Parsonage Issue

[pocadots1990]

We have bought a house and moved out of the parsonage. The church is okay with this idea. this gives them a sense of stability from the pastor.

I shared with the Trustees about using the house for missionaries and for our a youth outing. The vision the Trustees have is to rent the parsonage to someone without advertising it.

I have reservations about this idea. I don't want the church going into the Landlord business, but the big issue is to make sure the place is occupied. The thought is the house will deteriorate quicker in an unoccupied house rather than an occupied house.

Can you give me some insight of the pros and cons about renting the parsonage?

Thanks.

 

[annsni]

I believe it is illegal for the church to become a landlord. We have a parsonage that our pastor lives in and then an additional house that we use for just as you say - for missionaries who are visiting and for different activities. We HAVE had people live there on an emergency basis and once we had a family live there for about a year but the deal was that instead of rent, they were to pay the utilities and they would also do renovations while they lived there.

I'd check into the legalities of this with your lawyer. See, if it were legal, churches could go into the real estate business with their funds and make some money but I don't see ANY of them doing so.

 

[GBC Pastor]

At my previous church we moved into the church parsonage after it had been rented out for a period of about 4 years. The pastor before me had like you purchased a home in a surrounding area and wanted to move out of the parsonage. The church voted to rent out the parsonage and have an oversight committee that would essentially serve as the "landlords" for the parsonage. There was a very strict contract drawn up as part of the rental agreement that included a no alcohol and drug policy as well as a twice a year inspection of the home. How enforceable all this actually was I do not know. However, the renters they had, abided by those terms throughout. The problem came when the previous pastor left and the church then needed the parsonage for a new pastor. The family had been good renters and did not want to leave, and there was a great bit of difficulty as they worked this all out.

 

[Deacon]

I believe it is illegal for the church to become a landlord.

Nope it's not illegal but it is a bit complicated.
We have two renters on our properties and we have a missionary apartment.
There are some tax issues on the churches part.

Missionaries find it comforting to have a home-base, stocked and ready for them during various stop-overs.

But renting provides a reliable source of income.

Rob

 

[mets65]

The use of a parsonage could be a ministry in itself. For mssionaries, guests or helping families get on their feet. Especially in this economy.

 

[TomVols]

It is not "legal" per se, for a non-profit entity to engage in a profit making endeavor. You'd have to have legal counsel, get an appraisal, and find out the fair market value of the house and then rent UNDER that FMV. There is likely tax consequences. However, we all know churches that do this under the table, and they do it all over. Several things can happen:

1. You rent out to a family inside the church, they love it and care for the house, and you're all happy.
2. You do #1 but the family doesn't care for the house and the church gets ticked;
3. You rent out to a family outside the church and you get good tennants.
4. You rent out to a family outside the church and you get beer bottles in the driveway and suddenly the church gets ticked
5. You rent out to either, and someone stiffs you for a month's rent, and won't leave (seen this in more than one setting).

I could go on....my point is this: be careful. If the church is in financial need, they could sell the house (Most churches that I know of who rented ended up eventually selling). That provides a one-time shot of cash. I know of a couple of churches who financed part of their building projects by selling off the parsonage.

Yes, renting brings a trickle of cash, but you end up being a landlord, like it or not. So when Jack and Jill, your renters, need a new heat pump, the church has to vote to buy a heat pump and now what...since it's January and you've already had your business meeting. And the income is as only good as the renters.

Back to selling the house. If you have a "poison pill", that is, a dissolution clause, there is likely a recipient of the property (an association, a charity, etc). They will have to sign off on the decision to sell. This has caused a couple of problems before.

 

[SaggyWoman]

Maybe you could use it for other staff instead of the pastor.

Maybe you could use it for missionaries.

Maybe you could use it for a crisis pregnancy center?

Maybe you could use it for people getting back on their feet.

Maybe you could use it for foster care families.

Maybe you could use it as a fellowship space.

 

[pocadots1990]

My original plan is to use it as a place for missionaries to stay. The problem is, we are a small church and I usually have about 2 or 3 missionaries in a year to speak. I also wanted to use the house for a bible study and a teen activity. It has a nice back yard.

We are also tight financially and this seems to be a good way to get income.

My question is our constitution states that moneys receive is only through a freewill offering and no other way. We cannot do fund raisers to send out kids to camp. I am afraid of this being a double standard with our church.

 

[Tom Butler]

At our previous church location, the parsonage was across the street. When we relocated and built a new building, we sold the parsonage. No legal problems with that at all.

That enabled us to lend the pastor enough for a down payment on a home (to be repaid when he left for another field), and gave him a housing allowance on top of his salary. It's a win-win. We don't have to maintain the house, he builds equity.

It's a sad thing when a preacher lives in a parsonage for all his ministry, then reaches retirement age with nothing to show for it.

That said, there are a number of uses for a vacant parsonage. But TomVols has given some excellent caveats. The church has a specific commission. I'm not sure the housing business is one of them.

 

[rbell]

not worth the headache, IMHO.

If it's a house for missionaries, but missionaries are seldom in it, then it's not worth the cost & trouble.

Is the house an effective meeting space for your church?

If not, why not sell it and then there are lots of options (give money to missions, etc.).

 

[annsni]

My original plan is to use it as a place for missionaries to stay. The problem is, we are a small church and I usually have about 2 or 3 missionaries in a year to speak. I also wanted to use the house for a bible study and a teen activity. It has a nice back yard.

We are also tight financially and this seems to be a good way to get income.

My question is our constitution states that moneys receive is only through a freewill offering and no other way. We cannot do fund raisers to send out kids to camp. I am afraid of this being a double standard with our church.

This part sounds a lot like our church but it's not in the constitution but just what we've decided is wise. Hey, if God wants us to do it, He'll provide the dough. We let the congregation know the need and that's it.

Our "Hospitality House" is used as you've mentioned. It's been a great blessing for those who are coming to town for a time to have a house that they can just relax in. Oftentimes, missionaries are placed in people's homes and while that has it's benefits, as a family with kids, it also has it's drawbacks. You're ALWAYS "on" - but in a house like this, you can just kick off your shoes and relax. It's really nice.

Our hospitality house also has an outdoor chapel, volleyball and horseshoe courts and as a project for the older kids in VBS one year, they built 8 picnic tables that are there as well. We have gas grills in the garage and it's all set for any of our church groups to use for their gatherings. It's really nice!

 

[exscentric]

As one that spent five years on deputation and was VERY seldom offered even overnight accomadations, the missionary house sounds pretty good. :thumbs: (The only overnight spots were when I was at week long conferences - ONE pastor as I was loading to get to my next meeting told me he had planned for me to overnight with them but hadn't mentioned it to me till then - but had to be a nights journey away by morning soooooo.)

However if unused a lot probably not the best use of resources. Remodel a corner of the church with a room/bath or something.

 

[go2church]

My guess that you are going to run into a tax situation since the house is no longer being used for ministry purposes. Also, you need to find out about fair housing requirements in your area, there are things that can and can not be stipulated in a housing agreement. If you plan on being there awhile, I would say sell the house. It might also be used as the "salary" for a part time staff person..."we don't have a salary, but we can offer you a house to live in".

Parsonages are really an all or nothing situation, either you have one or you don't, trying to be a little pregnant seems to me to be a big ole box of headaches and regrets.