Religious corporations: Sales, mortgages, leases, and other

Religious corporations:

Sales, mortgages, leases,

and other dispositions

of real property

Ofﬁce of the New York State

Attorney General Letitia James

Charities Bureau guidance document | Issued: July 2018, Revised: November 2023

Ofﬁce of the New York State Attorney General | Charities Bureau

Table of Contents

Getting started: Checklist for petitions .........................................................................................................3

Introduction ........................................................................................................................................................... 5

How to submit a transaction to the Ofﬁce of the New York State Attorney General (OAG) ..........7

What transactions by religious corporations are covered by RCL § 12? ...........................................................7

What transactions are not covered? ...................................................................................................................7

Role of the Attorney General.............................................................................................................................8

Statutory standard .............................................................................................................................................. 10

Preparation for the transaction ......................................................................................................................... 10

Preparation to petition for approval of a transaction ..................................................................................... 14

Verified petition for Attorney General or court approval ................................................................................. 16

Requirements for court order or Attorney General approval ......................................................................... 16

Conclusion .............................................................................................................................................................21

Appendix A: Sample petition for court approval of real property transactions ............................ 22

Appendix B: Sample petition for Attorney General approval of real property transaction .......24

Appendix C: Sample court order approving real property transaction ............................................26

Appendix D: Sample Attorney Genera’s approval of real property transaction ............................29

Appendix E: Principal and regional ofﬁces of New York State Attorney General

and covered counties ........................................................................................................................................32

Notes ......................................................................................................................................................................34

Ofﬁce of the New York State Attorney General | Charities Bureau

Religious corporations: Sales, mortgages, leases, and

other dispositions of real property, pursuant to Religious

Corporations Law (RCL) § 12 and Not-for-Proﬁt Corporation

Law (NPCL) §§ 510, 511, and 511-a

Getting started: Checklist for petitions

The Charities Bureau of the Ofﬁce of the New York State Attorney General (OAG) has prepared the following

checklists to help petitioners prepare their documents for submission to the Attorney General or to the

supreme court in the appropriate county on notice to the Attorney General.

Veriﬁed petition to the Attorney General or to the appropriate supreme court

Petition

Verification of petition

Attachments to veriﬁed petition

Copy of the corporation's Certificate of Incorporation and any amendments as filed

Copy of the corporation's current bylaws or constitution certified by the corporation’s secretary

Copy of the deed to any real property that is the subject of the transaction

Copy of the contract of sale, lease, or mortgage commitment

If the contract or lease has been or will be assigned, a copy of the assignment agreement

If the corporation seeks to use the proceeds to purchase or lease new premises, a copy of that contract

or lease

If the corporation intends to use any of the proceeds to pay existing commitments or debts, as well as

closing costs, copies of the evidence of the commitments or debts (invoices, executed notes, etc.), and

closing costs (proposed pre-closing settlement statement, invoices for broker fees, legal fees, etc.) (see

section on “Verified petition to the Attorney General or to the court”)

Copy of the appraisal, which must comply with the Attorney General’s appraisal guidance (see section

on “Fair and reasonable consideration: appraisals”)

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Copy of the corporation’s annual financial report or audited financial statements for its most recently

completed fiscal year and interim financial report for the year to date. If not reflected in the financial

statements, a schedule of existing debts and liabilities (amount, owed to whom, overdue status,

secured status). A corporation that does not prepare annual financial reports must submit, at a

minimum, a statement of the corporation’s assets and liabilities for its most recently completed fiscal

year (a “balance sheet”) and a statement of its income and expenses for its most recently completed

fiscal year, both certified by the corporation’s treasurer (see section on “Verified petition to the Attorney

General or to the court”).

Copy of the resolution of the board, certified by the corporation’s secretary, authorizing or approving

(or, if the corporation has voting members, recommending to the members) the key terms and

conditions of the proposed transaction and the specific use or uses of the proceeds, and stating that

the transaction was approved by the board at a duly called and held meeting of the board at which

a quorum was present; the date of such meeting; the total number of directors on such date; the

number of directors present at the meeting; the number of votes for and against the resolution and any

abstentions; and the number of board members constituting a quorum (see section on “Approval of the

transaction by the board and approval of the transaction by members”)

Copy of the resolution of the members of the corporation, certified by the corporation's secretary,

approving the key terms and conditions of the transaction and the specific use or uses of the proceeds

and stating that the transaction was approved by the members at a duly called and held meeting of

members at which a quorum was present; the date of such meeting; the total number of members

entitled to vote on such date; the number of voting members present at the meeting; the number of

votes for and against the resolution and any abstention and the number of members constituting a

quorum, see “Approval of the transaction by members”)

Copy of approval of any denominational or other governing authority if required for the proposed

transaction

Copy of approval of any government agency required for the proposed transaction

Approval of the Attorney General or order of the court

If the court’s approval is sought, a proposed order (see Appendix D)

If the Attorney General's approval is sought, a proposed Attorney General approval (see Appendix E)

Ofﬁce of the New York State Attorney General | Charities Bureau

Introduction

This guidance is not a substitute for legal advice from a corporation’s attorney. The Charities Bureau of OAG

has prepared this guidance to assist religious corporations and the lawyers who represent them when seeking

approval of the Attorney General or the Court for sales, mortgages, and leases of their real property pursuant

to Religious Corporations Law (RCL) § 12 and Not-for-Proﬁt Corporation Law (N-PCL) §§ 510, 511, and 511-a.

N-PCL §§ 510, 511, and 511-a, set forth procedures for transferring the assets of not-for-proﬁt corporations

(“corporations”) and provide certain protections against the inappropriate transfer of assets of these

corporations. These procedures include internal procedural rules for authorizing transfers. Because these

corporations hold an important and unique role and responsibility in the lives of our citizens and communities,

and because they hold legal responsibility to safeguard their assets and provide for the interests of their

members and beneﬁciaries, the law also requires the court’s or the Attorney General’s approval of certain

transactions by these corporations.

A religious corporation generally may not sell or mortgage any of its real property or lease any of its

real property for a term exceeding ﬁve years without applying to and obtaining leave of the court or the

Attorney General pursuant to N-PCL §§ 511 or 511-a (RCL § 12(1)).

As more fully described in later sections, in

an application solely to the Attorney General, the Attorney General may determine that court review of a

particular application is appropriate. In such cases, the veriﬁed petition must be submitted to the court and

on notice to the Attorney General by the petitioner, even though court approval is sought. The Attorney

General may issue a “no objection” endorsement in such circumstances or may ﬁle objections to the

transaction if all matters of concern to the Attorney General have not been resolved.

NOTE: The following denominations are exempt from submitting their petitions to the

Attorney General. However, they are required to seek supreme court approval for such

transactions in the appropriate county (RCL §2-b(d-1)):

Protestant Episcopal Church

Roman Catholic Church

Ruthenian Catholic Church of the Greek Rite

African Methodist Episcopal Zion Church

Presbyterian Church of the General

Assembly of the Presbyterian Church USA

United Methodist Church

Reformed Church of the General Synods of

the Reformed Church in America

Ofﬁce of the New York State Attorney General | Charities Bureau

The information in this guidance is general in nature. Each transaction is governed by its own facts, and

the Attorney General’s Charities Bureau reviews each one on a case-by-case basis. We encourage you to

discuss any proposed transaction in advance with OAG’s Charities Bureau in New York City or Albany, or with

an Assistant Attorney General in the OAG Regional Ofﬁce to which you will submit your application. A list

of the ofﬁces of the Attorney General, their contact information, and the New York counties they serve is in

Appendix E. Email your questions to [email protected]y.gov.

