Leasing Church Property

Theology, Church Law, and Best Practices

By Rev. Luan-Vu “Lui” Tran, Ph.D.

Theology and rationale: why the Discipline treats leases seriously

United Methodists hold property “in trust for the benefit of the entire denomination,” to keep buildings aligned with the church’s mission and connectional accountability. That trust language has been part of the Discipline since 1797 and remains binding today. 

Implication: A lease is never “just a rental.” It is a missional decision that must honor the trust, the mission, and the Discipline.

Who has authority to lease property—and how approvals work

The charge (or church local) conference directs; trustees implement

The charge conference is vested with property authority and may direct the trustees, who remain subject to the charge conference. Trustees have supervision and care of property, but within the limits of the Discipline. 

Which approval path applies to your church?

Unincorporated local church (¶2540)

• Action requires:
  1. 10-day notice from the pulpit and in the church’s regular communications;
  2. Majority vote of the charge conference on a resolution to lease;
  3. Written consent of the pastor and the district superintendent affixed to the lease instrument;
  4. Lease rules apply to any term 30+ days and to short terms consecutive with the same lessee.  

Incorporated local church (¶2541)

• Action requires:
  1. 10-day notice to members of the corporate body (i.e., charge-conference members);
  2. Majority vote of the corporate body (and the charge conference, if different);
  3. Written consent of the pastor and DS (affixed to the instrument);
  4. Lease threshold is the same (30+ days or consecutive short terms with the same lessee).   

Note: Before consenting, the pastor, DS, and the district board of church location and building ensure due diligence and missional alignment; DS certification is conclusive evidence of conformity with the Discipline.   

Who signs the lease?

• Unincorporated: any two trustees, unless the charge conference directs otherwise. 
• Incorporated: any two corporate officers. 

What counts as a “lease” under the Discipline?

Both ¶2540 (unincorporated) and ¶2541 (incorporated) state that a lease of 30 days or more is covered—and that even less-than-30-day agreements are treated as leases if they are consecutive with the same lessee. Don’t try to “string together” short bookings to avoid approvals.  

Shared-space ministry: covenant, not profit

When both congregations are United Methodist (¶2551.1):

• Use a written covenant approved by the charge conference(s).
• The relationship should not require rent and is not intended to generate profit (cost-sharing for appropriate operating costs is fine).
• The DS must be involved in consultation as needed.   

When sharing with another denomination (¶2551.2):

• Negotiate a written property-use agreement in accordance with ¶2503 (trust clause);
• Obtain DS consent and charge/church-conference approval;
• Establish clear processes for scheduling, conflict resolution, and termination.  

Drafting the document: what every lease (or use agreement) should cover

Form matters. Use a Lease when the occupant will have exclusive possession for a term; use a Property-Use Agreement (license) for shared, non-exclusive, programmatic use—especially in UMC–UMC settings where the goal is covenantal collaboration rather than rent.

Core provisions to include:

