contracts be put writing in order for them to be enforceable. In Arizona, this includes real estate transactions.
In a very real sense it is the generosity of a church’s members, and their belief in its mission, that keeps a religious community alive. Donations of various sorts are the lifeblood of countless churches throughout the United States. It matters for tax purposes whether a donor gives the money to the church without restrictions or whether the donor restricts the money they give to a particular benefit to a church. The IRS recognizes (and enforces) a difference between “designated offerings” and “restricted offerings”—and it treats these types of offerings differently for tax purposes.
When someone has the title to a parcel of real property, it means that they possess formal proof that they are the owners of that property. That’s what title is: it’s how you prove that this is your house, your land, and that you have the right to use it or sell it if you should choose to do so. And when someone is looking to buy real estate, they need this proof to pass on to them, and to be solid. After all, once the land is theirs, they need to be able to supply that source of proof as well. That’s why an attorney for a buyer in a real estate transaction conducts a title search.