Based on a review of thousands of cases involving churches and religious organizations, attorney and co-founder of Church Law & Tax Richard Hammar has identified the top five legal issues that lead to litigation for churches:
#1: Sexual abuse of a minor.
Sexual abuse of a minor is a serious crime and if facts show that church leaders knew about the abuse and failed to stop it, they may have committed crimes as well. The church itself is likely to be sued if the abuser was a member of its staff or one of its volunteers, or if the abuse occurred on church grounds or at a church-sponsored event. Churches can take steps to prevent abuse problems within their organizations by:
- Taking complaints seriously. Not believing the victim is a classic mistake that leads many organizations into trouble.
- Adopting an anti-abuse policy that the congregation will see and discuss.
- Knowing if your staff or volunteers have a criminal background or are listed on the state’s sex offender list. People with these red flags may need to be monitored more carefully than others.
- Talking to a lawyer any time an allegation of abuse is raised.
#2: Property disputes.
One of the most complicated problems that may arise for a church that owns land is uncertainty about the land’s ownership. This can be especially true for churches that have a long history. If title problems aren’t resolved, selling land or using it as collateral for a loan may prove impossible.
Churches should make sure to know precisely what their real estate titles say. If the church is the owner, confirm that the church’s organization is properly described in the property deed. This can be especially important if the church has changed its legal form over time. One significant reason that a church might choose to incorporate is to assign the church’s real estate to the corporation, which then owns all of the obligations associated with the land along with the land itself.
For churches that lease worship space, landlord disputes may arise over issues dealing with maintenance, trouble with other tenants, or a change in property ownership or policies. If the lease agreement does not give the church an option to get out of a lease in response to a decision by the landlord that adversely affects church operations, the church might need to take action to force the issue.
Another issue that may arise is when the government wants to take part of the church’s property for a road or utility easement. This is called eminent domain and property owners have rights when the government seeks to take or use private property. Churches facing eminent domain requests need to consult with an attorney to understand their rights.
#3: Personal injury.
A church or religious organization that controls, owns, or possesses a property (such as a church’s ownership or control of the building where it holds meetings) owes a duty to exercise reasonable care to prevent injury to visitors to the property. If someone suffers a significant injury while on church property or acting as an agent of the church, the church may face a personal injury lawsuit. Having good liability insurance coverage can be a significant help to churches in this area.
The Religious Land Use and Institutionalized Persons Act (RLUIPA) prohibits zoning laws that discriminate against churches and other places of religious activities. Under RLUIPA, it is unlawful for most localities to adopt zoning laws that “substantially burden the religious exercise of churches or other religious assemblies or institutions absent the least restrictive means of furthering a compelling governmental interest.” RLUIPA also prohibits unequal treatment and total exclusion of religious assemblies or institutions. Arizona also has a state counterpart called the Free Exercise of Religion Act (FERA) that is broader in some respects than RLUIPA in protecting religious land use.
Before making a land purchase or changing the use of your Property, it is important for churches to examine existing zoning laws and consult an attorney. In some cases, it may be necessary to pursue an exemption or change to existing rules to allow for the full scope of a church’s planned activities.
#5: Insurance coverage disputes.
Disputes between churches and their insurers generally involve coverage exclusions or the duty to notify. A general liability insurance policy will typically not include coverage for a claim alleging sexual misconduct by a church employee or volunteer. A church will need to obtain additional special coverage to defend against these types of claims. Insurance policies also typically contain a specific provision on how soon a church must notify the insurer of a potential claim. If deadlines are missed, the insurer will probably deny a claim. The best way to avoid this is to be sure that church management is familiar with all the provisions in the church’s insurance policies and adheres to them.
Provident’s nonprofit attorneys can help churches and religious organizations with risk management. We stand ready to counsel and serve churches, charities, and foundations, as well as private schools, colleges, universities, and other types of nonprofit organizations—providing broad transactional and general counsel services in Arizona and surrounding areas. Contact us to learn more.