Chancel Repair Liability

[Marches]

Very interesting and useful thread. Would be grateful for any comments from conveyancers or other legal people on the following:

 

I completed on a property in July 2009, and prior to completion my solicitor did a chancel search which revealed potential liability for chancel repair, so he requested an "allowance" (which I understand to be the cost of an insurance indemnity) of about £130. The vendor's solicitor agreed to pay it.

 

Now, 10 months after completion, a newly-arrived neighbour mentioned that their solicitor had insisted on insurance against Chancel Repair Liability. So I queried my solicitor who checked his file and he admits that he failed to obtain this allowance on completion. (He is normally a particularly diligent character .)

 

He is saying that the chancel searches only reveal potential, not actual, liability; that the chances of the C of E being able to prove actual liability are very slim; and even if there was liability, then there would be many other properties which would also be liable... He says that "if I wish" he could go back to the vendor's solicitor and request the payment, but he suspects that they would baulk at the prospect.

 

I intend to respond to him on the basis that the potential liability was revealed prior to completion and he deemed then that indemnity should have been provided, the vendor's solicitor's agreed to pay at the time, so it should have been done then, it must be done now, and that he should request the payment as previously agreed by the vendor's solicitor, and establish the indemnity cover.

 

I have no doubt that it would be prudent to have this cover - it is a property dating from the C17th, the risk of a demand for chancel repairs may be low, the chances of actual liability being proven may be low, but the impact if there is liability is too high when set against the insurance cost of £130. The whole business is an anachronistic money-generating nonsense but that's not the point.

 

You can see where I'm coming to:

 

(1) Can the vendor's solicitor refuse to pay for the indemnity, despite having agreed to, because my solicitor failed to see it through at the time, and 10 months has now elapsed?

 

(2) If the vendor's solicitor refuses to pay, then is my solicitor liable, because he failed to see it through at the time? (Presumably just as he expected me to have Chancel Repair Indemnity, he will have Professional Indemnity)

 

(3) Or will it end up, as usual, with Muggins the Consumer (i.e. me) having to pay up?

[JonCris]

Marches only a court can decide who's liable to pay & to suggest one or the other is pure speculation although I suspect as your solicitor has a duty to you whereas the other doesn't yours could be held negligent. However the negligence might only come into affect if their was a 'proven' loss to you which might only manifest itself either if the church come knocking or you have difficulty selling

 

either way I should ask your solicitor to sort it & see what happens

[chrismbee]

Big thanks to unclebulgaria67:)

The link showed much more attractive premium and cover than those originally provided by my solicitors. Indeed, they have analysed the cover and acknowledged that it presents far better value than ChancelSure.

Bearing in mind that a claim made in today's world will include modern consultancy/architect rates, it is easy to see that the sums involved could be far higher than ever thought possible years ago; we have opted for £1m liability indemnity, in perpetuity.....

Although I'm not legally qualified to answer Marches' latest points in full, I would personally pursue the solicitor to get an insurance policy put into place, either at the former owners' cost, or at the solicitors' cost, especially as it sounds as if they have been negligent, to some degree.

An important factor to bear in mind is that the Church aren't bound to identify any other "lay rectors" ie. a claim could be levied solely against you, so forget about the fact that there may be 1000's of other properties in the catchment area! For the sake of £75, I'd get the insurance even if I couldn't get somebody else to pay.

[Marches]

 

either way I should ask your solicitor to sort it & see what happens

 

Thanks for the quick response, also to chrismbee. That's what I will do on Monday. Don't get me wrong, I like my solicitor and don't want to get into litigation with him, as I suspect there would only be one 'winner'. The most important thing is to get the cover established.

[Marches]

Just to assist this is a link to the company I came across that provided cover in perpetuity. I don't know of this company and suggest that you conduct research/talk to your solicitor.

 

Policies & Pricing

 

Just to close the loop on this, my solicitor checked out this chancelnsr policy and ok'd it, I took one out, he will try to recover the premium from the vendor's solicitor, and failing that will refund me himself given that, as previously explained, he omitted to get the cover on completion a year ago. And as neither of us has received a notice of a chancel liability having been put onto the Land Registry since completion - and he has checked the latest entries, too - and prior to commencement of the policy, the policy is valid. £75 for peace of mind, which will be refunded anyway, and thanks to unclebulgaria67 in particular for finding it, because it's good value (£1m cover in perpetuity), and transferable too should I need to sell the property before 13 October 2013.

