The end of chancel repair liability?

Posted: 21/10/2013

---

The end of chancel repair liability?

Described variously as 'arcane and unsatisfactory', 'capricious and uncertain', and 'anachronistic in a largely secular society', successive governments have nonetheless resisted repeated calls to abolish chancel repair liability (CRL), opting instead to phase out this ancient right over a period of ten years. That period came to an end at midnight on 12 October 2013, but we’ve not heard the last of CRL. The right will continue to affect certain property interests for some time to come.

Remind me what all the fuss is about

CRL has been causing headaches in the conveyancing world for the last ten years. The liability affects land in parishes where there is a Church of England church dating back to medieval times or earlier. Where it exists, CRL allows parochial church councils (PCCs) to call upon property owners in the parish to fund repairs to the chancel, which is the eastern part of the church where the altar and choir stalls are usually situated.

There is no single conclusive way of identifying whether a property owner is liable, since records at the National Archives office are incomplete, and their accuracy is not guaranteed. Any type of property can be subject to CRL, regardless of where it is located. Evidence of liability will not necessarily be found in the title deeds and CRL used to bind owners of affected land even though there was nothing on the Land Register to alert them to its existence. That is going to change, but only after a period of transition during which uncertainty will continue in some cases.

And what was the case that lit the spark?

In existence for centuries, CRL only came to the attention of the public in 2003, when the House of Lords ruled in PCC of the Parish of Aston Cantlow v Wallbank that a couple in Warwickshire were liable to pay £95,000 towards repairs of their local church. The decision created anxiety in the conveyancing world to an extent that was probably out of proportion to the actual risks involved but nonetheless gave birth to a new search and insurance industry. Fuelled by lender concerns, it became the norm to search a commercial database to establish whether there was a potential liability in a parish, and to insure against it if there was.

The Church’s stance

Adverse publicity in the Cotswold village of Broadway last year resulted in one PCC backing down, but there is evidence that other PCCs, strapped for cash and unsure of future public funding, have not been so lenient. The Land Registry estimates that, ahead of the deadline, 89 PCCs have made 700 applications to register CRL. Following the deadline, PCCs remain free to register the right, where it exists, until the land has next been sold for valuable consideration. Only at that point can land be purchased free of the liability once and for all, assuming that no notice of the right has been entered in the meantime.

Our stance

• Where land is purchased for valuable consideration after 12 October 2013, where there is no entry on the Register, we will no longer search and insure.
• However, where we anticipate a long delay between exchange and completion, we will continue to search before exchange of contracts and, where necessary, insure, to guard against a PCC making an application before completion.

 When will we still search and insure?

In all other dealings with land, we will continue to commission a search, and obtain insurance in appropriate cases. These include:

• on a mortgage or re-finance
• leasehold transactions
• all dealings with unregistered land
• transfers by way of a gift or inheritance
• any other transfer for nominal or no consideration
• title investigation on a share purchase.

 Something to think about

If you own property and don’t have CRL insurance, consider searching and insuring now, even if you don’t have current plans for the property. If a proactive PCC decides to register (which it can do at any time until the land is sold), you may then find it impossible to get insurance, or only at a much higher premium and on unfavourable terms.

If you want to find out more about this, please contact a member of the Penningtons Manches real estate team.

---

Return to news headlines