• Parties & premises. Identify legal entities; include a floor plan/schedule attachment.
• Purpose & permitted use. Tie use to purposes “consonant with the mission” and the Discipline (trust-clause alignment). 
• Term & scheduling. Spell out term, renewal, church-priority scheduling for worship/high holy days, funerals, and conference-level events.
• Compliance with church law. State that the agreement is subject to the Book of Discipline, including the trust clause (¶2501) and any required consents/approvals. 
• Insurance & risk. Require commercial general liability, workers’ comp (as applicable), additional-insured status for the church, and certificates before occupancy; align with trustees’ duty to carry and track adequate insurance. 
• Indemnification & hold-harmless. Tailor to your state law; require tenant to indemnify the church for claims arising from the tenant’s activities.
• Child & youth safety. Require adherence to the church’s Safe Sanctuaries/child-protection policy, background checks, supervision ratios, and mandatory-reporting compliance when minors are present. (Best practice under UMC polity for child care ministries.)
• Codes, accessibility, and energy stewardship. Obligate compliance with fire/building codes and accessibilityexpectations; encourage or require energy-efficient practices in line with church stewardship standards.  
• Maintenance & alterations. Define routine maintenance vs. capital repairs; prohibit alterations without written trustee consent; clarify restoration on exit.
• Utilities & cost-sharing. Metering or allocation method; custodial fees; trash/recycling; HVAC hours; after-hours surcharges if needed.
• Security & keys. Access control, alarms, key cards; who can be on site and when.
• Signage & communications. Permit sensible on-site signage; forbid implying the tenant is a United Methodist ministry unless authorized.
• Prohibited uses. Ban activities inconsistent with UMC doctrine/mission or that jeopardize tax exemption or insurance.
• Financial terms. If UMC–UMC, remember the covenant is not rent/profit-generating beyond appropriate operating costs. If non-UMC, charge fair terms consistent with mission and law (mind local property-tax and UBIT risks; consult counsel/CPA). 
• Default & termination. Include cure periods; allow termination for mission conflicts, safety, nonpayment, or insurance lapses; provide a pastoral/DS consult step for disputes in shared-ministry settings. 

Approvals and timeline: a checklist you can follow

• Discern mission fit (trust clause; program impact). 
• Consult DS early; where appropriate, brief the district board of church location & building. 
• Draft the lease/use agreement with the required trust-clause alignment and risk provisions.
• Give 10-day notice of the charge (or church local) conference meeting.  
• Adopt a resolution authorizing the lease by majority vote.  
• Obtain written consents of pastor and DS; affix them to the lease.  
• Execute the instrument (two trustees for unincorporated; two corporate officers for incorporated).  
• File and retain the fully executed agreement and insurance certificates with the custodian of legal papers and in the trustees’ records. 

Frequently misunderstood points (Myths vs. Discipline)

• “Short bookings avoid approvals.” Not if they’re consecutive with the same lessee—they’re treated as a lease.  
• “The church council can okay it.” Property decisions rest with the charge (or church local) conference, with trustees acting under that direction. 
• “Once the vote happens, we can sign.” Not until pastor and DS have provided written consent and it’s affixed to the instrument. 
• “UMC–UMC space sharing should produce rent revenue.” The Discipline treats it as covenantal, not profit-making; cost-sharing for operating expenses is appropriate. 

Sample mini-clauses you can adapt (illustrative only)

Mission & Discipline: “Use of the Premises shall at all times be consonant with the mission of The United Methodist Church and subject to the Book of Discipline, including the trust-clause requirements.” 

Insurance: “Prior to occupancy and throughout the Term, Licensee/Tenant shall maintain commercial general liability insurance and, where applicable, workers’ compensation; name the Church as additional insured; and provide certificates of insurance on request.” 

Child Safety: “Any activities involving minors shall comply with the Church’s Safe Sanctuaries/child-protection policies, including screening, background checks, and supervision ratios.”

Scheduling Priority: “Church worship, funerals, and conference-level events have priority; Church will provide reasonable notice and will coordinate in good faith with Licensee/Tenant.”

Energy & Accessibility: “Licensee/Tenant shall comply with applicable fire/building/accessibility codes and cooperate with the Church’s energy-efficiency and accessibility initiatives.”  

(Consult a qualified attorney in your jurisdiction to adapt language to local law and your conference’s risk standards.)

District and conference property (special note)

For district property, leases exceeding 20 years (and any sale/transfer or mortgage) require DS consent and a conformity determination; execution is by two corporate or board officers. 

Lease like stewards, not landlords

Leasing church space is a ministry decision framed by trust, mission, and law. The Discipline gives a clear path—notice, charge conference action, pastoral/DS consent, and proper execution—so that every agreement advances the Church’s mission, protects the connection, and manages risk wisely. When you honor these steps, you do more than comply: you practice connectional stewardship that serves your neighbors and safeguards the witness of your congregation.