Should have happened way earlier, that building is a hazard to all. If whoever owns it can't take care of it, then of course the authorities should step in and deal with it, particularly as it is a church so the decrepit state reflect poorly on the authorities in the eyes of the church.
I bet he is going to get a very good upgrade in return, seeing as he received the thing from the very same king, who now has realized/received reports on its actual state and what a lousy gift it was (and even took it back, so he owes a good replacement twice over).