• The permission of the Holy See closely concerns the world of religious congregations when it comes to carrying out a transaction classifiable as one of extraordinary administration.
• A look at the preliminaries: from laying the groundwork, including checking whether the property is of cultural interest, to obtaining the permissions of the competent superior and the Holy See.
• Examining in depth how the authorisation process interacts with civil contract law and new developments regarding leases for a term exceeding nine years.
• From the application for authorisation to the sale and to the report on the nature, condition and extent of the property: we analyse the procedure for the issuing of ecclesiastical authorisation.

Clearance

For most people, the permission of the Holy See equates to one of the requirements for getting married in a church. In reality, this expression also closely concerns the world of religious congregations. In detail, when a transaction takes place, a religious congregation must request and obtain clearance therefor from the Holy See. In other words, a document that gives the green light to the possible alienation of the real estate asset belonging to the congregation. We delve into the subject, analysing the main regulatory provisions and how they interact with the civil law of contracts.

Permission of the Holy See: laying the groundwork is essential

There are certain matters that need to be attended to before a religious congregation can apply for the permission of the Holy See. Specifically, carrying out administrative, town-planning and cadastral due diligence, checking whether the property is of cultural interest and obtaining a valuation from a certified valuer are all steps that must have been successfully completed.

The management and alienation, if any, of real estate belonging to religious congregations exhibit certain special features. Unless otherwise specified, this article deals only with the sale of ecclesiastical property located in Italy. In addition to the need for property built more than seventy years ago to be checked to ascertain whether it is of cultural interest, a rule valid only for Italy, the written permission of both the competent superior with the consent of his/her council and that of the Holy See may be required for entering into the transaction (Code of Canon Law, Canon 638 § 3¹ and Canon 1295²).

• The written permission of the competent superior, in accordance with the religious congregation’s own statutes, is required for all transactions that could worsen the patrimonial condition of the entity concerned.
• Moreover, the permission of the Holy See becomes indispensable:
  – if the sum (or the value to be more precise) of the transaction exceeds the sum set by the Holy See for each region;
  – where the transaction, whatever its value, concerns things given to the Church by vow, or things precious for artistic or historical reasons;
  – for the granting a right of use (including rights in rem other than ownership) of real estate for a period of over nine years should the value of the asset covered by the contract exceed the stipulated sum³.

The common rationale underlying all of the provisions requiring authorisation by the Holy See is the protection of the patrimonial condition of juridic persons. This is to avoid their undue impoverishment, but also to ensure the appropriate use of ecclesiastical assets, such as those belonging to institutes of consecrated life and societies of apostolic life (see Code of Canon Law, Canon 1254, § 2).

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Threshold values and the body responsible for granting permission

The setting of the threshold values was delegated by the Holy See to the episcopal conferences of each individual region. Those values are summarised in the table below.

For Italy, the threshold value is set at €1,000,000⁴: a sum that was certainly significant when it was established in 1998 but may perhaps appear somewhat modest today. However, there are initiatives currently underway aimed at changing it.

The Dicastery for Institutes of Consecrated Life and Societies of Apostolic Life (DICLSAL) is responsible for issuing the permission, in the form of authorisation to enter into the transaction, after obtaining the opinion of the diocesan ordinary (in Rome, the Vicariate) of the place where the real estate is located.

The diocesan ordinary’s opinion is binding only for the alienation of property owned by autonomous monasteries or institutes of diocesan right (see Code of Canon Law, Canon 638, § 4, which speaks of “consent”). It is not binding, even when given in the form of an authorisation, for public juridic persons of canon law. Its purpose is to allow the diocesan bishop, or a body dependent on him, to possibly use the property for the pastoral needs of the diocese, by purchasing it on equal terms⁵.

For properties located in the city of Rome, it is also expressly provided that the Dicastery must communicate the request of the permission of the Holy See to the Secretariat of State and the Administration of the Patrimony of the Apostolic See (APSA) so as to enable the latter to exercise a right of pre-emption for the purchase if it so wishes⁶.

READ ALSO: How to value a property of an ecclesiastical institution or the Vatican – Holy See

Interaction with civil contract law

To clarify the relevance of the permission of the Holy See within the context of Italian law, it is essential to begin by examining the agreements that led to the revision of the Concordat. Signed in 1985, they were formalised in Italy by Law No 222 of 20 May 1985.

Article 18 provides for the inefficacy or invalidity of legal transactions flawed by defects in representation or lack of authorisation, the need for which is set out in the Code of Canon Law or in the Register of Juridic Persons. That register contains extracts of the constitutions of institutes of consecrated life and societies of apostolic life, normally showing the manner in which the will of the entities in question is formed.