NOTE: This guidance addresses transactions involving real property. If a religious corporation intends to

sell or otherwise dispose of all or substantially all of its assets, regardless of their form, including intangible

property such as bonds, stocks or certiﬁcates of deposit, consult RCL Article 2-b.

Quick statutory reference guide

Sale, mortgage, and lease of real property of

religious corporations

RCL § 12

Disposition of all or substantially all assets

Petition for court approval

Petition for Attorney General approval

N-PCL § 510

N-PCL § 511

N-PCL § 511-a

Application of N-PCL

N-PCL § 103; RCL §2-b

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How to submit a transaction to OAG

If the petitioner’s principal ofﬁce or place of business is located in the following counties, submit the petition

for approval to transfer to the Charities Bureau at ﬁ[email protected]y.gov. If you require a hard copy of

the petition, your counsel will be advised by the assigned assistant attorney general:

If you are submitting a petition to an OAG Regional Ofﬁce, submit it directly to the Regional Ofﬁce that serves

the relevant county. For a listing of those ofﬁces, their contact information, and the counties they serve, see

ag.ny.gov/regional-ofﬁce-contact-information or Appendix E.

What transactions by religious corporations are covered by RCL § 12?

A lease for more than ﬁve years, or a sale, mortgage, exchange, or other disposition of the real property of a

religious corporation requires approval of the Attorney General or the court pursuant to the procedures in RCL

§ 12 and N-PCL §§ 510, 511, and 511-a.

Transactions by foreign corporations that do business in New York are also covered in N-PCL § 103.

What transactions are not covered?

Purchase money mortgages (acquisition mortgages taken out at the time of purchase and secured by the

new property, as distinguished from mortgages on currently owned property) are not subject to review by

the Attorney General (or the court) unless the mortgage encumbers other property already owned by the

petitioner. Other transactions that do not require Attorney General or court review include purchase money

security agreements and real property acquired as a result of a mortgage foreclosure proceeding, or by a

deed in lieu of the foreclosure, of a mortgage owned by the religious corporation acquiring the real property

(N-PCL §§ 510, 511 or 511-a. RCL §§ 12(1), and § 12(10)). In addition, as previously noted, only supreme court

approval is required for transactions by the religious denominations listed in the box on page 5.

Albany

Bronx

Columbia

Fulton

Greene

Hamilton

Kings

Montgomery

New York

Queens

Rensselaer

Richmond

Saratoga

Schenectady

Schoharie

Warren

Washington

Ofﬁce of the New York State Attorney General | Charities Bureau

Role of the Attorney General

N-PCL and RCL authorize religious corporations seeking to sell, mortgage, lease for a term exceeding ﬁve

years, or otherwise dispose of their real property to submit a veriﬁed petition for approval of such transaction

to either the Attorney General or to the supreme court, on notice by the petitioner to the Attorney General

(RCL § 12 and N-PCL §§ 511 and 511-a). N-PCL § 511 governs petitions submitted for court approval and N-PCL §

511-a governs petitions submitted for Attorney General administrative approval. The corporation generally

may choose whether to ﬁle its petition pursuant to N-PCL § 511 or § 511-a, except in any of the following

circumstances:

 The corporation is insolvent or would become insolvent as a result of the transaction and, therefore,

must proceed on notice to creditors under N-PCL § 511(c).

 The corporation is conveying all or any part of its real property to another religious corporation or to a

membership, educational, municipal, or other nonprofit corporation for nominal consideration, which,

pursuant to RCL § 12(8), must be approved by the court.

 The corporation is seeking confirmation of a conveyance, mortgage, or lease for a term exceeding

five years previously made by the corporation without first obtaining either court or Attorney General

approval, which, pursuant to RCL § 12(9), must be approved by the court.

 The Attorney General, in its discretion, concludes that court review of the petition is appropriate (N-PCL

§ 511-a (a) and (d)).

In some circumstances, the Attorney General may determine that it is appropriate to obtain court approval,

on notice to the Attorney General, rather than administrative approval if:

The Attorney General has received complaints or objections from members, creditors of the corporation, or

other interested persons who are entitled to be notiﬁed pursuant to N-PCL § 511(b).

The Attorney General has objections to the transaction that have not been resolved after discussion.

In addition, there may be circumstances when the Attorney General has no objection to a transaction but

determines that review by the court is appropriate. These circumstances, include transactions that are

unusually complex or that will have an impact on the public.

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For information and representations that must be included in a veriﬁed petition pursuant to N-PCL §§ 511

and 511-a, see pages 15-19 of this document. For a checklist of necessary documents to request approval of a

transaction, see pages 3-4. For useful sample documents, see:

 Appendix B – sample petition to the court

 Appendix C – sample petition to the Attorney General

 Appendix D – sample court order

 Appendix E – sample Attorney General approval

When seeking court approval, ﬁle the petition in the supreme court of the judicial district where the

corporation has its ofﬁce or the principal place of carrying out the purposes for which it was formed (N-PCL

§ 511(a)). N-PCL requires that, upon ﬁling the veriﬁed petition with the court, the Attorney General be given

a minimum of 15 days’ notice before a hearing on the application (N-PCL § 511). However, the procedure

preferred by the Charities Bureau and most courts is to submit a veriﬁed petition and proposed order to

the Attorney General for review before ﬁling with the court. Please submit this petition and order in draft

form with tabs to identify exhibits. This procedure enables the Attorney General to review the papers to ensure

that all statutory requirements are met, all necessary documents are included as exhibits, and any concerns

of the Attorney General are resolved before submission to the court.

When an application is to the court on notice to the Attorney General and the Attorney General has no

objection to the transaction, OAG will provide the petitioner with a “no objection” endorsement. Such

endorsement, typically provided in a letter to the petitioner or stamped on the proposed order approving the

transaction, waives statutory service of the petition since the papers have already been submitted to and

reviewed by OAG. The signed petition, which must be exactly the same as the ﬁnal draft petition and include

exactly the same exhibits reviewed by the Attorney General, may then be submitted to the court. If a hearing

or other court proceeding is subsequently scheduled, the petitioner must give notice of such proceeding to the

Attorney General. In addition, a copy of the ﬁnal order, when signed by the judge, must be submitted to the

Attorney General.

If the Attorney General has objections to the transaction that have not been resolved through discussion and

does not provide a “no objection” endorsement, the corporation may still apply to the supreme court for an

order approving the transaction, but such application must be on notice to the Attorney General.

If the Attorney General approves a petition requesting Attorney General approval, OAG will sign an approval

that speciﬁes the terms of the transaction and approves the transaction on those terms. If the Attorney

General does not approve such a petition, the corporation may apply to the supreme court, on notice to the

Attorney General, for an order approving the transaction. Here again, the Attorney General will appear in the

proceeding and advise the court of the Attorney General’s objections to the transaction.

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Statutory standard

N-PCL (N-PCL §§ 511(d) and 511-a(c)) have a two-prong test:

 The consideration and the terms of the transaction are fair and reasonable to the corporation.

 The purposes of the corporation or the interests of its members will be promoted by the transaction.

These statutory standards and other statutory requirements are discussed more fully in following sections.

