Chancel repair liability is still a worry when buying a home

Homebuyers are frequently puzzled when their Conveyancing Solicitor recommends that a ‘chancel repair liability search’ is made. This is hardly surprising as few people know what chancel repair liability is or that some homeowners can be made to contribute to the cost of repairing a church.

Some buyers may have seen reports suggesting that chancel repair liability is shortly being abolished, and that these searches will no longer be required. In fact the liability itself is not being abolished, but changes have been made which should help to make it easier to identify affected properties in future. 

Anyone buying a property will want to know whether it is subject to any legal matters which might affect its future use or could entail having to make unexpected payments. That is why Conveyancing Solicitors check property titles make a variety of searches on behalf of buyers.

While it is easy to understand the need to check whether the property is subject to a right of way, or whether the council might be building a new by-pass nearby, it is much harder to understand why the owner of a particular property might be made to pay for repairs to a church.

Chancel repair liability may be a medieval relic, but it has not been abolished

The basis of chancel repair liability goes back hundreds of years to medieval times. Some houses (and flats) stand upon land which is still subject to a perpetual liability to contribute towards the cost of repairs to the chancel of the parish church. (The chancel is that part of a traditionally laid-out church containing the altar, and where the clergy and choir sit – usually at the east end of the church.) 

For many years it was thought that this was something of interest only to academic lawyers, and that it was unlikely churches could now force any property owners to pay repair costs. But that view had to be rapidly revised when the courts confirmed that a homeowner in the village of Aston Cantlow, Warwickshire, did still have to pay towards the cost of repairing the local church.

It was then realised that there was a problem for homeowners as it was not always evident whether a particular property was subject to this liability. Even if the liability was not referred to in the title deeds or in the land registry title of a property, it could still be subject to the liability. 

Churches often had not asked for payments for many years, so previous owners of the property had no idea that there was any problem. It was only when churches were faced with rising repair costs and dwindling resources that some realised they could recoup some costs from certain property owners, and demanded payments. 

A defect in the land registration system

When the present land registration system operating in England and Wales was set up in 1925 it tried to ensure that all legal matters adversely affecting a property would be set out in the register. Then when someone was buying a property they could look at the register to see exactly what affected it.

However there was an anomaly in the legislation. A large number of matters were classified as ‘overriding interests’ which would continue to affect a property even when they were NOT mentioned in the title. These overriding interests included chancel repair liability.

Some of these interests might be apparent on inspection by anyone buying the property (e.g. if a tenant was occupying it under a short-term tenancy) but many would not (e.g. if the property was subject to ancient rights of the lord of the manor.)

Of course Conveyancing Solicitors always asked whether sellers knew about any overriding interests affecting the property. But in practice it was unlikely that most sellers would have any knowledge of any. So buyers had to take something of a gamble that there weren’t any.

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Costs can run into thousands of pounds

In most cases it would not matter much if something did subsequently came to light, since it would usually not entail any financial liability for buyers. But after the Aston Cantlow case it was realised that owners of properties subject to chancel repair liability could find themselves receiving bills for thousands of pounds, even when previous owners had never received any such demands. 

These demands are legally enforceable in the courts. It does not matter whether or not the property owner is a member of the church, the liability attaches to the property. 

It has therefore become customary for Conveyancing Solicitors to make a chancel liability search when acting for homebuyers. This search only costs a few pounds, but it will only determine whether the property is in a parish with a medieval church and therefore with a potential liability. A further more definitive search could then be made, which would take time and cost a lot more, so in most cases it is quicker and cheaper for the buyer to take out indemnity insurance.

In an attempt to make things easier for buyers Parliament decided that the law relating to overriding interests would be changed, as part of the substantial changes to the land registration system which were then being introduced. These changes were intended to make property registers more comprehensive. 

Changes to land registration system will help buyers – but not completely

Chancel repair liability along with many other overriding interests will now have to be registered by midnight on 12 October 2013 or they will lose their automatic protection. Churches which have identified properties in their parishes which are subject to the liability can apply to register a notice against the title of such properties. (If the property title is not yet registered, they can register a caution against first registration, so that the liability will be registered when an application is made for title registration.)

It is important to note that chancel repair liability is not being abolished. Nor does the fact that a church has not registered a notice by 13 October mean that they will lose the right to apply for registration – the right will only be lost once a property with registered title changes hands for ‘valuable consideration’ (i.e. for money or something else of value, not as a gift) or when an unregistered property is first registered.

So it is likely that Conveyancing Solicitors will continue to recommend chancel repair liability searches and indemnity insurance on properties which are currently unregistered or which have not been transferred for valuable consideration since 13 October 2013. 

A Church could still register a notice at any point up until a priority search is made just before completion. If this happens it will jeopardise the completion of the transaction and incur unrecoverable costs for the buyer such as legal and survey fees. 

If the title does reveal that the property is definitely subject to the repair liability, indemnity insurance can still be obtained against any future demands.  Your Conveyancing Solicitor will be able to help you with this.

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