• Request a Consultation

    • This field is for validation purposes and should be left unchanged.
  • How can a Church Attorney Help With Commercial Financing?

    church financing

    Church leaders strive to better serve and lead their communities through religious endeavors while growing their congregation.

    Since so much of a church leader’s time and energy is spent on meeting the needs of the congregation, it is a difficult task to focus the time needed to protect and grow the church’s financial interests. However, looking after the organization’s financial interests will ensure that the church is around for future generations, so it is a necessary task.

    If you are a church leader, discussing your options with an attorney can help facilitate your religious institution’s growth while the ministry concentrates on matters of the congregation. An attorney can help you avoid legal mistakes, including those that involve financing.   

    For example, if your church is examining or looking into your status as a company, it is ideal to discuss your options with a veteran law firm that knows the ins and outs of the process. An experienced attorney can help you maneuver through the many steps needed to form a company, such as crafting a document that is in step with the law and has critical information regarding the church’s mission of faith.

    As you handle the front end of the church, matters can get complicated on the back end when issues arise, such as nonprofit formation, tax exemption, and governance matters. That is when an astute law firm can accommodate your organization’s desire to follow state and federal law. After all, the needs of the church and partnering with an attorney can help your religious institution gain tax-exempt status, create a board of directors, and check your continuing wishes, allowing you to concentrate on matters of faith.

    The Merging of Faith and Politics

    The Johnson Amendment, a 1954 law passed by then-Senator Lyndon Baines Johnson, who would later become president, forbids religious institutions from endorsing political candidates. This IRS requires all nonprofits to stay away from backing political candidates or hosting campaign activities. Important parts of the law include:

    • Church leaders are not allowed to endorse candidates to the congregation.
    • Church leaders cannot speak against any candidate.
    • Church leaders cannot collect contributions on behalf of political campaigns.

    To avoid issues with the IRS, church leaders should keep the Johnson Amendment in mind during political campaign season. This does not mean that a pastor cannot speak on a current social issue. Church leaders are not conflating politics and religion going against IRS tax codes if they do the following:

    • Hold voter registration drives.
    • Offer non-partisan voter education activities.
    • Hand out booklets or brochures on specific matters that may be on the ballot in upcoming initiatives.

    Finding a Reputable Law firm

    Being at the head of a nonprofit requires presence and savvy, as there are an assortment of matters that are going to call for a knowledgeable legal presence. Church staff may leave, and new staff may join the institution, which can bring about questions of employment contracts or severance pay.

    In church organizations that are non-hierarchical, arguments and power grabs can come up between different groups seeking control of the church. The organization could disband into separate subsidiaries, each of whom may want to stake claim to the property and real estate. Sometimes, local congregations split from a hierarchy, and the split gives rise to arguments over which body has rights to the property that was once both the property of the local church and the larger church structure.

    When two parties lay a stake in a property, it is in the best interest of all parties involved to resolve the issue of property governance without a contentious court battle. However, if issues arise, aligning yourself with a seasoned law firm to handle church disputes can help keep legal fees to a minimum. Accidents can happen as well, bringing a plethora of questions when it comes to liability concerns that could open up your church to lawsuits.

    Legal fulfillment audit services are vital in making sure your nonprofit is safeguarded. You are going to want to seek legal counsel to guide you through all these issues and more, ensuring the future and security of your nonprofit. An attorney can help your religious institution with the following:

    • Design, preserve, and fulfill bylaws, regulate manuscripts, along with other books of order.
    • Terms of incorporation.
    • Agreements, insurance plans, and employment concerns.

    Issues of Church Expansion

    Every church wants to spread their message, and after years of building the equity for your building fund, your religious institution is prepared to purchase land for your new building. A knowledgeable attorney can help you save a lot of money that comes with the legal jargon of construction costs, permit delays, unfavorable loan terms, and closing taxes. There are a litany of items that a law firm can help you with, such as:

    • Purchasing contracts.
    • Bargaining terms of a loan with lenders.
    • Filing for land use and zoning permits, along with representing your project before city commissions.
    • Outreach and management of professionals, like architects, land surveyors, and civil engineers.
    • Examining construction contracts and postponement provisions.
    • Land use tax assessments.

    Depending on where you are at in the development process, you are set on expanding a robust institution. Land and space are often a church’s biggest resources and potential revenue earners. If your church is in the process of selling land or leasing space on your property, you should square out the sums of your project team with an attorney who understands every step of the process.

    Land Use and Zoning

    When you are engaged in finding the right property for your new building or perhaps leasing space on your property, the fact is you are going to run into zoning laws in your community that can derail your project. Real estate projects enter phases that include buying, possession, financing, entitlement, development, leasing, and disposition. A law firm that has established itself within the construction industry is going to be an asset to your religious institution, along with dealing with state and local governments, neighborhood associations, and other stakeholders.  

    Among the zoning services, a knowledgeable attorney can help you with the following:

    • Appeals to the board of zoning.
    • Condominium creation.
    • Letters for or against your project to the zoning commission project.
    • Adhering to any zoning changes and litigation developments.
    • Rezoning and variances.
    • Special use permits and special exceptions.
    • Zoning and building code issues.
    • Zoning enforcement issues.

    Other services offered include:

    • Construction, contractor, and architectural deals.
    • Construction lending and funding.
    • Declarations, covenants, conditions, limitations, and easements concerns.
    • Ecological, wetland, and historic permitting and conformity.
    • Leasing, including ground leases, build-to-suit leases, space leases, subleases, sale/leaseback agreements, and synthetic leases.
    • Legal action of construction delays.
    • Public-private alliances.
    • Tax increment financing, tax credits, and tax credit syndications.
    • Tax-deferred trades.
    • Title and evaluation issues.
    • Workouts and foreclosures.

    Doing some due diligence and finding the law firm that will be a partner in the success of your church will require some time and effort, but in the end, it will be well worth the research.

    Church Law Attorneys at Anchor Legal Group, PLLC can Help Your Church Remain in Good Financial Standing

    Our church law attorneys at Anchor Legal Group, PLLC will take care of any legal issues that may arise from your religious institution being a nonprofit so that you can take care of matters of faith. If you run a church and you need legal representation, we can help you. Call us at 757-LAW-0000 or contact us online for an initial consultation. Located in Virginia Beach, we serve clients throughout Chesapeake, Norfolk, Suffolk, Portsmouth, Newport News, Hampton, and Eastern Shore, Virginia. We also serve our clients throughout the United States through our network of associated attorneys.