Preparation for a transaction

Preparing the contract of sale or lease

Whether the petitioner decides to seek approval from the Attorney General or from the court, ensure that the

contract for the sale or lease of the property is contingent upon the approval of either the Attorney General or

the supreme court in the appropriate county. The contract or lease should explicitly provide that, if neither the

Attorney General nor the court grants the corporation’s application seeking such approval, then:

 Neither party has any further rights or obligations under the contract of sale or lease other than the

corporation’s return of any down payment to the purchaser or lessee.

 No damages are owed to the purchaser or lessee.

 The purchaser or lessee will not sue for specific performance.

The contract or lease should also provide that no lien against the property is created by the execution of the

contract or lease and acceptance of the deposit, and that the purchaser or lessee waives any right to place

a lien against the property. This will protect the corporation since the sale or lease of the property may take

place only if it is approved by the Attorney General or court on notice to the Attorney General.

If the contract of sale or lease allows the purchaser or lessee to assign its rights under the contract or lease,

and the contract or lease has been assigned or will be assigned prior to closing, the assignment agreement

must be attached as an exhibit to the petition. If the contract or lease allows the purchaser or lessee to

assign its rights under the contract or lease, but the purchaser or lessee has not entered into an assignment

agreement by the time the Attorney General issues its approval or “no objection” to the proposed transaction,

the Attorney General will require that such OAG approval or proposed court order authorize the transfer or

lease of the, property only to the purchaser or lessee identiﬁed in the contract or lease (not to the purchaser’s

or lessee’s assignee). The Attorney General will also require that any assignment by purchaser or lessee prior

to closing will also require approval of the Attorney General or the court on notice to the Attorney General.

The Attorney General will not agree to assignments by the purchaser or lessee for additional consideration,

commonly referred to as “ﬂips.”

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Approval of the transaction by the board

The board of directors or trustees must approve the transaction, and, if there are members entitled to vote

(see “Approval of the transaction by members”), the board must adopt a resolution recommending the

transaction. A vote of at least two-thirds of the corporation’s entire board is required, unless the board has

21 or more directors, in which case a vote of a majority of the entire board is sufﬁcient. If a corporation’s

certiﬁcate of incorporation or bylaws provide for greater quorum or voting requirements, the corporation

should comply with those requirements in approving the transaction. The board resolution must then be

submitted to a vote of the members entitled to vote on it, at an annual or special meeting of members (N-PCL

§§ 510(a)(1) and 603).

The resolution must specify all of the following (N-PCL §§ 510(a)(1) and (2)):

 the terms and conditions of the proposed transaction, including the anticipated consideration to be

received by the corporation

 the eventual use of the proceeds of the transaction by the corporation

 a statement as to whether or not dissolution of the corporation is contemplated

If the corporation has members with voting rights, the board resolution should also recommend the proposed

transaction to the members.

The terms and conditions that are spelled out in the resolution, and that should be included in the petition,

should include, at a minimum:

 names of the parties

 real property that is the subject of the transaction

 consideration to be received, and how and when it will be delivered

 any other key terms of the proposed transaction

For a mortgage transaction, disclose:

 name of the lender

 amount and term of the loan

 amortization

 interest rate

 security for the loan

 any other key terms of the proposed transaction

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For a lease transaction, disclose:

 name of the lessee

 term of the lease

 rent to be received

 any other key terms of the proposed transaction

It is not sufﬁcient to provide a resolution that only authorizes the corporation to sell, mortgage, lease, or

otherwise dispose of the property (or to sell, lease, or transfer the property at a minimum price or rent or

mortgage the property at a maximum loan amount and interest rate) (N-PCL § 510(a)).

The resolution must also include speciﬁc information as to how the proceeds of the transaction, e.g., sale

proceeds, loan proceeds, or rent received, will be used. As all religious corporations are required by law to

use their assets for their religious and charitable purposes, to simply state that the proceeds will be used in

furtherance of the corporation’s religious and charitable purposes is not sufﬁcient. The resolution should

reﬂect the board’s consideration and approval of, or recommendation to the members, regarding the

programs, activities, initiatives, and other needs of the corporation for which the proceeds are to be used. If

a portion of the proceeds will be used to pay speciﬁc liabilities of the corporation, such as mortgage loans or

other liens, or judgments, or repayments of loans from board members, ofﬁcers, members of the corporation,

or other related parties, such use of the proceeds should also be detailed in the resolution (sufﬁcient back-up

documentation for such repayments will be required).

If the transaction involves a sale, transfer, lease, or mortgage to a "related party" as deﬁned in N-PCL §

102(23), the corporation must follow the procedures described in N-PCL § 715, including ensuring that the

transaction is in the best interest of, and fair and reasonable to, the corporation and that any ofﬁcer, director

or trustee, or key person who has an interest in the transaction discloses the facts of that interest (N-PCL §§

102(23), 102(25), and 715).

Where an ofﬁcer, director or trustee, or key person or his or her relative has such an interest, the ofﬁcer,

director or trustee, or key person (or any of their relatives serving on the board) must not participate in

board deliberations or votes in considering or approving the action. In addition, in certain circumstances,

the board must explicitly consider reasonable alternatives to the transaction. Any abstention of an ofﬁcer,

director or trustee, or key person, and the consideration of reasonable alternatives to the transaction, must be

documented in the minutes of the board meetings. Corporations planning a transaction should review and

assess their compliance with the requirements of N-PCL before entering into the transaction (N-PCL § 715).

Ofﬁce of the New York State Attorney General | Charities Bureau

Approval of the transaction by members

RCL requires some religious corporations to have their congregations approve transactions. This is

because RCL provides that many religious denominations have members with voting rights and, in some

cases, includes the corporation’s congregation in the membership. In many cases, RCL requires the voting

membership to approve the transaction and use of proceeds, even if the organization’s governing

documents do not. In this context, the corporation’s voting “members” means the religious corporation’s

congregation, even if the governing documents of the corporation state otherwise. For example, religious

corporations incorporated under RCL Articles 7, 8, and 10 must obtain their congregations’ approval.

Each member of the corporation is entitled to notice of the meeting at which voting on the proposed

transaction takes place. Consult the applicable sections of RCL, as well as the corporation’s certiﬁcate of

incorporation and bylaws, regarding the notice and quorum requirements for voting members for the

purposes of the approval. See, RCL §§ 133, 163, and 194 for notice requirements for annual and special

meetings of members. See, RCL §§ 134, 164, and 195 (minimum quorum requirement of six voting members for

certain denominations listed therein, unless a greater quorum is set by the religious corporation’s governing

documents).

Members of Jewish religious corporations are permitted to vote by proxy if the corporation’s bylaws or

certiﬁcate of incorporation permits proxy voting (N-PCL § 609 and RCL § 207).

Members may approve the proposed transaction according to the terms of the board resolution or authorize

the board to modify the terms and conditions of the proposed transaction, by a two-thirds vote of the

members present at the meeting, provided that the number of afﬁrmative votes is at least equal to the

quorum (N-PCL §§ 510(a)(1) and 613(c)). If a corporation’s certiﬁcate of incorporation or bylaws provide for

greater quorum or voting requirements, the corporation should comply with those requirements in approving

the transaction.

Approval of the transaction by a governing or administrative body

If the corporation’s denomination requires the consent or approval of a governing or advisory body, such as a

consistory, synod, or bishop’s council, the petition must afﬁrm that such consent was provided, and a copy of

the consent must be attached as an exhibit. If no such approval is required, a statement to that effect must be

included.