The immediate consequence of this provision is that, for the purposes of the validity of the transaction (in Italy, normally, a contract) also within the Italian legal system, the relevant notary must be provided with an authorisation issued by the Dicastery for Institutes of Consecrated Life and Societies of Apostolic Life for contracts whose value exceeds the threshold limit.

That said, the opinion of the local ordinary has no bearing on the validity of the transaction in Italy. Therefore, it not necessary to exhibit it to anyone or to deliver it to the relevant notary. In any event, the issue of the permission of the Holy See presupposes the very existence of that opinion. Furthermore, since neither the Code of Cannon Law nor the Register of Juridic Persons envisage any such opinion as binding, it is relevant solely for the lawfulness under canon law of the transaction but does not invalidate its legal effects under Italian law.

Normally the failure to receive the permission of the Holy See or the right to exercise the canonical pre-emption are included as conditions subsequent both in preliminary contracts (and equatable accepted irrevocable purchase offers) and in the final notarial deeds of purchase and sale. This is a wise move especially so as to regulate the consequences of a refusal to grant authorisation or an exercise of canonical pre-emption⁷.

The case of leases with a term of more than nine years

As mentioned before, certain cases requiring the permission of the Holy See have been introduced that do not appear in the Code of Canon Law. The most relevant are those envisaged by the Guidelines promulgated by the Prefect of the former Congregation for Institutes of Consecrated Life and Societies of Apostolic Life (DICLSAL) in 2018⁸, including for leases of more than nine years.

In those cases, it is envisaged that the authorisation will be issued only on the basis of a draft of the contract that the parties will then sign. Due to the circumstance that the need for a permission from the Holy See is not apparent from either the Code of Canon Law or the Register of Juridic Persons, it is imperative that the other civil contracting parties be formally informed of the need for the permission from the outset of any negotiations in order not to incur pre-contractual liability if the contract cannot be concluded due to a refusal to grant the authorisation.

The procedure for granting the permission of the Holy See

Once the will of the entity has been formed, in accordance with the provisions of the Code of Canon Law and its own statutes, the institute will have to submit a request for an opinion to the diocesan ordinary accompanied by the necessary documentation for the issuance of the permission of the Holy See, including:

• a letter requesting authorisation to sell, describing the reason for the decision to alienate and seeking the bishop’s opinion;
• a resolution of the general council and the superior general as per the entity’s own statutes;
• a report on the nature, state and extent of the property accompanied by cadastral plans and searches;
• a valuation report, preferably sworn, drawn up by an independent professional;
• a copy of the accepted irrevocable purchase offer or conditional preliminary contract.

Wording whereby the purchaser is unspecified, such as “for himself and/or person and/or company to be named” are not well seen as in such cases the identity of the final purchaser is not identifiable and thus it is impossible to carry out the necessary investigations and/or assessments.

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Authorisation procedure and costs

Once the bishop’s favourable opinion has been obtained, the relevant documentation, together the opinion itself, must be submitted to the Dicastery (formerly the Congregation) for Institutes of Consecrated Life and Societies of Apostolic Life, Vatican City.

The Dicastery, in turn, will forward the request to both the Secretariat of State and the Administration of the Patrimony of the Apostolic See for the purposes already mentioned. The Dicastery will then either deny or issue the permission of the Holy See for the sale and request payment of the fees due. The granting of authorisation is against payment and its cost is determined as a percentage of the declared value. Currently, it is two thousand percent of the value of the transaction.

The time required to complete the procedure is significantly reduced when the sale is to take place between institutes or between other ecclesiastical bodies due to the continuing ecclesiastical nature of the property.

The possible contrast between canonical and ministerial pre-emption rights

A specific mention has to be made related to the possible of a conflict that may arise between canonical pre-emption and that exercisable by the Ministry of Culture MiC, where a property of cultural interest is involved.

If the property is subject to a lien placed by the Ministry of Culture, possibly following a verification of its cultural interest, the Italian State has a right of pre-emption for the purchase. In such cases, if it is an ecclesiastical institution, and the Administration of the Patrimony of the Apostolic See has exercised pre-emption for the purchase to the detriment of the original intending purchaser, it will be the contract entered with Administration of the Patrimony of the Apostolic See that will be made conditional on the State’s failure to exercise its right of pre-emption by the prescribed deadline. In short, the right of pre-emption of the Italian State prevails in Italy.

