You’ve probably heard of chancel repair liability and the huge bills faced by some property owners. You may also be aware that liability is changing with effect from 13 October 2013. But do you understand the implications of this?

What is chancel repair liability and how does it currently apply?

Chancel repair liability is a financial liability imposed on landowners. The purpose of the liability is to fund repairs to the chancel of a medieval church. As the liability first arose in 855 (and has been subject to numerous changes since that date), attaches to the land itself and can extend to property situated a long way from a church, it is extremely difficult to say with any degree of certainty whether or not a particular property is affected. Even if you have a new build and have no idea where the nearest church may be, there’s a risk that you could be asked to pay up. It affects commercial properties in exactly the same way as residential properties. And while it’s fairly unlikely – though not impossible – that a tenant will be directly liable, there’s a good chance that liability will be passed on under the terms of the lease. Essentially, if you have an interest in property, you may be liable.

How can landowners protect themselves against liability?

Chancel repair liability is currently an overriding interest which means that you can be liable even if you just bought a registered property and even though there was nothing on the title to indicate the existence of the liability.

The case you’ve probably heard about is the 2003 House of Lords decision in which the Wallbanks were found liable to pay a £100,000 repair bill for the repair of a local chancel. Since then it has become standard practice for purchasers to carry out chancel searches and, where necessary, to purchase insurance to cover the bill if a claim is ever made against them.

However, prior to this case it wasn’t common practice to insure which means that landowners who acquired their interest prior to 2003 usually won’t be protected.

How can churches with the right to claim for chancel repairs protect this right?

At the moment there’s no need for churches to protect the right as its very existence is sufficient to enable them to make a claim. However, as this is about to change, churches that benefit from the right to claim for chancel repairs are able to apply to the Land Registry to place a notice of this right onto affected registered titles. These notices are currently free to place and will ensure that they will be able to make a claim at a future date (it doesn’t mean that they are intending to, only that they are making sure they don’t lose their right to do so).

If a notice of this kind is placed on the registered title to your property on or prior to 12 October 2013 you will be notified of this but, unless you can prove the church doesn’t in fact have any right, you won’t be able to remove it.

For unregistered properties the right can be protected in a similar way by lodging a caution against first registration (again with no fee to pay).

What will be different after 13 October 2013?

From 13 October 2013 chancel repair liability will cease to be an overriding interest. But what does this actually mean at a practical level?

Does Chancel Repair Liability come to an end on 13 October?

No, liability does not come to an end. Landowners may still find themselves responsible for chancel repair liability in the following circumstances:

  • The current freeholder owned the property prior to 13 October 2013.
  • The current freeholder acquired the property on or after 13 October 2013 but didn’t give “valuable consideration” for it (it’s not completely clear what amounts to valuable consideration – market value certainly does, but a transaction at any kind of an undervalue may not).
  • The right to claim has been noted on the registered title of the property.
  • A caution against first registration was lodged and a notice of the right to claim was added to the registered title when the property was first registered.

If I acquire a property on or after 13 October is there any risk it will be affected by chancel repair liability?

Yes, even if you acquire property after 13 October 2013 you may still find yourself responsible for chancel repair liability in the following circumstances:

  • The right to claim has been noted on the registered title of the property.
  • You’re buying an unregistered property for which a caution against first registration was lodged and a notice of the right to claim is added to the registered title when the property is registered.
  • There’s no valuable consideration given for the property (for example, it’s a gift, is left to you in a will or you pay a reduced price to buy from an associated seller).

However you will not be liable if you pay full market value for the property and no application to add a notice of the right to claim to the title had been received by the Land Registry on or before 12 October.

Will the church still be able to register notices in respect of chancel repair liability from 13 October?

Yes, in the following circumstances (though there will be a fee to pay):

  • The freehold of the property is still owned by whoever owned it prior to 13 October 2013.
  • The freehold of the property has been transferred to a new owner, but the new owner did not give valuable consideration for it.

If I acquire a property on or after 13 October 2013 do I need to consider chancel checks and insurance?

Yes, in the following circumstances:

  • You are not giving valuable consideration for the property.
  • If buying a registered property, there is a notice on the title of the right to claim – there’s little point in doing a check as you know the liability exists, but you may be able to obtain insurance.
  • If buying an unregistered property, there is a caution against first registration in respect of this liability (as above).

Conclusion

In summary, liability continues until such time as the land is purchased for valuable consideration on or after 13 October 2013. Following such a purchase (assuming no notice of the right has been registered) the landowner will not be liable and nor will anyone who acquires the land from or through him. However, prior to such a purchase the landowner, together with any tenant or mortgagee, must be aware that chancel repair liability may still be enforced.