[gosling67]

Everywhere in England and Wales is in an ancient parish, and every parish had a pre-reformation church. Later parishes were subdivided and some of the ancient parish churches no longer exist, but you cannot assume that because you are now living in a parish where there is a modern church, you are not in the ancient parish of a pre-reformation church. If you solicitor does a chancel check search this will reveal whether the house is in an ancient parish or tithe district where there is potential chancel repair liability. It is true that the post-reformation churches are not entitled to claim for chancel repairs. This is because it was at the reformation that Henry VIII dissolved the monasteries and sold off their rectories (including the right to collect tithes) to lay rectors. If the original church of your ancient parish has been demolished, there is no problem.

 

Thanks Pommymike. Have used the internet to find the house we're purchasing is in the medieval parish of Acton, but that the pre-reformation church no longer exists. The current parish church, built on the same site, dates from 1866. So, no need to cough up for a search or insurance. Very happy :o)

[Frank G]

Hi all,

 

Would really appreciate some advice here as this is all new to me!

 

My situation is as follows:

• I am just about to exchange/complete on a property that has been classified in a chancel screening report as 'potential risk identified'
  
• Having read some of the forums discussion points I have decided I am really not happy with this potential liability......therefore my preferred option is to have a full search conducted on the property before I buy.
  
• If the search comes back as no liability to my specific property am I correct in assuming all is ok and no claim can be made or do I still need to protect myself before the Oct 2013 deadline, just in case....??
  

Obvioiusly I will get my solicitor on the case but I would appreciate others views and opinions

 

Yours and confused.....

 

Frank

[unclebulgaria67]

Here is a link to a company that specialises in this area. If you read all the information that they provide, it should answer all the questions that you have.

 

http://www.chancelnsr.co.uk/index.html

 

The policies that are available only charge a 'one-off' premium cost and these are typically less than £100.

 

If I could get reasonably priced cover, without needing searches/solicitors costs to confirm whether there is any liability, I think I would just take out the Insurance cover. I cannot see the point of spending money on various fees, when the Insurance is cheaper.

Edited August 30, 2010 by unclebulgaria67

[JonCris]

Hi all,

 

Would really appreciate some advice here as this is all new to me!

 

My situation is as follows:

 

• I am just about to exchange/complete on a property that has been classified in a chancel screening report as 'potential risk identified'
  
• Having read some of the forums discussion points I have decided I am really not happy with this potential liability......therefore my preferred option is to have a full search conducted on the property before I buy.
  
• If the search comes back as no liability to my specific property am I correct in assuming all is ok and no claim can be made or do I still need to protect myself before the Oct 2013 deadline, just in case....??
  

Obvioiusly I will get my solicitor on the case but I would appreciate others views and opinions

 

Yours and confused.....

 

Frank

 

If you do an in depth search which confirms liability you may not be able to get insurance, so best not to. You could ask the vendor to insure as part of the deal

[pommymike]

It is very likely however that if you have a full search you will find there is no liability. This is because the land affected is generally only the land which was owned by the lay rector who received the tithes from the rest of the parish, out of which the lay rector would have had to pay tithes if he had not been the lay rector (i.e. the person to whom the tithes were paid). The tithes on all the other land ended in 1936 when compensation was paid by the Government to compensate the tithe rentcharge owners (lay rectors) for the extinguishment of tithe rentcharges, and most of which ("the sum required for repairs") was paid to the Diocesan Boards of Finance on behalf of the Parochial Church Councils. Liability therefore passed to the Parochial Church Councils. Normally the rectorial land e.g. the church land, would not have been tithed so it was only if the lay rector happened to own some other land that the liability is continued to the extent of the tithe rentcharges payable out of it (i.e. probably less than £1 per year).

Because the sums involved as so small, apart from one case (Aston Cantlow) there is no report of any case where a individual has been sued since 1936 for chancel repair liability. There was a case in the 1950s concerning the Chivers Company v the Air Ministry. That concerned a liability originally of a Cambridge College which would have received compensation stock equal in value to the "sum required for repairs". No individual was involved. No one has argued in such a case that there is no longer any custom for the lay rector to repair the chancel - an argument which would be likely to succeed except in unusual cases similar to Chivers v Air Ministry and Aston Cantlow v Wallbank where substantial rectorial land or compensation stock was available to the defendant or his predecessors. Chancel repair liability relies on the ancient custom which in practical terms generally no longer exists. That is why many people think that the chancel repair insurance industry is a bit of a [problem].

[jcl109]

I am currently selling my house and the buyers solicitor performed a search which indicated that our house may be liable for chancel repair. However the local church to which it refers is no longer a CofE church as it fell into disrepair and is now owned by the historical chapels trust which is a charitable trust. So I am a little confused as to whether we would be liable or not?