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Preparation to petition for approval of a transaction

Fair and reasonable consideration: Appraisals

In preparing to petition for approval of a transaction, the corporation must determine that the proposed

consideration is fair and reasonable. To do so, the corporation must secure an independent appraisal of the

real property that is the subject of the transaction. Either the corporation or the corporation’s attorney should

retain the independent appraiser. The corporation should pay the appraiser’s fee.

An appraisal prepared for

the purchaser or for the purchaser’s attorney is not acceptable.

Although the statute does not explicitly require an appraisal, court decisions have established that fair market

value can best be determined by means of an appraisal, and the court and the Attorney General will generally

reject the petition if it is not supported by an appraisal. The appraisal must be performed by an appraiser

who is certiﬁed or licensed to appraise the type of real property being appraised and who is completely

independent of both buyer and seller. A real estate agent or broker involved in the sale or lease of the property

may not do the appraisal. A real estate agent or broker “fair market assessment” of a property is not the

same as an appraisal.

An appraisal is not necessary where a solvent religious corporation seeks to convey real property to another

religious corporation or to a membership, educational, municipal, or not-for-proﬁt corporation for nominal

consideration (RCL § 12(8)).

The appraisal, which should be done no more than 12 months before the date of the contract, should be

based on at least three comparable sales, unless a different valuation method is more appropriate. The

comparable sales described in the appraisal should have closed no more than 12 months before the date

of the appraisal. If comparable sales prior that date are used, the appraiser should include a statement

explaining why those comparable sales were chosen, whether or not more recent sales are available and,

if so, why the appraiser did not use those sales. If an appraisal was not done before the contract of sale

was executed, the appraisal should value the property as of the execution date of the contract and include

comparable sales that closed within 12 months prior to such date. For detailed information on the Attorney

General’s requirements for appraisals, see Guidance on Appraisals of Property for Not-for-Proﬁt and Religious

Corporations Seeking Approval of Property Transactions by the Attorney General or the Court at:

https://ag.ny.gov/sites/default/ﬁles/regulatory-documents/AppraisalGuidance.pdf

For all appraisals using the comparable-sales approach, the appraisal should evaluate the development

rights zoned for the property (a full ﬂoor-area-ratio (FAR) analysis) and should consider the value of such

development rights in reaching the value conclusion, whether the property is vacant or contains a building.

The comparable sales described in the appraisal should be sales of vacant land or sales of improved property

sold for development.

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If the transaction is not an arm’s-length transaction (i.e., if it involves a sale or transfer to a director, ofﬁcer,

employee, or other person with some connection to the corporation), the Attorney General may require two

appraisals.

Fair and reasonable consideration: non-cash consideration

Any non-cash consideration that the corporation will receive in the transaction requires conﬁrmation of value.

Such conﬁrmation may be by submission of the proposed development budget indicating the approximate

hard and soft costs associated with the construction of the overall project, together with an itemized budget

speciﬁc to the in-kind consideration to be received by the corporation, such as a new house of worship.

Non-cash consideration may also include, but is not limited to, anticipated future payments based on a

partnership or joint venture interest. The value of any future payments, including ground-lease payments,

should be analyzed showing the net present value using an appropriate discount rate. Please note that

anticipated future payments resulting from a joint-venture or partnership arrangement are considered

speculative and should not form the basis of a seller’s fair and reasonable consideration analysis.

The Attorney General does not look favorably on transactions in which the consideration to be received by the

religious corporation includes a promissory note or purchase money mortgage from a for-proﬁt entity.

Fair and reasonable consideration: Security

If the corporation is entering into a development transaction in which the purchaser or a third-party plans to

build and deliver a facility for the seller as “in-kind” consideration, it must document adequate security and

assurances as evidence. Such security and assurances can take the form of escrow arrangements, restrictive

covenants that run with the land, guaranties, letters of credit, performance bonds, or construction timetables

with default provisions together with adequate remedies, as well as appropriate provision for worship during

construction. In addition, the contract of sale should make it clear that the corporation will not transfer title

to its property unless and until the purchaser or appropriate third party has secured ﬁnancing adequate

to complete the entire project. If such a condition precedent is not included in the original contract of sale,

the Attorney General will ask that the contract be amended. The Attorney General will ask that any “soft-

commitment” letters or other evidence of adequate ﬁnancing be included in the petition.

Option contracts

The Charities Bureau discourages the use of option or other contingent contracts by religious corporations,

especially if they may be exercised over a long term. These contracts require Attorney General or court

approval at the time the option is exercised.

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Itemized closing costs and use of proceeds of a transaction

An itemized list of closing costs should be included in the petition and an approximate net proceeds amount

calculated. Attorney’s fees associated with the transaction and how they will be paid must be disclosed.

The use of the proceeds must be consistent with the corporation’s purposes. The board, and members if the

corporation has members entitled to vote, should determine with some speciﬁcity how the net proceeds will

be used (see previous section, “Approval of the transaction by the board”). Proceeds cannot be used for the

personal beneﬁt of a director, ofﬁcer, employee, member, or other related or interested party. The Attorney

General will require appropriate back-up documentation for the repayment of any debt or liability of the

corporation. In certain circumstances, OAG may request afﬁdavits from the prospective payee (see bulleted

point discussion beginning on page 18 and in endnote 4.)

Escrowing transaction proceeds

If the property being sold is the religious corporation’s house of worship and if the corporation has not yet

entered into a contract to purchase or lease new premises by the sale date, the Attorney General will require,

as a condition of approval, that the sale proceeds be placed in escrow with the corporation’s counsel, the

title company, or a third-party trust institution. This helps ensure that funds will be available to obtain a new

premises so that the corporation can continue to carry out its corporate purposes. The Attorney General may

also ask that proceeds from a transaction be escrowed in other circumstances. Either Attorney General or

court approval will be required to release the escrowed funds.

Veriﬁed petition for Attorney General or court approval

N-PCL requires that religious corporations seeking to sell, mortgage, lease for a term of more than ﬁve

years, exchange, or otherwise dispose of its real property must seek approval of the Attorney General or the

supreme court in the appropriate county (N-PCL § 510(a)(3)). A request for approval of such a transaction

must be in the form of a veriﬁed petition to the Attorney General, or to the court on notice to the Attorney

General (see previous section, “Role of the Attorney General”).

Upon the Attorney General’s receipt of a veriﬁed petition containing all required exhibits, the petition will

be assigned to an Assistant Attorney General (AAG) for review. The individual who submitted the petition

on behalf of the corporation will receive an email or letter from the Attorney General’s Ofﬁce identifying

the AAG assigned to review the matter and noting the anticipated amount of time it will take to review the

petition. After reviewing the petition, the AAG will reach out to the corporation’s attorney or other designated

representative to discuss any questions, concerns, or requests for additional information or documentation

related to the petition.

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Submitting an incomplete petition delays the review process and may result in the petition being rejected and

returned with a notice to resubmit the petition when complete.

The following summary lists the information and documentation that must be included in a veriﬁed petition.

As previously noted, each transaction is governed by its own facts, and the Attorney General reviews each on

a case-by-case basis. In addition, an AAG may require additional information and documentation not listed in

the following section to determine whether the speciﬁc transaction under review meets the statutory standard

for approval under N-PCL §§ 511 and 511-a.

