Chancel repair liability 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 because few people know what chancel repair liability is or that some homeowners can be made to contribute to the cost of repairing a church.

In 2012, the government looked at reform of chanel repair liaibility and, while deciding against abolishing the liability, introduced changes designed to help make it easier to identify affected properties. However, in December 2017, the Law Commission announced it will examine chancel repair liaibility over the next three years as part of its commitment to law reform.

Anyone buying a property will want to know whether it is subject to any legal matters that might affect its future use or could entail having to make unexpected payments. That is why conveyancing solicitors check property titles and 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.

The basis of chancel repair liability goes back hundreds of years to Henry VIII and the establishment of the Church of England. Some houses (and flats) stand on land that 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 this was something of interest only to academic lawyers and it was unlikely churches could now force any property owners to pay repair costs. But that view had to be rapidly revised in 2008 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 there was a problem for homeowners because it was not always evident whether a particular property was subject to chancel repair 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 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.

When the present land registration system operating in England and Wales was set up in 1925, it tried to ensure all legal matters adversely affecting a property would be set out in the register. 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" that 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 (for example, if a tenant was occupying it under a short-term tenancy), but many would not (for example, 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 most sellers would have any knowledge of any. So buyers had to take something of a gamble that there were no overriding interests.

In most cases, it would not matter much if something did subsequently come to light, since it would usually not entail any financial liability for buyers. But after the Aston Cantlow case, the realisation dawned 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 is attached 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 establish whether the property is in a parish with a medieval church and therefore comes with a potential liability.

A further, more definitive search can then be made, which takes more time and costs a lot more. In those cases, it is quicker and cheaper for the buyer to take out indemnity insurance to protect against any future claims.

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

Chancel repair liability, along with many other overriding interests, had to be registered by October 13, 2013 or lose their automatic protection. Churches that had identified properties in their parishes that were subject to the liability could apply to register a notice against the title of such properties.

Chancel repair liability has not been abolished. Nor does the fact that a church had not registered a notice by October 13, 2013 mean they lost the right to apply for registration - the right would 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 conveyancing solicitors continue to recommend chancel repair liability searches and indemnity insurance on properties that are currently unregistered or that have not been transferred for valuable consideration since October 13, 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 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. Talk to Homeward Legal's team now on to instruct a conveyancing solicitor experienced in dealing with chancel repair liaiblity.

This article was updated on July 4, 2018.