Chancel Repair Liability is in the news again. A recent article in the Independent has highlighted the plight of thousands of homeowners caught up in a legal tangle dating back hundreds of years.
Many homeowners in all parts of the country have discovered that they may have to pay the repair costs of a local church – even if they have no connection with that church.
Over the last year or so they have received notices from the Land Registry to say that their property is subject to something known as Chancel Repair Liability (or CRL for short.) But in most cases these owners had no knowledge of this CRL when they bought their properties.
So what is CRL and why haven’t homeowners been aware of it before? You might expect that something like this would automatically be registered on property titles and therefore show up when a property is sold. But sadly that has not been the case until just recently.
Chancel Repair Liability dates back to 1530s but still affects many homes
CRL dates back to the 1530s when Henry VIII was dissolving the monasteries and selling off their land and properties. Often this land was subject to an ancient liability by the monastery which owned it to pay for repairs to a local parish church.
Strictly speaking, owners are only liable to pay for repairs to the chancel of the church. That is the Eastern part of a traditional church where the clergy conducted services, rather than the nave where the congregation sits.
When monastic land passed into private ownership this liability continued, and the new landowners would still have to pay for repairs to the church chancel.
The liability attaches to the land, so any owner of land subject to CRL could be asked to pay repair costs. And unlike some other payments which landowners had to make, such as tithes, it has never been abolished.
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Liability applies irrespective of a landowner’s religion
It doesn’t matter whether or not the landowners are members of the Church of England (or the Church in Wales) who attend the parish church – they are still liable to pay, even if they belong to another church or religion, or are atheists!
The problem for buyers was that over the course of time it tended to be forgotten that a piece of land was subject to CRL. When land was sold off the liability was often not mentioned in the title deeds, and so solicitors acting for subsequent buyers could not easily discover if a property was subject to CRL.
The result was that many homeowners were completely unaware that they might be liable to pay for repair costs to a church.
Lack of registration requirement meant buyers wouldn’t know about CRL
CRL was also largely ignored when the current land registration system was created.
Instead of requiring any liability for CRL to be clearly registered against a property’s title it was decided that it would be classed as what is known as an ‘overriding interest’ – along with many other old manorial rights.
This means that when you buy a property you purchase it subject to any overriding interests – even if you know nothing about them. There won’t be any details of them in the registered title so your solicitor won’t be able to tell you about them.
Your Solicitor should ask the sellers if they know of any, but the chances are that they won’t know.
So unless there was any specific mention of CRL in the registered title or the old title deeds, which has been rare, a buyer wouldn’t know anything about it.
CRL was thought to be obsolete – until the Wallbank case
Churches were often unaware that they had the right to claim for repair costs, and rarely tried to enforce payments. In fact by the mid-20th century CRL was often thought to be obsolete and of little more than academic interest.
In 1985 the Law Commission published a comprehensive report on the matter, pointing out that it still presented many uncertainties in property conveyancing. The Commission also recommended that parliament should abolish it.
However politicians failed to act, and the problem was largely ignored. But that changed in 1995, when the parish church of Aston Cantlow in Warwickshire needed to raise a large sum of money for repairs.
It discovered that a property belonging to a Mr & Mrs Wallbank was subject to CRL, and asked them to pay the cost of repairing the chancel, then estimated to be some £95,000.
Mr & Mrs Wallbank were unaware of this liability, and took the matter to court. After a lengthy and expensive battle which went to the House of Lords, they lost the case. So they not only had to pay the church’s repair costs but also substantial legal costs as well. They were subsequently forced to sell the property.
Parliament refused to abolish CRL despite Law Commission recommendation
Following that decision there were many calls for the government to resolve the problem. But rather than following the earlier report of the Law Commission and abolishing CRL they decided instead to amend the land registration system (which was then under wider review.)
With effect from 13 October 2013 a purchaser will take free from any CRL unless a notice of liability is registered against the property.
It is important to note that this protection only applies to purchasers, i.e. someone buying the property for money or other ‘valuable consideration’ (such as an exchange of other property of similar value.) If you acquire a property as a gift or inherit it you could still be subject to CRL even if the church has not registered any notice against the property at the moment.
Churches can still apply to register a notice against a property at any time even if no notice has been registered by October 2013. So if the property has not been sold since October 2013 an owner could find themselves subject to CRL at any time.
What to do if you receive a notice from the Land Registry
Owners receiving a notice from the Land Registry should consult their solicitor.
It is possible to contest the validity of a notice. This will require research to check whether or not the property was subject to CRL in the past – but this research can be difficult and the chances are that the church will have already carried out its own research before applying for registration of a notice.
Homeowners who have received a notice, or receive one in future, should check whether indemnity insurance cover was taken out when they bought the property, or by a previous owner.
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Has indemnity insurance been taken out?
Since the Aston Cantlow case was decided many solicitors have made a Chancel search when acting for buyers.
Such searches are not exhaustive, but merely check whether a particular property is within the parish of a church which was in existence before the 1530s. If the answer was ‘yes’ then there would be a potential liability for CRL.
In such cases the buyer’s solicitor would recommend that insurance cover be obtained – preferably paid for by the seller, but if not then by the buyer.
Anyone who has bought a property within the last twenty years or so might well find that they have the benefit of insurance cover against any claims. Of course if the buyer was not prepared to pay for a search or for the insurance then the buyer would have no-one but themselves to blame if it turned out that the property was subject to CRL.
What if the house I want to buy is subject to CRL?
Buyers who find that a property is liable for CRL will need to reconsider their offer. Although a notice of liability does not necessarily mean that a buyer will suddenly receive a demand for large sums of money – many churches have decided that they will not try to enforce liability – there is always that possibility.
Furthermore mortgage lenders are likely down-value a property which is subject to CRL, so obtaining a mortgage on such a property may be difficult.
Some churches have indicated that they will be prepared to release properties from continuing liability if the current property-owner is prepared to pay a one-off charge. Such an amount would have to be negotiated with the parish church council, but this could be a worthwhile solution to an ongoing problem.
All the problems associated with CRL could have been easily avoided had Parliament been prepared to abolish it. Until that happens it will continue to plague property conveyancing and will present many householders with the worry of facing potentially crippling bills.
Call Homeward Legal on 0800 038 6699 or use our quick quote system to get a straightforward conveyancing quote which will always include the all-important Chancel Liability Repair Search.