Special cases

In conclusion, it is worth pointing out two cases that occur with some frequency.

• The donation of property between civilly different juridic persons (e.g. two provinces) but belonging to the same religious congregation. In this case, the need of the permission of the Holy See should not even arise because the transaction does not entail the transfer of the asset, nor a veritable alienation, nor worsen the patrimonial condition of a juridic person under canon law. However, it may happen that the notary who draws up the deed demands it and in such instances the Dicastery will issue it.
• It sometimes happens that one comes across purchases and sales without the permission of the Holy See of property worth slightly more than the threshold value but with prices agreed for an amount just below the threshold. Not only is such conduct morally reprehensible but it also generates canonical liability for both those who carried out the transaction and those who should have supervised the latter.

Download the limit sums

Luigi Pamphili, attorney-at-law
Via dei Gracchi 209
00192 Rome
Email: studiopamphili@studiopamphili.it
Tel. + 39 06 3200513

 

NOTE

¹ Canon 638

§1. Within the scope of universal law, it belongs to proper law to determine acts which exceed the limit and manner of ordinary administration and to establish what is necessary to place an act of extraordinary administration validly.

§2. In addition to superiors, the officials who are designated for this in proper law also validly incur expenses and perform juridic acts of ordinary administration within the limits of their function.

§3. For the validity of alienation and of any other affair in which the patrimonial condition of a juridic person can worsen, the written permission of the competent superior with the consent of the council is required. Nevertheless, if it concerns an affair which exceeds the amount set by the Holy See for each region, or things given to the Church by vow, or things precious for artistic or historical reasons, the permission of the Holy See itself is also required.

² Canon 1295 contains different wording: “any transaction which can worsen the patrimonial condition of a juridic person”, which for our purposes it is not essential to consider.

³ See the “Guidelines” promulgated by the Prefect of the former CIVCSVA, with the approval of the Holy Father, on 6 January 2018, point 78 of which deals with “Authorizations of the Holy See for leases, loans and other similar contracts”.

⁴ Pursuant to Resolution No 20 of the XLV General Assembly of the Italian Bishops’ Conference, promulgated, upon recognitio of the Holy See, by Decree No 389/99 of 27 March 1999.

⁵ See CIVCSVA Circulars No 1680/95 of 29 October 1996 and No 971/2004 of 21 December 2004.

⁶ See, more recently, the “Guidelines” promulgated by the Prefect of the former CIVCSVA, with the approval of the Holy Father, on 6 January 2018, at point 81: “[…] For sale of buildings located in the city of Rome, before issuing the authorization, the Congregation for Institutes of Consecrated Life and Societies of Apostolic Life shall communicate the request to the Secretariat of State and the Administration of the Patrimony of the Apostolic See, to determine whether they would have possible interest in the property.”

⁷ Also in order to avoid generating an expectation in the other civil contracting party that authorisation has already been granted, an expectation that could give rise to claims for damages.

⁸ Point 78 of the said Guidelines, headed “Authorizations of the Holy See for leases, loans and other similar contracts”, states as follows: “Regarding any leasing, loans, ceding of land rights, giving use, providing housing, establishing the right of usufruct: should the value of the transaction exceed the maximum amount set for the individual regions and the contract has a duration of over nine years, one must seek the authorization of the Congregation for Institutes of Consecrated Life and Societies of Apostolic Life. The request, sent by the Superior General with the consent of his/her Council, must present the reasons for the request and attach a draft of the contract.”

The provision regulating the authorisation for a variety of different transactions, some of which already definitely require authorisation under the provisions that it mentions, certainly makes the granting of leases subject to meeting the dual requirements of the value exceeding the maximum amount set for the individual regions and the term of the lease exceeding nine years.

 

MAIN REGULATORY FRAMEWORK

• Code of Canon Law, canons 638, 1254, 1291, 1292, 1293, 1294 and 1295
• Resolution No 20 of the XLV General Assembly of the Italian Bishops’ Conference of ….., promulgated, upon recognitio of the Holy See, by Decree No 389/99 of 27 March 1999
• CIVCSVA Circulars No 1680/95 of 29 October 1996 and No 971/2004 of 21 December 2004
• “Guidelines” promulgated by the Prefect of the former CIVCSVA, with the approval of the Holy Father, on 6 January 2018
• Italian Law No 222 of 20 May 1985, setting out “Provisions on ecclesiastical bodies and property in Italy and for the support of Catholic clergy serving in dioceses”
• Italian Civil Code, Articles 1337 “Negotiations and pre-contractual liability” and 1353 “Conditional contract” et seq.