Chancel Repair Liability
ARTICLES AND FAQS
Some of the things people ask and problems they have, with our comments and answers.
History and Background
This is piece of largely forgotten history come back to haunt us. Following a House of Lords ruling, the law has been changed, which hopefully will result in the eventual dying away of some ancient rights, but will still cause a problem for the next few years.
There was a famous case recently, (Aston Cantlow v Wallbank), where the Church sought payment from the owners of the rectorial land (it was part of a property called Glebe Farm) to repair the chancel of the local mediaeval Church. The owners of the rectorial land (known as lay rectors) refused to pay and what was originally a £6,000 bill increased to £96,000 as the structure slowly disintegrated. In the end the landowners were faced with a hefty legal bill after the case had gone right through to the House of Lords.
Such obligations stem from mediaeval times where land, previously owned by the Church to fund the local rector, had been sold and the new owner took on the repairing obligation attached to that land. The church is not necessarily the local parish church as it is the medieval parish that is being considered here and many modern parishes were not constituted until the nineteenth or twentieth centuries. The penalty is financial in that it involves having to pay for the upkeep and repair of the chancel of the local mediaeval parish church. The liability affects some land in some medieval parishes.
As a reaction to this case, provisions were included in the Land Registration Act 2002, which gave Church Councils up to 13th October 2013 to register any rights they considered they had. The buyers of any property sold after that date where the right had not been registered at the Land Registry would be free of any liability for the future. The Government could have taken the opportunity to remove these ancient rights completely, but did not do so, so we are stuck with an unsatisfactory situation that is explained below.
Present Practice
We now have the facility to arrange insurance for the market value of most residential properties (up to £1million) for 25 years for £10 (no VAT) and in perpetuity for £15. This is because we have a special block policy with an insurer, which is not generally available to all solicitors, nor to the general public. We can arrange this very quickly on completion providing certain criteria are met, which is usually the case. We are now going to do this in all cases, except where we have a cash buyer wanting to make a small saving, as the basic insurance is cheaper than the cost of a Chancel Check Search. If is a mortgage to be secured on the property, then we have to do this to protect the lender's position.
Many firms carry out a Chancel Check (costing £10-£15 plus VAT) to reveal whether or not the property being purchased is affected by a potential “Chancel Repair” obligation to the local Parish Church. This would simply show whether the property is within a parish or part of a parish where there is some property with the liability. If there is no possible liability the matter does not have to be taken any further. If there is a risk in that some property in that area is affected then at least the basic insurance is still necessary. As the insurance is is in most cases for us cheaper than the search, there is little point now in this firm doing these searches, except in a few unusual situations.
It has always been possible (at a cost of at least £100, if not more) to have a full search carried out in the National Archives to determine whether a particular piece of land is affected in this way. If this produces a result showing the property is not affected then nothing more needs to be done. However, if the result is adverse and shows potential liability for that property, then two nasty results follow:
- Insurance becomes dramatically more expensive - higher three figure or even four figure sums; and
- We have an obligation to register the liability against the title at the Land Registry.
It is therefore fairly obvious that it is not a good idea to do the full search. We only normally arrange the cheap insurance but people using other solicitors In most cases will be advised that the Chancel Check Search plus the insurance costs less than a full search and is the safer option. Because of Financial Services regulations we can only arrange these policies for our clients buying property and for their buyers.
Isn't the risk so small it's worth ignoring?
Possibly! The trouble is the law has been changed fairly recently and it would only take a concerted campaign by some Churches to register their rights for some property owners to have serious problems selling their property. The mere existence of a registered right is quite likely to put off a potential buyer. So far, we haven't heard of such a campaign, but the situation could change. We have even heard of the opposite. In one or two places in Somerset, the Church Councils have renounced any such rights they may have!
If you are not having a mortgage on the property you are buying, then you can choose to take the risk. However, if there is a mortgage, we have little choice but to arrange the insurance. Asking your lender if it is really concerned about the point is unlikely to produce a quick or sensible answer because of Lender Bureaucracy and therefore if the seller will not pay for the indemnity insurance, (and they often won't, although logically they should), the bottom line is to pay for it or face further delays.
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Copyright: Richard Webster & Co 2010
Richard Webster & Co 30 Leigh Road Eastleigh Hampshire SO50 9DT
Chancel Repairs and Conveyancing. The issues explained by Richard Webster & Co
Page Last Revised 15/02/11