Selling Real Property as a Religious Organization in New York: What You Need to Know

For many faith-based communities, real property — from houses of worship and parish halls to schools and community centers — is more than just land and buildings. These assets often embody generations of history, spiritual life, and community service. However, there are times when selling property becomes necessary: due to changing demographics, financial sustainability challenges, or shifting ministry priorities.

Before any sale can move forward, religious organizations in New York State must navigate a unique set of legal requirements. Missing a step isn’t just an administrative problem — it can jeopardize the validity of the sale itself.

Getting Approval from the New York State Attorney General's  Charities Bureau Office

Under New York’s Section 510 of the New York State Not-For-Profit Corporation Law and Section 12 of the New York State Religious Corporations Law, a religious corporation generally cannot sell, mortgage, or lease for a term of more than five (5) years its real property without first obtaining leave (approval) from the New York State Attorney General's Charities Bureau Office. This safeguard ensures that major asset decisions are made transparently and in the best interests of the congregation and its mission.

This rule applies broadly to houses of worship — including Churches, Synagogues, Mosques, Temples, Mandirs and other incorporated religious bodies gathering spaces — regardless of whether they are also nonprofit corporations under other state statutes.

The process of obtaining NYS Attorney General approval is time consuming and complex and can be achieved wither through a direct submission to the New York State Attorney General's Charities Bureau Office or a filing in the New York State Supreme Court County where the property is located. This process involves the drafting and submission of a petition and supporting documents and obtaining approval can in many cases take at a minimum ninety (90) days even if there are no issues with the initial submission. That is why we recommend you speak with a thorough and experienced real estate attorney who has guided other clients through this process before.

What Happens if a Religious Organization Sells, Mortgages of Leases Real Property Without Obtaining Approval First?

Selling, Mortgaging or Leasing real property without the required Approval from the New York States Attorney Generals Charities Bureau can lead to serious consequences:

• The sale may not be legally enforceable;

• Buyers and lenders may face title issues;

• Congregational leadership could face legal challenges from members;

• Property tax or nonprofit compliance issues could arise.

Given the complexity, many religious corporations do not discover these statutory requirements until well into a real estate negotiation — potentially delaying or derailing the sale.

At The Law Offices of Kevin M. O'Sullivan we understand both the legal framework and the unique concerns of faith-based organizations. Our team offers tailored support at every step of the property sale process:

✔ Legal Strategy & Pre-Sale Planning

• Review governing documents and bylaws

• Assess congregational and ecclesiastical approval requirements

• Identify any denominational or internal thresholds that must be met

✔ Regulatory Filings

• Prepare and file perfected petitions under the Religious Corporations Law and Not-for-Profit Corporation Law

• Draft and submit amended filings to the NY State Attorney General’s Charities Bureau when requested by the Charities Bureau to do so.

✔ Transaction Support

• Work alongside brokers, and appraisers, title company personal to keep the closing on track.

• Ensure that all required disclosures are included in the submission to the Charities Bureau

• Assist with title review, closing documentation, and compliance checks

✔ Post-Sale Compliance

• Advise on proper use of sale proceeds

• Help with nonprofit reporting and governance updates

  
  

Selling real property as a religious organization in New York State will involve layers of legal and governance oversight — but with the right guidance, it doesn’t have to be overwhelming.

Whether you are just beginning to consider a property sale or have already signed a contract, we can help you navigate the statutory requirements, avoid pitfalls, and protect the mission and legacy of your organization.

Contact us today at (718) 587-9922 or info@lawfirmKos.com to schedule a consultation and safeguard your property transaction from start to finish.

This article is meant to be utilized as a general guideline. Nothing in this blog is intended to create an attorney-client relationship or to provide legal advice on which you should rely without talking to your own retained attorney first.