Chancel Repair Liability (CRL) is a medieval liability that obliges a landowner to repair, and pay for the repair, of the parish church’s chancel. Despite changes to the law in 2013 that were intended to lead to a gradual release of land from CRL, it continues to be a cause of concern for property owners and conveyancers alike. As a matter of course, CRL indemnity insurance is still relied upon on mortgages and purchases and there remains uncertainty over the practical effect of the 2013 law reforms.
In very broad terms, CRL can be traced back to the reign of Henry VIII. Before the Reformation, the rector of a church would be responsible for the repair of its chancel and the parishioners would be responsible for the rest of the building. On the Dissolution of the Monasteries the rector’s glebe land (to which his liability attached) was distributed into lay hands (the lay rectors) who then acquired that rector’s liability to repair the chancel. Nowadays, and with much of that rectorial land having been split up and developed, each and every occupant of it continues to be joint and severally liable for the CRL.
CRL will not apply to all parishes – it is estimated that about a third are affected – but where it does it can adversely affect the land’s value and marketability and could even lead to a substantial financial liability should the Parochial Church Council (PCC) seek to enforce theCRL as was shown in the case of Aston Cantlow v Wallbank and another  UKHL 37. In that case, the PCC pursued the Wallbanks for payment of £95,000 towards the costs of repairing the chancel. The Wallbanks defended the claim but after a protracted legal battle that went to the House of Lords, the Law Lords found in favour of the PCC. The Wallbanks were left with a £350,000 bill to pay as well as their own legal costs.
The Wallbank case certainly threw in to the forefront of many property practitioners’ minds what had previously been a largely forgotten and anachronistic liability. It is, however, difficult to identify with any great certainty whether a property will be subject to CRL. In the last ten years, it has become standard industry practice for conveyancers to undertake a CRL check which will review the parish boundary data and the Inland Revenue Indices at The National Archives but its results are not always definitive. A more comprehensive search of the National Archives can be commissioned (at a cost) but even these records can be incomplete, so may still not provide a conclusive answer. It may also inadvertently alert the PCC to the potential liability which could negate any indemnity insurance. For smaller properties these insurance premiums tend to be modest but for larger properties or farmland they can be costly. Furthermore, the standard policies will not always provide cover against all types of loss that arise from the CRL, such as the loss in the property’s value due to the CRL being noted on its title.
Before 13 October 2013, CRL was an “overriding interest” in that it continued to be enforceable even if a property owner was unaware of it and it was unregistered. As of midnight on 12 October 2013, the Land Registration Act 2002 changed the position so that CRL, together with other historical overriding interests, lost this overriding interest status. This meant that since that date, if a property is transferred for value and there is no registered notice of the CRL on the property’s Land Registry register, then the new owner takes the property free of the CRL. This change in the law shifted the onus on to the PCCs to identify the land that was subject to CRL and then register its interest at the Land Registry with a Unilateral Notice. In advance of the 12 October 2013 deadline, the Church Commissioners advised allPCCs to consider whether CRL could be levied against properties in their parish and then consider registration of Notices if appropriate.
A stated above, an important aspect of the change in the law in 2013 is that a property owner will only take a property free of the CRL on any transfer for value provided that no CRL Notice has been registered at the Land Registry. On any gift, assent or mortgage the CRL will continue to bind the property even if no CRL notice is registered. In those circumstances appropriate indemnity insurance should be sought. A risk also remains to a purchaser where contracts have been exchanged on a property that carries no CRL notice on its title but a notice is subsequently registered by the PCC between exchange and completion. Thereafter, indemnity insurance may not be an option. To avoid this risk, if a CRL search reveals a potential CRLliability then insurance should be sought at the point of exchange or alternatively pre-completion searches could be used to protect the title against the registration of a CRL notice if there is a short gap between exchange and completion.
The post 13 October 2013 position is confused further by the fact that the Land Registry will continue to register CRL Unilateral Notices against a title even where it has been transferred for value after that date. The Land Registry will not look into the validity of any such application – which is its standard practice for the registration of all Unilateral Notices – until the Notice’s validity has been challenged by the property owner. This does therefore lead to the possibility of a landowner facing a lengthy (and possibly costly) dispute with the PCC should there be any disagreement over the validity of the registration of that Notice.
The current situation is not perhaps the legal revolution that was anticipated with the removal of CRL’s overriding status. In the absence of a firm approach from the Land Registry and some uncertainty over the effect of the changes to the law, there continues to be a reliance on the insurance industry to provide peace of mind to clients. In practical terms the position post and pre 13 October 2013 look very similar. Further reform is clearly needed but is unlikely to follow any time soon. Lord Avebury’s Chancel Repairs Bill 2015, which had its first reading in the House of Lords on 4 June 2015, proposed an end to the liability for Chancel Repairs arising from the ownership of land but there has been little movement since.