[unclebulgaria67]

I don't know whether such liability rights would ever be passed to any trust. Would the trust register any rights before the 13th October 2013?

 

You could check with the charitable trust what the score is and make enquires companies that specialise in this area.

 

http://www.chancelnsr.co.uk/index.html

 

I take it that the buyers solicitor is looking to take out liability type cover and for you to pay the premium. As these premiums are 'one-off' amounts and are not normally that much, you might opt just to pay the relevant amount. But before you do so, a few phone calls would not hurt. If you cannot get definate reassurance on this matter that there is/cannot be any liability, then just tell the buyers solicitor to obtain the relevant liability Insurance and provided this is less than (say) £150 as a 'one off' premium you will reimburse this.

[pommymike]

I am currently selling my house and the buyers solicitor performed a search which indicated that our house may be liable for chancel repair. However the local church to which it refers is no longer a CofE church as it fell into disrepair and is now owned by the historical chapels trust which is a charitable trust. So I am a little confused as to whether we would be liable or not?

James Derriman in his book, page 41 states "The Pastoral Measure 1983 states that 'on a declaration of redundancy taking effect, any liability of a PCC or rector (including a lay rector) for the repair and maintenance of the redundant building shall cease'. (Halsbury Statutes Vol 14 p 1030). So there is no Chancel Repair Liability for redundant churches.

[pelham9]

That's the bad news the good news (if you can call it that) is that their Lordships also ruled that the church must register all property that may be subject to such a charges within 10 years of their 2003 ruling by the year 2013 otherwise they will use the right to enforce this levy.

 

 

Sorry, Joncris for quoting your post out of the context of your subsequent remarks but I have used it because my solicitor said exactly the same to me yesterday and it it is inaccurate and a lot of solicitors are using only the sense of your paragraph withourt as it were reading on. I have done a lot of research!

 

The law has changed somewhat not because of the ruling in the Wallbank case but because of a transitional provisional order introduced after the Wallbank ruling. Up to this order the church had an overriding interest in the land involved in chancel repair liability and still does so until 2013. This simply means that after 2013 the interest must be registered to be effective for those to whom it has not applied previously - an overriding interest does not have to be registered.

 

so

 

a) as in the Wallbank case where the liability is in the title deeds it will still be effedtive on both present and future owners of the land. They all have to pay if requred to do so.

 

b) If the church does register their interest before 2013 the liability is effective on present and future owners of the land. They all have to pay if requred to do so.

 

c) If the church does not register an interest before 2013 then they lose the right to levy the liability on future owners of the land only. Present owners will have to pay if required to do so.

 

People in a) and b) still may have to pay and may still suffer conseqential loss of property value.

 

Those in c) may still have to pay but their property value will not be eroded

 

 

• No wonder Joncris uses the words in brackets. The previous government gave very little putting the onus and odium onto the Church of England.
  

[pommymike]

pelham 9,

You are right about the 10 year transitional period being under the Land Registration Act 2002 (Transitional Provisions) Order 2003 and not the direct result of anything said by the Law Lords in June 2003. The new Land Registration Act had then already been passed, omitting chancel repair liability as an overriding interest (because the Court of Appeal had said it was against the Human Rights Act for the church, as a hybrid public body, to charge an unfair tax). The effect of the new Act, would therefore have been that any chancel repair liability not protected by a notice at the Land Registry (or caution against first registration) against the title of the lay rector, would be postponed in favour of any buyer i.e. would not affect the buyer who purchased after the new Land Registration Act was brought into operation i.e. 13 October 2003. The effect of the Order is to postpone this until 13 October 2013 to give the Churches a chance to register their interests.

This would apply whether or not the chancel repair liability was mentioned in the title deeds. Existing owners will only be liable (whether or not a notice is registered against their title, and whether or not the liability is mentioned in their deeds) until they sell the property. They will only remain liable afterwards if they were served with a notice of claim by the PCC under the Chancel Repairs Act 1932, before completion of the sale. E.g. if at the time when they are about to sell, the Church finds that the chancel of the church building needs £1,000 spent on it, that will be the amount stated in the notice and they will not be liable for anything further. Of course the lay rector may not be liable for the full amount, as the Record of Ascertainments for the Parish made by the Tithe Redemption Commissioners in 1936 may include more than one Declaration of Merger, so there may be several lay rectors between whom the liability is apportioned, and if the lay rector only owns part of the land in respect of which the Declaration of Merger was made, he will be entitled to claim a contribution from the other owners of that land.

