On Sunday 13 October 2013, a small piece of history will finally have come to an end when chancel repair liability ceases to automatically bind purchasers of affected land. Nick Roberts and Jane Dockeray review the changes.
On 13 October, chancel repair liability, which dates back to the times of Henry VIII, will cease to have overriding status on purchases. Prior to the reformation, a rector was responsible for the upkeep of the chancel whilst the rest of the church was the responsibility of the parish. When Henry VIII dissolved the monasteries and sold the rectorial land the liability for the repair of the chancel passed to the new owners of the land. Those who lived in such properties were known as lay rectors.
Then, fast forward approximately 400 years (or so), in 1925 the Land Registration Act was introduced, a corner stone to modern property ownership. The aim of the Land Registration Act has always been clear: to create a system of land ownership which is transparent and reliable, backed by a state guarantee and based on the principle of registration.
In pursuit of this aim, legislators have sought to refine the system of land registration particularly the extent to which the register is conclusive. In 2002, the government launched the first major overhaul of the system. As part of that overhaul, the Land Registration Act 2002 sought to extend those rights that must be registered at the Land Registry. In most cases, unless a property right or interest is registered, then it will not bind a purchaser of property. The exception to this rule is a group of interests known as overriding interests: overriding because they override the sale and continue to bind property owners after as well as before the transaction. Within this group of interests is chancel repair liability.
The anomaly of this category was recognised prior to the overhaul of the land registration system in 2002 but a 10 year lead-in time was given so that the parochial church council (PCC) (for English Churches) or the Representative Body of the Church in Wales (RBCW) (for Welsh churches) could protect the benefit of such liability through registration.
Perhaps chancel repair liability would have quietly slipped into history if it hadn’t been for the case of Mr and Mrs Wallbank, the details of which hit the headlines in 2007 when the couple had to pay £186,969 plus VAT for the repair of their local church’s chancel. The Wallbanks had fought for seven years against this liability but ultimately failed. The church, part of which was founded in the 13th Century, was in the parish of Aston Cantlow and the Wallbanks owned the adjoining farm and were ultimately found to be lay rectors. However, what was unusual about the case of the Wallbanks was that they had inherited the farm and the title deeds contained a clear liability for chancel repair. Unfortunately because of the clause there was no release from their liability. They had to sell the farm in order to pay for the repairs.
Such was the publicity that chancel repair liability shot to the top of property due diligence issues on purchases. In recent years, most property purchasers will do a search with a commercial provider. This indicates whether a property is in an area which might be affected by chancel repair liability but the search is an indicator of risk rather than being property specific. Most purchasers then take out relatively cheap insurance to protect against liability and never look back. In fact, insurers will often insist that no enquiries of the local church have been made and although a more detailed search can be made of the Record of Ascertainment held by the National Archives, these are not carried out in practice as they are not thought to be complete.
The changes that will come into force on 13 October mean that liability for chancel repairs will only bind future owners if the liability is registered against a property. This puts the onus on parish councils to establish whether there is any liability and whether to register such liability or run the risk of losing the benefit (and cash). What the changes do not mean is that after 12 October, chancel repair liability will fall away. It will only fall away after a property is sold for valuable consideration and the liability has not been registered. Until that sale, parish councils can still protect their right to collect chancel repair costs.
You may ask what happens if a chancel repair liability is protected by registration on the title? Initial indicators from some insurers is that they may still be willing to offer insurance against any potential liability although premiums are expected to be higher as a result of the apparent level of awareness of the right to recover.
Although there can be no doubt that the current reforms requiring registration of chancel repair liability (and other archaic groups of interest) are a step forward for land registration, a sympathetic postscript must surely be added for the cash-strapped PCC. During the years it took for the Wallbank case to eventually be decided, the cost of repairs to the chancel more than doubled. Churches nowadays are faced with falling numbers and higher bills. One parish was reported to have thought long and hard over whether to protect chancel repair liability but, in the interests of good relations, refrained. Instead, they optimistically asked for a voluntary donation but with little result.
It is not often, in modern times, that property law forms part of a moral maze in which the interests of private ownership are pitted against historic rights and cash calls to preserve the fabric of expensive, historical buildings. In general it seems that the church has not readily sought to protect its rights to raise funds for chancel repairs. Perhaps it recognises that the problem of funding church repairs stems not from the practicalities of modern land law but from the prevailing attitudes of modern society.