Only a legal entity can own property i.e. an individual, named individuals, or an incorporated “company”. The problem for most churches is that they are none of these!
The solution is to set up a “trust” arrangement whereby a legal entity owns the property & agrees to hold it for the church.
Historically, churches would rely on a group of people to act as trustees, i.e. “Tom & Sam & John own this property in trust for xyz church.”
In 1930, the Baptist Union of Victoria was incorporated by an Act of Parliament. This means it was now a legal entity that could own property and hold property in trust for the churches. Over time, churches transferred their property from to the BUV to be held in trust for them, and Trust Deeds were drawn up.
The advantages of the BUV holding the property in trust as opposed to individuals is:
Schedule B restrictions on property are designed to ensure that the fruit of the labours of past generations is protected from misuse by the current generation in order to ensure provision of property for future generations. In short, the intention is to hold these assets in perpetuity.
Currently only three of the BUV churches own property directly or have it held by trustees other than the BUV. Even those churches that have incorporated in their own right still have property held under Schedule B trust.
A trustee’s primary responsibility is to uphold the intent of the trust – the BUV Secretary & Executive Council are responsible to ensure trust requirements (as defined in Schedule B) are upheld.
For this reason, churches dealing in property matters often have to involve the BUV.
What does this mean for the church? How are they obligated or restricted when it comes to use of their property?
All property purchased by a church in the name of BUV is immediately subject to Schedule B unless written agreement is reached in advance of the purchase.
All property remains subject to Schedule B until sold, at which point the funds from the sale are held in trust by the BUV. The church can use the interest generated by the funds for whatever purposes they deem appropriate, but the principal amount remains subject to Schedule B forever. If the church officially closes, the BUV Advancement Fund becomes the owner of the property or the proceeds of a property.