Future owners will only be liable if a notice was registered against their title when they purchased. As regards liability based on Enclosure Awards, in the Aston Cantlow case the actual Enclosure Award could not be produced, and Mr and Mrs Wallbank's lawyers should have argued more strongly that it was for the claimant PCC to prove strictly the contents of the Enclosure Award, as being admonished for failure to do your duty as lay rector by the Consistory Court was a quasi-criminal matter (you could be sent to prison for contempt of court if you failed to pay as happened in Hauxton PCC v Stevens in 1929). The mere fact that chancel repair liability was mentioned in the deeds should not have been regarded as sufficient, as it may not have been correct.

[haradanhead]

I've read all the postings on this - very informative. In a nutshell then am I right in thinking that any homeowner who doesn't have this in perpetuity type of insurance policy in place before the 2013 deadline is, basically 'stuffed ' if their property is added to this register. You then won't be able to insure as it's a definite not potential liability and you won't be able to sell ( or at least not sell for anything resembling market value) as the liability will be easily shown up in a conveyancing search. If this is right, can wiser heads confirm that you can insure retrospectively, i.e. not at time of purchase ( I bought my property in 2000 before this was a 'live' issue) and that you can't DIY, it has to be done through a solicitor? Finally does anyone have any more knowledge of /comment on conveyancingdata.com website mentioned in an earlier post - they seem to be offering £1000000 chancel insurance for less than £30 which is a lot less than other prices I've seen.

[Fredsie]

Yes, that seems to be the situation.

 

Insurance does tend to be taken at purchase time, but I don't see any reason why you shouldn't be able to buy cover at any time, as long as a potential liability has not been confirmed by a search, as mentioned previously.

I also don't see in principle why you should need solicitors to be involved. It may be though that the insurers prefer it this way because they can get reliable assurance from them that there is still no established liability. On your own you might have a harder time convincing them of this. No harm in contacting one of them and asking.

[unclebulgaria67]

Pass. Normally you are not able to arrange a standard Insurance product, for an after the event situation. The Insurances that are available seem to be for people involved in buying properties and not the current owners.

 

I would suggest that you phone a few of the companies offering the cover and raise the question. See if you can get them to confirm in writing the reassurance that you are seeking, so in the event of a future claim, you have some protection, if they tried to wriggle out of a claim.

 

In regard to the type of Insurance not being available after the relevant date in 2013, I think that it would be likely the Insurers would withdraw some policies or change the terms.

[haradanhead]

Thanks for those replies Fredsie & unclebulgaria67. I've emailed a company (chancelnsr) to see what they say - since my first post I've discovered that someone in the village who has lived here for many years has been able to take out this type of insurance so I'm hopeful on that point at least - it would after all seem terribly unfair if policies can only be bought at time of purchase - as my solicitor said , in 2000 when I bought the search for chancel repair liability wasn't a 'hot potato'. I read a useful blog on Clutton Cox website which pointed out that it is up to individual PCC's to enforce liability so now am thinking another reason to insure if it's possible is that just because a kindhearted current PCC may not travel that road who's to say things might not change in the future when money gets even tighter and churches get older!

[haradanhead]

Can anyone advise on how far repairs to various parts of a church can be classified as chancel repair? i.e. is it everything at 'that end' of the church, from floor to roof and what if there's a repair that needs doing in 'the other area' of the church, e.g. church tower? I ask as the policy I'm considering limits cover to repairs directly connected to the chancel which seems a bit vague to me - if the church roof needed replacing would only the part that covers the chancel area be applicable to those who have a liability in which case the policy would be fine but if the whole roof comes under the liability then the ins policy wouldn't cover it ( well might cover a part of it)

Thanks

[pommymike]

The question of the extent of the repairing liability was considered by Mr Justice Lewison in PCC of Aston Cantlow v Wallbank, and he decided it was more than to keep the chancel wind- and water-tight, but it is only the fabric of the building that the lay rector is responsible for, not any furnishings or ornamentation. Of course if you are liable, only because of some tithe rentcharges having once been paid to a former owner of your property, the courts should interpret the Chancel Repairs Act 1932 in a way which takes into account the historical development of the law. This would mean that a lay rector whose predecessors were entitled to receive only a small proportion of the tithes of the parish, would only be liable for a similarly small proportion of the liability in respect of the parish church. I have tried to expound this argument in a paper which I submitted to the Law Commission and Ministry of Justice: http://tinyurl.com/6yug986, and discuss on my blog http://michaeljameshall.wordpress.com. The Justice Minister responsible Jonathan Djanogly has not accepted the need for any legislation. The liability does not relate to the tower or the nave of the church, only the chancel. The parochial church council is responsible for the rest of the church.