Contents of a veriﬁed petition to the Attorney General or the court

A veriﬁed petition to the Attorney General or the court must include the following information:

 The name of the corporation, as it appears on its certificate of incorporation or an amendment (N-PCL

§ 511(a)(1)). The address of the corporation's principal location

 A copy of the certificate of incorporation and all amendments, and a copy of the corporation's bylaws,

certified by the secretary, must be attached as exhibits

 The section of the law under which the corporation was incorporated (N-PCL § 511(a)(1))

 The names of the corporation's directors or trustees and principal officers, and their home addresses

(N-PCL § 511(a)(2))

 A description of the corporation's activities. Include a statement of the activities and programs that the

corporation currently carries out, not just its purposes as stated in the corporate documents and include

a statement about where the corporation conducts its activities and programs (N-PCL § 511(a)(3))

 A description of the real property that is the subject of the transaction (N-PCL § 511(a)(4)). Provide the

address, block, and lot number for each property, and attach a copy of the deed or deeds. Include a

statement about whether the deed contains restrictions

 A copy of the contract, lease, or mortgage commitment attached as an exhibit. If the contract or

lease has been assigned or will be assigned prior to closing, the assignment agreement must also be

attached as an exhibit (see previous section on “Preparing the contract of sale” for information on

contract requirements and assignments)

 A statement of the fair value of the property (N-PCL § 511(a)(4)). Include an appraisal for each

transaction, i.e., sales, leases, and mortgages, and attach a copy of the appraisal as an exhibit. The

appraisal must comply with the Attorney General’s requirements for appraisals in its “Guidance on

appraisals of property for not-for-profit and religious corporations seeking approval of property

transactions by the Attorney General or the court” at: https://ag.ny.gov/sites/default/files/regulatory-

documents/AppraisalGuidance.pdf. In addition, include a description of the marketing of the property, if

appropriate

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 A statement of the amount of the corporation’s debts and liabilities and how they are secured (N-PCL §

511(a)(4)). In addition, attach a copy of the corporation's most recent annual financial report or audited

financial statements as an exhibit. If the corporation does not have annual financial reports, prepare a

current schedule of all assets, liabilities, income, and expenses of the corporation, have this certified by

the corporation’s treasurer, and attach it as an exhibit. In certain circumstances, the Attorney General

may require financial statements certified by an independent accountant. If the petition is brought

before the end of the fiscal year, include a financial report to date, together with the corporation’s

financial statements for its most recently completed fiscal year

 The consideration (purchase price, loan amount or rent) to be received by the corporation and how

and when it will be delivered (N-PCL § 511(a)(5)). If the purchase price or rent is less than the appraised

value of the property, include a documented explanation.

In addition, disclose the name of the

purchaser, lender, or lessee, as well as any other key terms of the proposed transaction. If the purchaser

or lessee is a business entity, such as a limited liability company, general partnership, or corporation,

also disclose the names of the members or principals of the entity

 A description of the proposed use of the consideration (N-PCL § 511(a)(5)). If the corporation is

purchasing or leasing new premises, attach a copy of the contract or lease as an exhibit. Attach as

an exhibit any documentation to support the payment of closing costs, debts, loans, liens, broker

fees, legal fees, and other expenses from the proceeds (e.g., evidence of debt, mortgage payoff

letters, or invoices). Provide a pre-closing settlement statement setting forth the amounts due to

and from the seller and purchaser or lender and borrower at closing; loans, liens, and other debt to

be paid from the proceeds at closing; and settlement charges, including title charges, transfer tax,

mortgage tax, recording charges, broker fees, etc., to be paid by each party.

Also submit, as an exhibit,

documentation in support of the planned use of the net proceeds, such as approved budgets, strategic

plans, board resolutions, contracts or other agreements related to the proposed use, etc.

 A statement as to whether dissolution of the corporation is contemplated (N-PCL § 511(a)(5)). If the

corporation is contemplating dissolution, please refer to RCL §18 for guidance on the disposition of

property through a dissolution proceeding in supreme court in the appropriate county

 A statement that the consideration and the terms of the transaction are fair and reasonable to the

corporation, and a statement of the reasons for that determination (N-PCL § 511(a)(6))

 A statement that the purposes of the corporation, or the interests of its members, will be promoted by

the transaction, and a statement of the reasons for that determination (N-PCL § 511(a)(6))

 A statement that the transaction was recommended or authorized by a vote of the directors or

trustees in accordance with law, at a meeting duly called and held at which a quorum was present

(N-PCL § 511(a)(7)). Include in this statement: the date the meeting was held, the total number of

directors or trustees on this date, the number of directors present at the meeting, the number of votes

for and against the resolutions and any abstentions, and the number of board members constituting

Ofﬁce of the New York State Attorney General | Charities Bureau

a quorum (see previous section on “Approval of the transaction by the board”). Attach a copy of the

board resolution, certified by the secretary, as an exhibit. If any board members have voted against the

transaction, provide a brief explanation of the basis for such votes

 If the corporation has members with voting rights, the consent of the members of the corporation

entitled to vote on the transaction (N-PCL § 510(a)(1)). Include a statement that such consent was

given, in accordance with law, upon proper notice, and at a meeting of members duly held at which

a quorum was present (N-PCL § 511(a)(8)). Also include: the date of the meeting, the total number of

members entitled to vote on this date, the number of voting members present at the meeting, the

number of votes for and against the resolution and any abstentions, and the number of members that

constitutes a quorum (see previous section, “Approval of the transaction by members”). Attach a copy

of the membership resolution, certified by the secretary, as an exhibit. If any members voted against the

transaction, provide a brief explanation of the basis for such votes

 If denominational or other governing authority approval is required for the proposed transaction, a

statement that this approval has been obtained. Attach a copy of such approval as an exhibit. If no

approval is required, include a statement to that effect

 A statement of any unusual or extraordinary circumstances of the transaction that will assist in the

Attorney General’s or the court’s review

 A statement that the transaction is being conducted at arm’s length and that none of the directors

or trustees, officers, key persons or members of the corporation, or their relatives will receive a direct

or indirect financial benefit from the transaction or commitments for distribution of proceeds. If

any exceptions to the prior statement are necessary, include a statement of how the related party

arrangement was approved by the corporation, including but not limited to, compliance with N-PCL §

715, and exhibits evidencing such approval. In addition, the Attorney General may request that similar

arm’s-length language be included regarding the purchaser, lessee or lender and the seller, lessor or

borrower, and the corporation’s advisors

 A statement about whether the corporation has previously applied to the Attorney General or the

court for similar approval, and, if so, the determination made concerning the application

 If the application for approval is made to the Attorney General, a statement that the corporation is not

insolvent and will not become insolvent as a result of the transaction (N-PCL § 511-a(b))

 A statement as to whether any persons or entities have raised, or have a reasonable basis to raise,

objections to the transaction, including a statement listing the names and addresses of these persons,

the nature of their interest, and a description of their objections (N-PCL § 511-a(b))

 A statement of the relief requested, i.e., approval to sell real property, approval of a mortgage,

approval of a lease, etc. (N-PCL § 511(a)(9))

Ofﬁce of the New York State Attorney General | Charities Bureau

Venue

If applying to the court for approval of the transaction, submit the veriﬁed petition to the supreme court of the

judicial district or to the county court of the county where the corporation has its ofﬁce or principal place of

carrying out the purposes for which it was formed, even if the property to be sold is located elsewhere (N-PCL

§§ 510(a)(3) and 511(a)).

If applying to the Attorney General for approval of the transaction, submit the veriﬁed petition to the Charities

Bureau in New York City or Albany, or to the appropriate Regional Ofﬁce that handles such applications in the

county where the corporation’s principal address is located. For a list of OAG ofﬁces, the New York counties

they serve, and their contact information, see Appendix E.

