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Chancel Repair Liability
Unsuspecting homeowners could be forced to pay thousands towards the upkeep of their local parish church under a little known and little understood medieval law.
The now infamous case of Glebe Farm has forced limited changes in the law, but for many that may be of no help due to a loophole in the new legislation.
Andrew and Gail Wallbank, the then owners of Glebe Farm, had no idea they faced any liability when they inherited it. No idea that is until one day they were shocked to receive a bill for £230,000 from the local church.
Their obligation arose under a 500 year old law dating back to the time of Henry VIII and the dissolution of the monasteries. Those who, at the time, took over what had been monastic land also took over the obligation to pay for repairs to the chancel of the local church. The law has never been repealed and is still in force today.
The Wallbanks fought the case for 18 years all the way to the Court of Appeal, but despite what many saw as the unfairness of the case they still lost. And to add insult to injury, they incurred legal fees along the way of £250,000.
To cover the £480,000 total bill they were forced to sell Glebe Farm, which was auctioned off with a guide price of £500,000 - just £20,000 more than they owed.
The Wallbank’s local diocese of Coventry’s justification for imposing this crippling burden was that “The parish had to bring this action because they couldn’t get any financial support from any other agency.” Oh well, that’s alright then...
And the Wallbank’s case may be just the tip of the iceberg. People in more than 5,000 parishes may unknowingly have the status of “lay rectors” and as such be subject to chancel repair liabilities. No one knows exactly how many homes are potentially affected, but the number is likely to run into the hundreds of thousands.
Under the Land Registration Act passed in 2002 (partly as a result of the Glebe Farm case, which was then making its 18 year passage through the courts) parochial church councils were given until 13th October 2013 to register any chancel repair liabilities in their parishes.
Liabilities not registered by that deadline will lapse. But liabilities that are will remain in perpetuity and there is now a scramble by churches to register them in time.
Homeowners who know about the potential liability are sitting tight waiting to see if they will get a letter from the Land Registry putting them on the hook. Most, however, have no idea of the risk and, for the unlucky ones, the Land Registry letter plopping through their letterbox to tell them of their legal obligations will be the first they have heard of it.
So, is there anything you can you do about it? Well, short of a change in the law, anyone owning a property that has been registered as having chancel repair liability by the 13th October 2013 deadline will be liable to any charges sent to them and there is nothing they can do about it. There are, however, a couple of precautionary steps you can take.
First, you can ask your solicitor to carry out a Chancel Repair Liability search. This is something that most solicitors would do anyway if you were buying, but which can still be done after you’ve bought. The search won’t tell you if there is a liability, but it will tell you if the property is within the boundary of land to which potential chancel repair liability may apply.
If the property is potentially liable then you can take out chancel repair liability insurance. Some argue that there is little risk because many churches don’t have the records to show who is liable and that they lack the resources to research this information elsewhere. That may or may not be so, but the whole point of insurance is... well, to insure.
Fortunately, chancel repair liability insurance is relatively cheap and will typically cover a property for up to 25 years. For most people it’s probably worth the cost of the insurance just for the peace of mind that comes with it.
After the 13th October 2013 deadline things should be clearer. Liabilities should, by then, be registered with the Land Registry so potential buyers will be able to find out about them before they purchase.
Unless new laws are passed to remove this liability completely, however, this will not bring an end to the problems caused by this Tudor law. There is a question over whether properties that have a liability registered against them will be able to get insurance at all. And, if they can, it may be prohibitively expensive. This in turn will have a knock on effect on the saleability and price of any affected properties.
The best advice in the meantime is to carry out a Chancel Repair Liability search. And, if the search does show a potential obligation, to take out the relatively inexpensive insurance. Then it’s a case of sitting tight and waiting until 13th October 2013 to see if you will be liable. And if you are, maybe that’s the point at which you write to your MP.