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Back to "Community & Associations Newsletter - November 2016"


Who owns your property if you are a Religious Community of reduced membership?

It was the case of the Pop Star, a Religious Community, the Archdiocese, and a very valuable piece of real estate.

The California Institute of the Sisters of the Most Holy and Immaculate Heart of the Blessed Virgin Mary (the Religious) were gifted a prized piece of real estate over 40 years ago and this property was used as the convent for the Religious.

With only five remaining Religious, the Archdiocese ordered them to vacate the property over 4 years ago, and the question remains who had authority to sell the property. It also raised issues at canon law in respect to the owning of church property and the interrelationship between a Congregation and the Archdiocese.

The Religious entered into negotiations and struck a deal with local restaurateur Dana Hollister, however, the Archdiocese was of the view that it had authority to sell the property and wanted to sell it to Katy Perry.

Explaining their values, the Religious announced that they did not want to sell the property to Katy Perry. The Religious were also concerned that the funds from the sale to Katy Perry would go directly to the Archdiocese, whereas the funds from the sale they brokered with Dana Hollister would be applied for the Religious’ ongoing welfare.

The Archdiocese had been supporting the dwindling numbers of their Community, for some time. This support had Vatican approval. As a result, the Archdiocese assumed that by providing financial support it also had authority to sell the Relgious’ assets without their approval.

It came down to an interpretation of a Vatican decree. The Archdiocese claimed that the Religious had no authority to enter into a deal with Dana Hollister and that only the Archdiocese had jurisdiction in this area. The civil Judge in Los Angeles relied on a Statement from the Archdiocese that there were no pending proceedings in the Vatican in respect to the dispute between the Religious and the Archdiocese and therefore annulled the deal between the Religious and Dana Hollister, paving the way for Katy Perry to secure the property. The Religious argued that the decree from the Vatican authorising the Archdiocese to sell the property was incorrectly interpreted and that despite the Court ruling, the Vatican was still determining the issue. It is still unknown whether the Religious will lodge an appeal and the prospects of success do not look likely; so at this point in time Katy Perry has successfully secured the right to acquire the property.

The case is of significant relevance for many religious congregations whose memberships are reducing, especially where the Diocese may have been called upon to support day to day living expenses of members, pending sale of assets.

Josephine Heesh, Partner
Jessica Lobow, Associate

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