Notice to interested persons

The court has the discretion to require a religious corporation to give notice of the application to any

interested person, such as a member, ofﬁcer, or creditor of the corporation (N-PCL § 511(b)). This notice must

specify the time and place, ﬁxed by the court, for a hearing on the application. Any interested person, whether

or not formally notiﬁed, may appear at the hearing and show cause why the application should not be

granted.

In certain circumstances, the Attorney General may ask the court to give notice to interested parties

(including tenants or other occupants of the premises) or hold an evidentiary hearing. For example, if there

is a membership dispute, a dispute about who constitutes a duly authorized board, or a question about the

adequacy of a consideration or a proposed use of the consideration, the Attorney General may ask the court

to hold an evidentiary hearing to resolve the dispute.

Notice to creditors

If the corporation is insolvent or if its assets are insufﬁcient to liquidate its debts and liabilities in full, all

creditors of the corporation must be served with a notice of the time and place of the hearing (N-PCL 511(c)). In

such circumstances, notice to creditors is required by statute, and the petition must be approved by the court

on notice to the Attorney General.

Ofﬁce of the New York State Attorney General | Charities Bureau

Requirements for court order or Attorney General approval

If the petition requests court approval, submit a copy of the proposed order to the Attorney General with

the veriﬁed petition. The order should set forth the terms of the transaction and the consideration. For sales,

include the sale price; the name of the purchaser; and the address, block, and lot number of the property. If

the purchaser is a business entity, such as a limited liability company, general partnership, or corporation,

disclose the names of the members or principals of the entity. For leases, include the amount of rent, the term

of the lease, the lessee, and the address of the property. If the lessee is a business entity, such as a limited

liability company, general partnership, or corporation, disclose the names of the members or principals of the

entity. For mortgages, include the name and address of the lender; the loan amount, interest rate, mortgage

length, and any period of amortization; and the address of the property.

In the order, also describe how the corporation will use the proceeds the corporation will receive (N-PCL

§ 511(d)). This should include both a statement of the itemized closing costs, debts and liabilities of the

corporation that will be paid from the proceeds, and a description of how the net proceeds will be used. If all

or part of the proceeds is to be placed in escrow, specify this in the order. Funds placed in escrow may only

be released by further order of the court on notice to the Attorney General or, if the court so orders, solely by

written approval of the Attorney General.

In addition, the Attorney General requires that the order contain all of the following:

 statement that a copy of the signed court order will be served on the Attorney General, and that the

Attorney General will receive written notice that the transaction has been completed (i.e., upon closing),

if it is still pending 90 days after court approval or if the transaction has been abandoned.

 statement that the final closing statement for the transaction will be provided to the Attorney General

within 30 days after the closing

 statement that none of the terms or parties referenced in the order may be changed without applying

to the court for an amended order.

If the veriﬁed petition requests approval of the Attorney General, submit a copy of the proposed Attorney

General approval to the Attorney General with the petition. In the Attorney General approval, include all of the

previously speciﬁed information required to be included in a proposed order.

Conclusion

If you have any questions about the information contained in this booklet or about the procedures for

obtaining Attorney General or court approval of a transaction, contact OAG’s Charities Bureau in New York

City or Albany, or any OAG regional ofﬁces for assistance. For a list of the regional ofﬁces and their contact

information, see Appendix E.

Ofﬁce of the New York State Attorney General | Charities Bureau

Appendix A: Sample petition for court

approval of real property transactions

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF

-------------------------------------------------------------------------------------------------X

In the Matter of the Application of :

(NAME OF CORPORATION) : VERIFIED PETITION

For Approval to (Type of Transaction) :

pursuant to Not-for-Proﬁt Corporation Law :

Sections 510 and 511 and Religious Corporations Law Section 12 :

-------------------------------------------------------------------------------------------------X

TO: THE SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF _

Petitioner, (name of corporation) by (name and title of ofﬁcer) of the corporation for its Veriﬁed Petition herein

respectfully alleges:

TEXT OF THE PETITION (See pages 16 through 20 and checklist on pages 3 and 4 for the information that

must be set forth in the Petition and the documentation that must be attached to the Petition)

WHEREFORE, petitioner requests that the Court approve the (type of transaction) by (Name of Corporation),

a religious corporation, pursuant to the Not-for-Proﬁt Corporation Law Sections 510 and 511 and the Religious

Corporations Law Section 12.

IN WITNESS WHEREFORE, the corporation has caused this Petition to be executed this

day of (Month) , 20 by

_______________________________________

(Name of Ofﬁcer and Title)

Name of Attorney

Address of Attorney

Telephone Number of Attorney

Email Address of Attorney

NOTE: Include veriﬁcation printed on next page

Ofﬁce of the New York State Attorney General | Charities Bureau

Veriﬁcation

STATE OF NEW YORK )

COUNTY OF _________)

(Name) , being duly sworn, deposes and says:

I am the (Title) of (Name of Corporation), the corporation named in the above Petition and make this

veriﬁcation at the direction of its Board of Directors [Trustees]. I have read the foregoing Petition and know the

contents thereof to be true of my own knowledge, except those matters stated on information and belief, and,

as to those matters, I believe them to be true.

____________________________________

Signature

Sworn to before me this ____ day of __________, 20___ .

____________________________________

Notary Public

Ofﬁce of the New York State Attorney General | Charities Bureau

Appendix B: Sample petition for

Attorney General approval of real

property transaction

ATTORNEY GENERAL OF THE STATE OF NEW YORK

COUNTY OF__________________

------------------------------------------------------------------------------X

In the Matter of the Application of :

(NAME OF CORPORATION) : VERIFIED PETITION

pursuant to Sections 510 and 511-a of the :

Not-for-Proﬁt Corporation Law and Section 12 :

Of the Religious Corporations Law :

------------------------------------------------------------------------------ X

TO: OFFICE OF THE ATTORNEY GENERAL

(Street Address)

(City/Town) , New York (Zip Code)

Petitioner, (name of corporation) by (name and title of ofﬁcer) of the corporation for its Veriﬁed Petition herein

respectfully alleges:

TEXT OF THE PETITION (See pages 16 through 20 and the checklist on pages 3 and 4 for the information

that must be set forth in the petition and the documentation that must be attached to the petition)

WHEREFORE, petitioner requests that the Attorney General approve the (type of transaction) by (Name of

Corporation), a religious corporation, pursuant to the Not-for-Proﬁt Corporation Law Sections 510 and 511-a

and the Religious Corporations Law §12.

IN WITNESS WHEREFORE, the corporation has caused this Petition to be executed this

day of (Month) , 20 by

_____________________________________

(Name of Ofﬁcer and Title)

Name of Attorney

Address of Attorney

Telephone Number of Attorney

Email Address of Attorney

NOTE: Include veriﬁcation printed on next page

Ofﬁce of the New York State Attorney General | Charities Bureau

Veriﬁcation

STATE OF NEW YORK )

COUNTY OF _________)

(Name) , being duly sworn, deposes and says:

I am the (Title) of (Name of Corporation), the corporation named in the above Petition and make this

veriﬁcation at the direction of its Board of Directors [Trustees]. I have read the foregoing Petition and know the

contents thereof to be true of my own knowledge, except those matters that are stated on information and

belief and as to those matters, I believe them to be true.

___________________________________

Signature

Sworn to before me this ____ day of __________, 20___ .

