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Chancel repair liability explained - is insurance still required?

Chancel repair liability is an ancient liability – why is it relevant today?

If land is subject to chancel repair liability, the owner is obliged to contribute towards repairs to the chancel of a medieval church. Although the liability dates back to medieval law, it attaches to former rectorial land. This land is likely to have been divided up into numerous parcels and, therefore, the liability could affect a property that you are buying.

It is important to note that if your property is subject to chancel repair liability, you could be liable for the entire cost of repairing the chancel of the church. The Parochial Church Council (PCC), which is now responsible for the upkeep of the parish church, does not have to divide the liability between all owners of land which is subject to the liability.

What searches should be carried out?

One of the difficulties with assessing whether the liability affects land is that the land to which it attaches will not necessarily be close to the church. A simple check to see whether a property is near a medieval church is not sufficient and it is not safe to assume that properties in urban areas will necessarily be free from any chancel repair liability. 

Very occasionally the title register will expressly refer to the liability. In all other cases, a conveyancing search should be made to reveal whether the property is located in an area which is potentially subject to chancel repair liability.

A "full" chancel repair liability search can be carried out at The National Archives but even then records are often incomplete and may not give conclusive evidence that the property is free from or indeed subject to the liability. 

Careful consideration must be given as to whether a full search should be carried out when purchasing property. If the result confirms liability for chancel repair, the purchaser is unlikely to be able to insure against the risk of being asked to contribute to repair of the chancel or the insurance premium is likely to be significantly higher (if obtainable). Similarly any other investigation or enquiry of the PCC must be considered against the likelihood that this will prejudice the availability of insurance.

Is chancel repair liability ever enforced?

Yes. A House of Lords decision in 2003 (Aston Cantlow v Wallbank and another [2003] UKHL 37) made it clear that repair liability is enforceable and the defendants were liable to pay about £350,000 (including legal costs).

The case highlighted that the liability is ongoing and can involve significant sums of money.

How did the law change on 13 October 2013?

Before 13 October 2013, the right to enforce a chancel repair liability was an "overriding interest" under the Land Registration Act 2002. This meant the liability was enforceable even if the owner of the property was unaware of it and the liability was not registered.

As of 13 October 2013, the position changed and the right to demand repair costs is only enforceable against an owner of land if it has been protected by registration of a notice against the registered title. If the land is unregistered, the liability can be registered by way of a caution against first registration. 

In advance of October 2013, the Church Commissioners advised all PCCs to consider whether chancel repairs could be levied against properties in their parish. A lack of awareness by a PCC of the right to seek a contribution to repair may mean that the cost of repairs has not been claimed in situations where a liability exists. It was therefore in the interests of the PCCs to discover and register chancel repair liabilities. On the other hand, PCCs may decide not to enforce liability to maintain good relationships with people in the parish.  

It was widely anticipated that as of 13 October 2013 a purchaser of land (for valuable consideration) would take free of chancel repair liability if it had not been protected by notice in the register. 

However, the Land Registry cast doubt on this assumption as it subsequently confirmed that it will continue to register a notice at any point even following a transfer for valuable consideration. 

In reality the potential for liability has therefore not changed. This is at odds with how the system was expected to work.

A unilateral notice can be registered without the beneficiary making out its claim in full and whilst a landowner can apply to remove the notice, a dispute is likely to be time consuming and costly to pursue. Such action would also invalidate any insurance.

Do you still need indemnity insurance?

In light of the Land Registry's position, if a conveyancing search reveals the property is potentially subject to chancel repair, indemnity insurance is recommended even if there is no notice on the registered title. 

Will there be further reform?

The current position seems contrary to the intention behind the changes to the overriding nature of chancel repair liability. It is likely that the position may be reviewed in the future to give clarity and certainty to both property owners and PCCs.

A Private Members Bill that proposed the abolition of chancel repair liability was put forward by Lord Avebury in July 2014. However, the government announced in January this year that they are not developing any proposals for reform at present.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at January 2015. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
  
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