[GeorgeL]

We are moving to a bigger house in part as a safer place to hold our savings than a bank. Having been through all the hassle of finding a house, having an offer accepted etc. I now find there is a potential (probably small) for that house being a liability rather than an investment because of Chancel Repair. Does anyone know what would happen if a house became unsaleable because it was registered for CRL at some point in the future? Presumably we could claim from from an insurance for diminuition in value, and for chancel repairs up to the indemnity limit, but the insurance money would eventually be spent; whilst the insurance is limited the liability is unlimited. To make matters worse, there is no way of getting rid of the liability which would be inherited forever as far as I can see.

 

I know it's probably unlikely, but isn't that how they get us to buy insurance - peace of mind just in case the worst happens? If the worst isn't covered what is the point?

Thanks,

George.

Edited August 29, 2012 by GeorgeL
Clarification

[pommymike]

George

Normally a chancel repair liability insurance policy does not cover diminution in value, only any actual payments which are required to be made to repair the chancel. You might receive a notice from the PCC under the Chancel Repairs Act 1932 http://www.legislation.gov.uk/ukpga/Geo5/22-23/20/section/2

You would then have the option (if your solicitor so advised) of refusing to pay and waiting for a county court claim form to be served on you by the PCC, and fighting the case in the county court. Such a notice can only be served if the chancel is in disrepair. If the liability is based on a tithe rentcharge merged in the land, you are only liable for a proportion of the cost of repair relative to the proportion of tithes of the parish which was payable out of the tithe field of which your property is part. See http://www.legislation.gov.uk/ukpga/Geo5and1Edw8/26/43/schedule/SEVENTH (the Seventh Schedule of the Tithe Act 1936).

There has been no such case in the county court under the Tithe Act 1936 ever. The only two cases since 1936 have been in respect of liability said to arise from enclosure awards (land allotted to a lay rector in lieu of tithe).

In neither case was any attempt made to argue that there was no longer the custom for a lay rector to be required to repair the chancel. If you have chancel repair liability insurance it will be for your insurers to decide whether to contest the case or pay up (unless you are prepared to accept that the insurers avoid liability) so you may not have the pleasure of fighting the case. If you receive a notice from the Land Registry to say that the PCC has applied to register a notice of chancel repair liability against your title, you can object and if your objection is not deemed to be groundless the matter will be referred to the Adjudicator to HM Land Registry.

Though at the moment (until 13 October 2013) it is not necessary for CRL to be registered at Land Registry in order to be enforceable. If you buy after that date and it is not registered when you buy, your interest will have priority (it will not override your interest). That would be interesting as no such case has yet been referred. I have argued in my blog mentioned in the previous post that the statutory order allowing registration is invalid as it was beyond the powers of the Lord Chancellor to create interests in land and that CRL is not an interest in land. The relevant Land Registry practice guide http://www.landregistry.gov.uk/professional/guides/practice-guide-66 recognises that doubts have arisen whether CRL is an interest in land. Only interests in land can properly be registered at the Land Registry.

If I were you I would scrutinise your solicitors' advice and the search results to find out whether CRL actually applies, check what type it is and whether there is any record in the parish of a lay rector actually having been charged (this is very rare) not worry too much if the results of your enquiries are satisfactory, and not let this put you off buying the house you want. As happened in Broadway it is possible that the PCC will back off as the Charity Commission may accept that it is reasonable for the PCC not to register or enforce CRL. There is also the possibility of legislation to reform or abolish CRL if enough people write to their MPs about it.

[GeorgeL]

Pommymike,

Thanks very much for the information. Much appreciated.

[Bikemedic]

Dear All,

My partner and I have today received a letter from a firm of Solicitors in the nearest larger town notifying us of the Chancel repair liability requirements. To say that we were surprised is an understatement as when our property was purchased some 14 years ago, no mention was made of this possible problem. The letter is quite strongly worded referring to the Walbank case and quoting £95,000 for repairs and some £230,000 for legal costs. They also enclosed a photocopy of the "Daily Telegraph" editorial from 31/07/2012. They go on offering Chancel Check fee of £18 and suggest an insurance policy which "can be as little as £14.95" "dependent on the value of your home" and further warning that insurance premiums "will no doubt increase as we get closer to 2013". There is much bold printing and underlining and were I older I would have been really worried; as it is I am just angry as it seems like a blatant scheme to worry people into purchasing these checks and insurance policies for a situation which the majority of responders to this forum appear to be saying is unlikely to be enacted upon them. We have several elderly neighbours in our road and I am hoping that they have not received these worrying letters.