Property law expert, Caroline Entwistle, explains why chancel repair liability remains a potentially expensive problem for many homeowners.
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There are innumerable things we consider when looking for a home – its location, the purchase price, the number of bedrooms, the size of the garden and the local schools. But issues concerning the local church, if they feature at all, are likely to be way down the list. So, it may come as a surprise to discover that some properties are encumbered with a liability to pay for church repairs.
Although a mediaeval relic, some unfortunate homeowners find their house is built on land to which chancel repair liability attaches. This is a perpetual obligation to contribute to the cost of repairs to the chancel, which is the easterly portion of the church where the altar is situated.
How did this liability arise?
Centuries ago, repairs to the chancel were the responsibility of the rector of the parish, to be paid for from his tithes; a local tax attaching to land and payable annually to him. Monasteries often acquired this land and with it the responsibility for chancel repairs. Following the dissolution of the monasteries by Henry VIII, most of their land was sold or given away, but any liability for chancel repair remained attached to it. Even today, homes built on this land can be liable.
Liability is ‘joint and several’. This means that any one of the affected landowners is responsible for the full amount of the repairs, which might run to tens or even hundreds of thousands of pounds.
Before 2003, chancel repair liability was all but forgotten, the commonly accepted view being that it was unlikely that churches could force property owners to pay these costs. But in a bitterly-fought case which reached the House of Lords that year, a couple in the village of Aston Cantlow in Warwickshire were held responsible for chancel repair costs of almost £100,000. With their additional liability for legal costs approaching £300,000, they were forced to sell their home.
With rising overheads, reduced income, and the fabric of many places of worship disintegrating, those churches with the benefit of chancel repair liability may be more tempted than ever to take advantage of it.
How can properties affected be identified?
Given its serious implications, you might think that properties saddled with this draconian liability would be readily identifiable. But the waters remain muddied.
A change in the law in 2012, meant that churches had until 12th October 2013 to protect their right to chancel repair liability by registering a notice at the Land Registry against properties affected. This resulted in around 250 churches registering notices against more than 12,000 properties. Yet that does not represent the full extent of the problem.
First, around fifteen per cent of land remains unregistered, which means that a church cannot register a notice against it. They can however register a ‘caution’ against the land, which means that the Land Registry must immediately notify the church of any application for first registration. If the church does not then register a notice, it loses its right to the liability.
Second, those churches that failed to register a notice against a registered property by 12th October 2013 are not necessarily precluded from still doing so. The right is only lost if the property has subsequently changed hands for ‘valuable consideration’, ie for money or something else of value, not as a gift.
How can you protect yourself?
If the property is registered, any existing notice will be revealed when your solicitor carries out a Land Registry search at the start of the conveyancing process. But even if a notice has not been registered, if there has been no transfer for valuable consideration since 12th October 2013, the church can still lodge a notice right up until completion. That is one of the reasons why it is standard practice for your solicitor to obtain a ‘priority search’ from the Land Registry before completion. This prevents registration of any interest that is adverse to yours, including chancel repair liability, for a period of thirty business days. To ensure you are protected, completion should take place within this period or, failing that, a further priority search should be obtained.
In appropriate cases, conveyancing solicitors will recommend a chancel repair liability search. For a modest fee, the search company will report whether the property is within a parish where a potential chancel repair liability exists. Alternatively, you can carry out a search at the National Archives.
If your property is exposed to chancel repair liability you are strongly advised to take out insurance. The premium for cover varies depending on the type and location of the property, whether a notice has been registered and the limit of the indemnity provided. A typical one-off premium for a standard residential property with £100,000 of indemnity is around £25.
It is worth noting that even if a notice has been registered by the church, it may still be possible to obtain insurance, although the premium will be higher, sometimes considerably so.