___________________________________

Notary Public

Ofﬁce of the New York State Attorney General | Charities Bureau

Appendix C: Sample court order

approving real property transaction

At the Supreme Court of

the State of New York,

held in and for the

County of _________,

on the ___ day of (Month), 20___.

P R E S E N T:

Hon.___________________________________________,

Justice.

------------------------------------------------------------------------------X

In the Matter of the Application of :

(NAME OF THE CORPORATION) : ORDER

For Approval to (TYPE OF TRANSACTION) :

Pursuant to Sections 510 and 511 of the : Index No.

Not-for-Proﬁt Corporation Law and Section 12 of the

Religious Corporations Law :

------------------------------------------------------------------------------X

ADD BODY OF ORDER WITH RECITATIONS AND DECRETAL PARAGRAPHS

The information set forth in the Order should include, at a minimum:

1. The terms of the transaction

NOTE: The Order should set forth the terms of the proposed transaction. This description should be similar to

the description of the transaction set forth in the petition and should include:

 For sales, include all of the following (refer to the section Verified Petition for Attorney General or

Court Approval on page 16 through page 21):

 the name of purchaser and, if purchaser is a corporation, general partnership, or LLC, the names

of the principals or members of the entity

» the purchase price and how the consideration will be delivered to the petitioner, e.g., in cash or

readily available funds at closing or, for development transactions, a description of cash and non-

cash or in-kind consideration to be received

» any other significant terms of the transaction

» the address of the property and its block and lot number

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 For leases, include all of the following:

 the address of the property and its block and lot number

 the name of the lessee and, if lessee is a corporation, general partnership, or LLC, the names of

the principals or members of the entity

 the amount of the rent to be received

 the term of the lease

 any other significant terms of the lease transaction

 For mortgages, include all of the following:

» the address of the property and its block and lot number

» the name of the lender

» the amount and term of the mortgage loan

» the security for the loan

» any other significant terms of the mortgage transaction

One of the decretal paragraphs should authorize petitioner to enter into the proposed transaction on the

speciﬁc terms set forth in the order.

2. Closing costs of the transaction

NOTE: The order should itemize all anticipated closing costs, such as title fees, mortgage payoffs, broker fees,

ECB/building violations/liens and penalties, etc., and the known or estimated amount of each speciﬁc cost.

The total in legal fees that the petitioner will pay in connection with the transaction, including the amount

already paid and the amount or estimated amount still outstanding or anticipated to close the transaction,

should also be disclosed. The petitioner’s petition should include a similar closing costs paragraph setting

forth the anticipated closings costs and amount or estimated amount of each cost, substantiated by an

exhibit containing a pre-closing settlement statement, invoices, and other documentation of such closing

costs.

One of the decretal paragraphs should authorize the petitioner’s payment of the closing costs described

in the order.

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3. Use of the net proceeds

NOTE: When approving the proposed transaction, the corporation’s board of directors/trustees and, if the

corporation has members entitled to approve the transaction, members should also approve the proposed

use of the net sale proceeds (N-PCL §510(a)(1)). The information in that regard set forth in the order should

be similar to the description set forth in the resolutions adopted by the board of directors/trustees (and

members, if applicable) and in the petition as to how the sale proceeds after payment of closing costs will be

used. The description should include the anticipated amount of the net proceeds after payment of the closing

costs, the speciﬁc programs, projects, or activities of the petitioner for which the proceeds will be used and

the amount of the proceeds to be allocated to each such program, project, or activity. A generic statement

such as the proceeds will be used “in furtherance of Petitioner’s purposes” is not sufﬁcient. If a portion of

the proceeds will be used to pay any outstanding loans or other obligations of the petitioner, each loan or

obligation and the amount to be paid should be listed. If all or part of the proceeds is to be placed in escrow,

this should be set forth. Funds held in escrow may only be released by further written approval of the court or,

if authorized by the court, by written approval of the Attorney General, and that requirement should also be

set forth.

One of the decretal paragraphs should authorize the petitioner’s use of the net proceeds for the speciﬁc

purposes described in the order.

4. Notice and documentation to be provided to the Attorney General

NOTE: One or more of the decretal paragraphs should order that the following notice and documentation be

provided to the Attorney General:

 A copy of the order approved by the court shall be served on the Attorney General.

 The Attorney General shall be notified in writing when the transaction has been completed, if it has

been abandoned or if it still is pending 90 days after approval by the court.

 A copy of the final closing statement for the transaction shall be provided to the Attorney General

within 30 days after closing.

 One of the decretal paragraphs should state: “None of the terms or parties referenced in this Order

may be changed without applying to the Court for an amended Order.”

Ofﬁce of the New York State Attorney General | Charities Bureau

Appendix D: Sample Attorney General’s

approval of real property transaction

ATTORNEY GENERAL OF THE STATE OF NEW YORK

COUNTY OF___________________________________________

------------------------------------------------------------------------------X

In the Matter of the Application of :

(NAME OF CORPORATION) :

: ATTORNEY GENERAL

: APPROVAL

For Approval to (type of transaction) :

Pursuant to Section 510 and 511-a of the :

Not-for-Proﬁt Corporation Law and Section 12 : OAG No. :

Of the Religious Corporations Law :

----------------------------------------------------------------------------- X

By Petition veriﬁed on (DATE) , ( NAME of the CORPORATION) applied to the Attorney General pursuant to

Sections 510 and 511-a of the Not-for-Proﬁt Corporation Law and Section 12 of the Religious Corporations Law

for approval of an application to (TYPE of TRANSACTION) .

1. The assets that are the subject of the Petition are (DESCRIBE the ASSETS) .

2. The terms of the transaction and the consideration are as follows:

NOTE: The information included in this paragraph should be similar to the description of the transaction

included in the petition and should include:

 For sales, include all of the following (refer to the section Verified petition for Attorney General or

court approval on page 16 through page 21):

» the address of the property and its block and lot number

» the name of the purchaser and, if the purchaser is a corporation, general partnership, or LLC, the

names of the principals or members of such entity

» the purchase price and how the consideration will be delivered to the petitioner, e.g., in cash or

readily available funds at closing or, for development transactions, a description of cash and non-

cash or in-kind consideration to be received

» any other significant terms of the transaction

Ofﬁce of the New York State Attorney General | Charities Bureau

 For leases, include all of the following:

» the address of the property and its block and lot number

» the name of the lessee and, if the lessee is a corporation, general partnership, or LLC, the names

of the principals or members of such entity

» the amount of rent to be received

» the term of the lease

» any other significant terms of the lease transaction

 For mortgages, include all of the following:

» the address of the property and its block and lot number

» the name of the lender

» the amount and term of the mortgage

» the interest rate

» the amortization

» the security for the loan

» any other significant terms of the mortgage transaction

3. The anticipated closing costs of the transaction are estimated to total approximately $__________ and

include: (a) title fees of $_________; (b) mortgage loan payoff of $________; (c) broker’s fee of $____________; and (d)

outstanding ECB/building violations/liens and penalties of $________. Petitioner’s legal fees for the transaction

will total $_________, of which $_________has already been paid.

NOTE: This paragraph should list all anticipated closing costs and the known or estimated amount of

each speciﬁc cost. The items we have listed are examples of some common closing costs and the list is

not intended to be all inclusive. The total in legal fees that the petitioner will pay in connection with the

transaction, including the amount already paid and the amount or estimated amount still outstanding

or anticipated to close the transaction, should also be disclosed. The petitioner’s petition should include a

similar closing costs paragraph setting forth the anticipated closing costs and amount or estimated amount

of each cost, substantiated by an exhibit containing a pre-closing settlement statement, invoices, and other

documentation of such closing costs.

