UK: Chancel Repair Liability

The idea that by owning land you have a liability for the costs of the repair of part of the local church roof is strange, but that is what chancel repair liability is. It has been described as "anachronistic, even capricious" and "one of the more arcane and unsatisfactory areas of property law".1 It is not easy to explain the liability, particularly since a landowner may be unaware of it despite the due diligence done when acquiring the land. From 13 October 2013 (thanks to the Land Registration Act 2002), the risk of the liability arising without a land owner's knowledge will decrease, but the liability and the fact that it attaches to the land will continue.

This client alert covers (very briefly) how this capricious liability arose and how the law is changing.

Historical Setting

The origins of land owners paying towards the cost of the repair of the church roof in England and Wales pre-dates Henry VIII, but when he dissolved the monasteries and sold off church land, he transferred what had previously been rectory land to lay people. Previously the rector had to repair the church roof over the part of the church from which he officiated (the chancel at the eastern end - roughly the altar and choir stalls), and he had land that effectively (through compulsory tithes) produced an income that he could use for that purpose. The effect of the sale of the church land and the reform of tithe laws was that chancel repair liability attached to the owners of what had once been rectorial land.

What this means is that chancel repair liability can only benefit churches built before 1536 (the dissolution of the monasteries). There are estimated to be about 5,200 of these churches - being about one-third of the parishes in England and Wales. It also means that there will be plenty of land in these ancient parishes that will not have the liability.

Often ancient rectorial land will have been sold off in such a way that there are now many separate owners, and each one of these can be made to pay the full costs of the repair to the roof. However, if they can find other owners of the former rectorial land they can demand a contribution from them.

Whether tenants are liable to pay directly for chancel repair costs is even more difficult. Our view is that most will have that liability indirectly to their landlords from boilerplate clauses in leases passing on all property outgoings to the tenant. Examining the tenant's direct liability position does not seem worthwhile, as express indirect liability will attach via the wording in most leases.

If the description of the property in question has names involving any of the following words, then lawyers are alert to the need to investigate chancel repair liability in some significant detail: "Glebe", "Rectory", "Parsons" or "Vicarage". If this is the situation it might even be worth making enquiries with the church.

Parochial Church Councils (PCCs) are now the body responsible for enforcing chancel repair liability.

Finding Out About Chancel Repair Liability

The issue of chancel repair liability came to public attention when the parish of Aston Cantlow sought chancel repair costs from Mr & Mrs Wallbank. In a case that went as far as the House of Lords and the European Court of Human Rights, it was, ultimately, ruled that the Wallbanks did have to pay for the chancel repair (initial bill about £100,000) and they also had a huge legal bill which ultimately meant they had to sell the very property that was the subject of the dispute. In the Wallbank's case, there was a clear reference to chancel repair liability in their title deeds. They were the owners of a property called "Glebe Farm". Usually it is extremely difficult to discover with absolute certainty that a property does not have chancel repair liability because until recently there has been no requirement for the liability to be registered at the Land Registry or anywhere else.

There are a number of difficulties in knowing whether chancel repair liability attaches to land. Parish boundaries have changed and the property might now be in a different parish to the one it was in in 1536. The PCCs' records of what was once rectorial land are not always complete. Some liabilities have subsequently been abolished or replaced by an annuity which can be hard to trace. It is never possible to be 100% certain as to whether a property has chancel repair liability even after a search of the National Archives where the best information is available.

Assuming no chancel repair liability has been registered at the Land Registry, the most common search carried out is a risk assessment to see whether the property might be at risk of having a chancel repair liability. The most detailed search that can be done is the search of the records at the National Archives, but there is a cost and it can take time. The common risk assessment searches are provided by organisations that also sell insurance against the risk, and all they do is assess the risk of the property being within a parish where chancel repair liability might exist.

As chancel repair liability is not being abolished, the need to investigate chancel repair risks will continue for some transactions involving real estate in England and Wales after 12 October 2013.

Registered Land

When land registration started in England in the 1920s, a number of interests in the property could bind future owners without the need for them to be registered on the title. These are called "overriding interests". These included chancel repair liability. The Land Registration Act 2002 started the process of ensuring that registered titles were a more complete record of all issues affecting the land and by phasing out some overriding interests (the sort that go back to feudal times). Chancel repair liability is one of the ancient liabilities that loses overriding status on 13 October 2013.

PCCs were given 10 years in which chancel repair liability kept its overriding status, and during that time they could register the chancel repair liabilities at the Land Registry. From 13 October 2013, if the chancel repair liability has not been registered at the Land Registry and if the land is sold for value, the chancel repair liability will cease to override (Section 29 Land Registration Act 2002). Once registered as owner at the Land Registry, the new buyer will be free from it.

Be aware, though, that buyers of land burdened by as yet unregistered chancel repair liability are legally obliged to disclose that liability to the Land Registry up to 12 October 2013. After that there will be no duty because its overriding status will end. A risk-based search is not sufficient to create that liability to disclose.

A transfer by gift (or any other transfer where the buyer does not pay for the property) will not have the effect of ending chancel repair liability as an overriding interest as it has to be a disposal for value. This means that chancel repair liability will continue to bind the owners of a property (whether registered or not) until a disposal for value takes place after 12 October 2013.

When chancel repair liability has been registered at the Land Registry, that liability continues binding the owner of the land in perpetuity.

Transactions after 12 October 2013

From 13 October 2013 if no chancel repair liability has been registered, the existing owner can still have chancel repair liability, but once the property has been sold (for value) and registered at the Land Registry after 12 October 2013, it will be free of chancel repair liability. What this means in transactions is that chancel repair liability will no longer need to be investigated.

If the property has been transferred after 13 October 2013 but was not sold for value (e.g. the transfer was by a gift), the chancel repair liability remains and some owners might want to take out insurance before the liability becomes certain or can arise. PCCs will still be able to register chancel repair liabilities they discover after 13 October 2013 as long as there has been no disposal for value.

Where a chancel repair liability is registered at the Land Registry, that liability will always affect the property and all transactions involving the property in the future.

PCCs are actively registering chancel repairing liability so we will keep finding properties affected by chancel repair liability. It may be that instead of the risk-based chancel searches and insurance, a niche industry will grow up around investigating chancel repair liability in detail and challenging registrations by PCCs. That remains to be seen.

Liability after 12 October 2013

Conclusion

Some people take the view that the risk of chancel repair liability being enforced in the absence of anything in the deeds and the title is really insignificant, but they admire the business acumen of the search provider/insurers. There has only been one case in the recent past and that involved a title that referred to the liability. Whilst there will gradually be more certainty over the existence of the liability, there will be titles subject to a register entry of the liability for chancel repairs. Larger landowners may just pay up knowing that the liability cannot (in practice) arise all that frequently. Smaller properties may be blighted by the registration.

There have been academic debates about whether chancel repair liability was properly characterised as an overriding interest and further debates about the precise meaning of Section 29 of the Land Registration Act 2002. The views we are expressing in this alert are our views and our understanding of the law as at 19 September 2013. It does not examine the legal position of the PCCs.

Footnote

1. In the House of Lords in Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank [2003]

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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