Back on July 1, 2014, several changes were made to the New York Not-For-Profit Corporation Law (“NFP”). The Non-Profit Revitalization Act of 2013 amended the NFP law in a few ways. Among other things it replaced the then four types of NFP corporations (Type A, B, C and D) with just two, namely “charitable” and “non- charitable corporations”. Type B and C corporations as well as Type D corporations formed for charitable corporations were now deemed “charitable corporations”. Type A and all other Type D corporations were now deemed “non-charitable corporations”.
NFP Law Section 510 (a) (3) was also amended to provide that the sale, lease, exchange or other disposition of all or substantially all of the assets of a “charitable corporation” can be achieved by either obtaining a court order in accordance with NFP Section 511 or by obtaining the approval of the New York State Attorney General in accordance with NFP Section 511-a. (Prior to these changes the only option for a Type B or C corporation that was disposing of all or substantially all of its assets was to obtain a court order.)
What the Non-Profit Revitalization Act of 2013 did not do was change what was required of a religious corporation that was selling, mortgaging or leasing its real property. A religious corporation was still required by Religious Corporation Law Section 12 to get court approval for the disposition of its real property.
On December 11th, 2015, Section 12 of the Religious Corporation was amended to now also give religious corporations the option of obtaining approval from the Attorney General alone. A court order is no longer the exclusive method for a religious corporation to obtain approval to sell, mortgage or lease real property.