Legal Definitions - mortmain statute

A mortmain statute is a law that restricts the ability of corporations, especially charitable or religious organizations, to acquire and hold land indefinitely. The primary purpose of such laws is to prevent large amounts of property from being permanently tied up outside of general commerce or the tax base, often without the possibility of being sold or transferred.

Historically, these statutes originated in England to prevent religious institutions from accumulating vast tracts of land that would then be held "in mortmain" (meaning "dead hand"), effectively removing it from feudal obligations and the Crown's control. While not a widespread part of common law in the United States, the concept has influenced certain state laws that place limits on the amount or value of property that corporations, particularly those with religious or charitable purposes, can own.

Here are some examples illustrating how a mortmain statute might apply:

• Example 1: Large Land Donation to a University

  Imagine a wealthy alumnus decides to donate a vast ranch, spanning 10,000 acres, to a private university for use as an agricultural research facility. If the state where the university is located has a mortmain statute, it might limit the total acreage a non-profit educational institution can own. The statute could require special governmental approval for the university to accept and hold such a large parcel, or it might mandate that any land exceeding a certain limit must be sold within a specified period. This prevents the university from indefinitely holding an excessive amount of land that could otherwise be used for other purposes or contribute to the local tax base.

• Example 2: Church Inheriting Multiple Commercial Properties

  Consider a scenario where a devout individual passes away and, in their will, bequeaths several valuable commercial buildings and apartment complexes to their local church. In a jurisdiction with a mortmain statute, there might be a cap on the total value or number of income-generating properties a religious organization can own. The church might be allowed to keep one or two properties for its direct operational needs but could be legally required to sell the remaining properties within a certain timeframe, such as five years. This ensures that a significant portion of the community's commercial real estate remains actively traded and subject to property taxes, rather than being held perpetually by a non-profit entity.

• Example 3: State-Imposed Cap on Charitable Holdings

  A particular state legislature might enact a law stating that no single charitable foundation can own more than $500 million in real estate assets without specific legislative review and approval. This law acts as a modern mortmain statute. If a large national charity, through various donations and purchases, accumulates real estate holdings exceeding this $500 million threshold within that state, it would trigger the provisions of the statute. The charity might then need to divest some of its properties or seek a special exemption from the state legislature, demonstrating why its continued ownership of the excess property serves a vital public interest. This ensures oversight and prevents any single charitable entity from monopolizing a significant portion of the state's land resources.