Congratulations, you’ve reached over halfway in our Conveyancing Questions Answered series a blog a day during the month of May.
We’ll bring to your attention to a few important topics which are not easily categorised elsewhere.
We group together some topics of interest as well as problems and pitfalls you may encounter on your Conveyancing journey.
Some of these problems have been around for a long time but some are recently new.
Welcome to Day Welcome 16 of your Conveyancing questions answered – all in one place: Chancel Repair Liability.
What is Chancel Repair Liability?
The Chancel is the area (including the altar and the choir stalls), which accounts for pretty much the east end or 25% of the total area of a Church.
Back in the day (900 AD or thereabouts), much of England and Wales was owned by parish churches –about 4,000,000 acres.
Every parish had its own vicar or rector.
A contribution known as a tithe was taken from parishioners in return for using land owned by the parish.
Tithes were split into 'great tithes' and 'small tithes'.
Commonly, great tithes were paid to the rector for the area and small tithes to the local vicar.
The rector or vicar also earned income from 'glebe lands' which were local tracts of land to be used for their benefit.
The Rector used the income from the tithe to fulfil one of his responsibilities, namely maintenance of the Chancel of his Church.
Chancel Repair responsibility was unwittingly broadened ( as part of what we would now call privatisation) when Henry VIII ordered the dissolution of the monasteries.
When Henry VIII sold off the monasteries, he also sold off the liability for the Chancel Repair with the lands. In most cases, institutions took on the responsibility of the rector’s liability. However, in some cases, this could also be the person who assumed the liability handed down with the land through the generations and a new breed of “lay rectors” was created.
Over the years, further rectorial land (and thereby a responsibility to repair the Chancel) was created through the conversion of tithes into land by Enclosure Acts.
Unfortunately, although Parliament eventually abolished tithes, nothing was done to abolish Chancel Repair liability until it was included (and even then as an afterthought) in some catch-all legislation passed in 2002 (see below).
Why all the fuss with Chancel Repair Liability?
In modern times, it was extremely rare for any home owner or home buyer to come across the Liability.
That changed in 2008 and Chancel Repair Liability became a bête-noir in the Conveyancing process. In that year, a Mr. and Mrs. Wallbank lost an appeal in the House of Lords against a demand to repair the Chancel of a medieval church near their farm in Aston Cantlow, Warwickshire.
Mr. and Mrs. Wallbank faced a bill of between £250,000 to £400,000 including legal costs and were forced to sell their farm in order to fund the repair.
Ancient and medieval Churches now had a new potential avenue for funding repairs. This was especially so as in that case English Heritage refused a grant because “they (the PCC) had failed to exhaust other avenues of finance” i.e. Chancel Repair Liability.
Personal liability under Charity law might also follow members of PCCs who had failed in their fiduciary duties not to seek to impose the liability.
Cue: Conveyancing alarm bells ringing.
Homebuyers ( and more particularly their Conveyancers) became concerned that the purchase of a new home could unwittingly come with a potentially expensive liability to fund the Chancel of their local church.
Did an Act of Parliament in 2002 Abolish Chancel Repair Liability?
Yes, the Land Registration Act 2002 sought to abolish (but only as an afterthought) the liability in certain instances.
Churches through their Parochial Church Councils had until 12th October 2013 ( or so it was thought) to register such “overriding interests” as they are known, to be enforceable against a property.
An entry would be made at the Land Registry for registered land or a notice if the property is unregistered.
Unfortunately, the story didn’t quite end on 12th October 2013.
What is the Chancel Repair Liability Position After the Deadline?
It is still possible to register a notice of Chancel Repair Liability for registered land or a caution against registration for unregistered land after 12thOctober 2013.
The Registered Land Process
The Land Registry states:
Even if the interest has not been protected by the entry of a notice in the register the land will remain subject to it. But, unless such a notice is entered, a person who acquires the registered estate for valuable consideration by way of a registrable disposition after 12 October 2013 will take free from that interest28. Until such a disposition is registered the person having the benefit of the interest may apply to protect it by entry of notice.
What does that mean in plain English?
Well, properties that were purchased and registered before 12th October 2013 will still remain vulnerable to a registration of a notice of Chancel Repair Liability – until the property is next sold - that could be a matter of months but possible still many years ahead.
The Unregistered Land Process
The Land Registry states:
Where any of the interests the subject of this guide have not been protected by notice or caution against first registration before 13 October 2013, they do not automatically cease to exist on that date. The position is as set out below.
The courts have still to consider if and when it may be possible after 12 October 2013 for the holder of the interest to have the register altered so that a notice is entered where the registered proprietor has taken free of the interest following first registration or following the registration of a disposition for valuable consideration. They have also still to consider whether indemnity may ever be payable where the register cannot be altered in this way.
A Comprehensive Guide to Chancel Repair Liability
I have been writing about Chancel Repair Liability for many years. I’ve also spoken on Radio, been mentioned on the BBC website and appeared on TV as the Chancel Repair Liability expert.
If you would like to read a comprehensive guide to Chancel Repair Liability together with examples of how it has affected some people please go to my blog Chancel Repair Liability: Absolutely All in Place.
Chancel Repair Liability: a Game of Snakes and Ladders
If you would like to see whether your property might be affected by Chancel Repair Liability you can do so in a visual game of Snakes and Ladders.
Chancel Repair Liability: Slideshare
I’ve also put the main matters you need to consider in respect of your potential liability in a Slideshare which you can view here.
What Does This Mean All Mean For Buyers and Sellers?
Annoyingly, it will still be standard practice for your Conveyancing Solicitor to recommend a Chancel search and/or take out Chancel Repair Liability Insurance.
Many parishes are unaware of their liability and there are no satisfactory means of discovering whether the liability will affect their homes.
Parochial Parish Council decisions not to seek to register Chancel Repair Liability will not bind future PCCs who may change their minds, unless, that is, the previous purchase of the property was after 12th October 2013 ( see Snakes and Ladders above).
For those of you already in your home, in close or not so close proximity to a medieval church and whether in the country or in an urban setting, it may be worth considering taking out Chancel Repair Liability insurance now.
Remember as each year goes by, properties sold for the second time after 2013, will have no liability where no registration or caution is noted against the title.
But, in the meantime, the line of least resistance will be to insure against any potential liability.
You can insure against the liability (based on the value the property) and generally, the premium is a one-off and inexpensive.
A search is also possible at a cheaper fee but will not reveal much. The best option is to insure without the search. The cost of insurance is normally between £20 to £100 plus VAT.
If you do have any enquiries I am happy to help but by email only to paul[at]cluttoncox.co.uk.