4. The net proceeds of the transaction, anticipated to total $_____________, will be used for the following

purposes:

NOTE: When approving the proposed transaction, the corporation’s board of directors and, if the corporation

has members entitled to approve the transaction, members should also approve the proposed use of the sale

proceeds (N-PCL §510(a)(1)). The information included in this paragraph should be similar to the description

set forth in the resolutions adopted by the board of directors (and members, if applicable) and in the petition

Ofﬁce of the New York State Attorney General | Charities Bureau

as to how the sale proceeds after payment of closing costs will be used. The description should include the

speciﬁc programs, projects, or activities of the petitioner for which the proceeds will be used and the amount

of the proceeds to be allocated to each such program, project, or activity. A generic statement such as the

proceeds will be used “in furtherance of Petitioner’s purposes” is not sufﬁcient. If a portion of the proceeds will

be used to pay any outstanding loans or other obligations of the petitioner, each loan or obligation and the

amount to be paid should be listed. If all or part of the proceeds is to be placed in escrow, this should be set

forth. Funds held in escrow may only be released by further written approval of the Attorney General and that

requirement should also be set forth.

5. Based on a review of the Petition and exhibits thereto (and the additional documents and information

requested by the Attorney General), and the veriﬁcation of __(NAME of OFFICER VERIFYING the PETITION) ,

____(OFFICE HELD)________ of Petitioner, that Petitioner, __(NAME of the CORPORATION) , has complied with the

provisions of the Not-for-Proﬁt Corporation Law and Religious Corporations Law applicable to the (TYPE OF

TRANSACTION), and neither the Petitioner nor any third party having raised with the Attorney General any

objections to the proposed transaction, the transaction is approved.

6. Petitioner shall provide written notice to the Attorney General that the transaction has been completed, if it

has been abandoned, or if it is still pending ninety (90) days after approval.

7. Petitioner shall provide the Attorney General with a copy of the ﬁnal closing statement for the transaction

within 30 days after closing.

8. None of the terms or parties referenced in this Attorney General Approval may be changed without further

approval of the Attorney General.

[Name of current Attorney General]

Attorney General of the State of New York

By: ___________________________________________ Dated: ___________________

Assistant Attorney General

[name of Assistant Attorney General assigned to the transaction]

NOTE: Do not put the OAG signature block on a page by itself. Format the approval to ensure that the last

paragraph or a portion of the text from the last paragraph of the approval is on the page with the OAG

signature block.

Ofﬁce of the New York State Attorney General | Charities Bureau

Appendix E: Principal and regional

ofﬁces of New York State Attorney

General and covered counties

Albany

Charities Bureau

The Capitol

Albany NY 12224-0341

518-776-2160

Counties: Albany, Columbia, Fulton, Greene,

Hamilton, Montgomery, Rensselaer, Saratoga,

Schenectady, Schoharie, Warren and

Washington

*Sullivan and Ulster for trusts and estates

matters only

Binghamton Regional Ofﬁce

44 Hawley Street, 17th Floor

Binghamton NY 13901-4433

607-721-8771

Counties: Broome, Chemung, Chenango,

Delaware, Otsego, Schuyler, Tioga,

and Tompkins

Buffalo Regional Ofﬁce

Main Place Tower, Suite 300A

350 Main Street

Buffalo NY 14202

716-853-8400

Counties: Allegheny, Cattaraugus, Chautauqua,

Erie, Genesee, Niagara, Orleans, and Wyoming

Nassau Regional Ofﬁce

200 Old Country Road, Suite 240

Mineola NY 11501-4241

516-248-3302

County: Nassau

*Not for trusts and estates matters. Trusts

and estates matters are handled by NYC.

New York City

Charities Bureau, Transactions Section

28 Liberty Street, 19th Floor

New York NY 10005

212-416-8401

Counties: Bronx, Kings, New York,

Queens, and Richmond

*NYC also handles Dutchess, Nassau, Orange,

Putnam, Rockland, Suffolk, and Westchester

– trusts and estates matters

Plattsburgh Regional Ofﬁce

43 Durkee Street, Suite 700

Plattsburgh NY 12901-2818

518-562-3288

Counties: Clinton, Essex, and Franklin

Ofﬁce of the New York State Attorney General | Charities Bureau

Poughkeepsie Regional Ofﬁce

One Civic Center Plaza, Suite 401

Poughkeepsie NY 12601-3157

845-485-3900

Counties: Dutchess, Orange, Sullivan, and Ulster

*Dutchess and Orange County trusts and estates

matters are handled by NYC;

Sullivan and Ulster County trusts and estates

matters are handled by Albany

Rochester Regional Ofﬁce

144 Exchange Boulevard, Suite 200

Rochester NY 14614-2176

716-546-7430

Counties: Livingston, Monroe, Ontario, Seneca,

Steuben, Wayne, and Yates

Suffolk Regional Ofﬁce

300 Motor Parkway, Suite 230

Hauppauge NY 11788-5127

631-231-2424

County: Suffolk

*Trusts and estates matters are handled by NYC

Syracuse Regional Ofﬁce

300 South State Street, Suite 300

Syracuse NY 13204

315-448-4800

Counties: Cayuga, Cortland, Madison,

Onondaga, and Oswego

Utica Regional Ofﬁce

207 Genesee Street, Room 508

Utica NY 13501-2812

315-793-2225

Counties: Herkimer and Oneida

Watertown Regional Ofﬁce

Dulles State Ofﬁce Building

317 Washington Street

Watertown NY 13601-3744

315-785-2444

Counties: Jefferson, Lewis, and St. Lawrence

Westchester Regional Ofﬁce

44 South Broadway

White Plains NY 10601

914-422-8755

Counties: Putnam, Rockland ,and Westchester

*Not for trusts and estates matters. Trusts and

estates matters are handled by NYC

Ofﬁce of the New York State Attorney General | Charities Bureau

Notes

1. The exceptions to this approval requirement are discussed in a later section (see “What transactions are not

covered”).

2. Requests may be made to the Charities Bureau for use of a lender’s appraisal in a mortgage context.

3. An appraisal is not generally required when a religious corporation transfers its property to another

religious or charitable corporation for no or nominal consideration pursuant to RCL § 12(8).

4. If the consideration to be received is less than the value of the property, the Attorney General may request,

among other things, information regarding the corporation’s efforts to market the property (e.g., methods

used to market the property, time on the market, number of offers received and amount of each offer, etc.)

and documentation substantiating those efforts.

5. If loans received from insiders, i.e., directors or trustees, ofﬁcers, key persons or members of the corporation,

or other related parties, are to be repaid from transaction proceeds, the petition should include foundational

documentation, such as a promissory note executed at the time the loan was advanced, and board and

member resolutions conﬁrming receipt of the loan (or other documentation of the corporation’s receipt of

the loan), as well as current resolutions authorizing the repayment of the loans from the sale proceeds. The

Attorney General may also require each lender to submit afﬁdavits providing information on the loan, why the

loan was made, the amount of the loan, whether the lender has received any payments from the corporation

since the loan was made, how much remains outstanding, and a representation that the lender has not

claimed a charitable deduction for tax purposes in connection with the loan.

Charities Bureau Guidance

28 Liberty Street | New York NY 10005

212-416-8400 | ag.ny.gov

Ofﬁce of the New York State

Attorney General Letitia James