Chancel Repair Liability (“CRL”) is a legal obligation on some property owners in England and Wales to contribute towards repairs to the chancel of a medieval church. In essence, it is an obligation to help pay for church repairs. While it may seem like a relic from the past, it stems from the times when parishes were supported by tithes from local landowners. Today, this can translate into a liability for modern homeowners if their property stands on land that once belonged to a rectoral estate with such obligations.
The reason why Chancel Repair Liability still matters today is because it can result in significant financial implications for unsuspecting homeowners. In the most famous case involving CRL, Aston Cantlow Parochial Church Council v Wallbank in 2003, the homeowners faced a bill of over £100,000 for repairs to their local church. This case highlighted the potential for severe financial consequences and brought widespread attention to the issue.
Identifying the Risk
The risk of CRL is not uniform across the country and largely depends on the historical ecclesiastical parish boundaries rather than current ones. To determine if a property is at risk, a Chancel Repair Liability search is usually conducted during the conveyancing process. This search is crucial as it informs potential buyers if their property could be subjected to these ancient charges.
Mitigating the Risk
If a property is identified as at risk, homeowners have a few options:
- Indemnity Insurance: This is the most common approach. Indemnity insurance can be purchased relatively inexpensively before a liability is formally demanded. It covers potential future claims and legal costs associated with defending a claim.
- Checking the Title Deed: Some deeds will clearly state whether the liability applies to the property.
- Formal Apportionment or Redemption: This involves legally ending the liability and can be done through the Land Registry, though it can be costly and complicated.
In recent years, the conversation around CRL has shifted significantly due to important legislative changes. Notably, a pivotal legal adjustment made on October 13, 2013, significantly altered the handling of CRL. Before this date, CRL was considered an "overriding interest" and could affect any property without being specifically noted in the property's title deeds. This meant that new homeowners could be unsuspectingly liable for ancient church repair costs.
However, post-2013 legislation mandated that such liabilities must be registered with the Land Registry. If not registered, the liability would not automatically transfer to a new owner upon the sale of the property after this date, effectively "cancelling" the automatic imposition of this burden without explicit entry on the title. While this change has mitigated risks for many new buyers, vigilance remains crucial, as unregistered liabilities before the cut-off could still impact existing properties. Therefore, property owners and prospective buyers should remain informed and cautious regarding potential unregistered liabilities.
While Chancel Repair Liability may seem anachronistic, it remains a pertinent issue in parts of England and Wales. For those involved in property transactions in affected areas, understanding the potential liability and taking steps to mitigate it is crucial. At Eightfold Property, we advise clients to conduct thorough due diligence and consider protective measures such as indemnity insurance to safeguard against unexpected financial burdens.
For further detailed guidance and updates on CRL, keeping in touch with legal advisors or real estate professionals is advisable. Remember, being forewarned is being forearmed in the realm of property ownership.
Understanding the full scope and impact of Chancel Repair Liability helps in making informed decisions whether you're buying a new home or ensuring your current property is protected.