Nelson Madden Black Obtains Court Order Invalidating Mortgage on Church Property

In an important victory for a Nelson Madden Black client, the New York State Supreme Court has invalidated a mortgage on church property that did not comply with the requirements of the New York Religious Corporations Law.

This appears to be the first time that a court has struck down a “hard money” mortgage – that is, a mortgage securing a short term loan at high rates, with a balloon payment due at the end of the term – after finding that it was not fair to a church when it was made and that it was not in the church’s best interest to enforce it now.

The court battle over the mortgage began in April 2010, when the lender sought to foreclose on the mortgage. By 2018, when Nelson Madden Black began to represent the church, the lender had been awarded summary judgment and was seeking to foreclose on its mortgage. Nelson Madden Black overcame judgment in favor of the lender and, now, has obtained summary judgment in favor of the church.

Nelson Madden Black demonstrated that the mortgage was invalid from the beginning because it did not comply with the Religious Corporations Law, and persuaded the court not to retroactively approve it.

The decision has been published by the New York Law Journal and is available at:

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