Chancel repair liability: the latest

Chancel repair liability: the latest

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Author: Claire Hayes

Chancel repair liability is an ancient liability which attaches to land and requires affected owners to meet the costs of repair of the local church chancel.

Until recently, the legal status of this liability was that of an overriding interest. This meant that it did not need to be registered at the Land Registry in order to bind owners of land.

On 13 October 2013, this changed. Chancel Repair Liability ceased to be an overriding interest however it continues to exist and current owners of land remain liable.

The significance of this change is that the liability must now be protected by registration against the title to land if it is to bind a purchaser of land for valuable consideration - most arms length sales should fall into this definition. If it is not so protected, a buyer can take free from it.

What does this mean for purchasers?

As the October 2013 deadline approached there was a drive by the Church of England to register chancel repair liabilities. According to a Sunday Times report, this resulted in 247 parochial church councils having registered notices against 12,276 homes or plots of land as carrying liability to pay.

Notice is usually by way of 'unilateral notice' as this does not require the co-operation of the land owner. Where notice has been entered to protect a valid liability the land will remain bound by that liability notwithstanding any change in ownership.

Can parties assume that no liability will be enforced when no notice has been registered to date?

Sadly not. There remain a number of circumstancesĀ - and legal transactionsĀ - where a potential chancel repair liability must be taken into consideration and the parties will need to think through the likelihood of liability being enforced before or after completion.

For example, if there is to be a delay between exchange and completion, there is scope for a notice to be registered before a sale is completed. A share purchase will effectively change ownership of land but there is no legal change of ownership - if chancel repair liability exists it will continue to apply regardless of registration.

Absolute certainty on whether chancel repair liability exists in relation to a piece of land can be costly and difficult to establish. It requires a search of the records at the National Archives - which themselves are incomplete.

In recent years a practice has developed whereby solicitors carry out a simple search through a commercial agency to establish by geographical area whether or not a property is potentially affected. The quickest and cheapest solution to a positive result has often been to put insurance in place to cover costs if the liability is enforced.

For the time being it is thought that this practice of a simple geographic search is likely to continue for the majority of transactions and it will then be for solicitors and their legal advisers to consider the risk of liability being enforced in the particular circumstances of each case.

Land Registry approach

Early indications are that the Land Registry is taking a cautious approach to the change in status of chancel repair liability. It has advised that if it receives an application to register a notice of chancel repair liability it will register the notice - even if there has been a transfer of the land since 12 October 2013.

Its reasoning is that it is not for the Land Registry to enquire into the validity of an interest which is noted, just that the nature of the interest claimed is an interest capable of being protected by notice.

What should you do?

Land owners and their advisors need to remain alert to the possibility of chancel repair liability being enforced or registered against land.

In practice, it is hoped that the Church's drive to register liability is on the wane.

If a unilateral notice is entered against the title to land, the Land Registry will inform the land owner and the land owner can apply at any time to cancel the notice by requiring the person who registered it to prove the validity of its claim.

For this to be done effectively land owners need to ensure that their address for service and contact details at the Land Registry are up to date. More information is available on our article 'Property owners are at risk if Land Registry addresses are out-of-date'.

Practice is likely to change and develop the further the property industry moves away from the critical date of 13 October 2013 and it will be important for professional advisers to keep abreast of current practice.

About the author

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Claire Hayes

Associate

03700 86 8462

Claire is an Associate in Shoosmiths real estate team. She has experience of a wide range of transactional matters and in particular specialises in residential development work. She advises developers, house builders and land owners in both the private and public sectors.

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