Blog - 30/11/2018
Considerations when buying a property near a church
On 13 October 2013 the law relating to chancel repair liability changed whereby chancel repair liability stopped being an overriding interest. However many conveyancers seem unaware of the significance of this and are still demanding sellers pay for chancel repair indemnity insurance policies in instances where chancel repair liability can no longer apply.
The chancel is the part of the church containing the altar, sanctuary and choir which is usually separated from the nave transepts of the church by a screen. The liability only attaches to churches in parishes created before the Reformation as the ecclesiastical reasons behind chancel repair liability ceased to be of relevance following the Reformation.
Chancel repair liability became headline news in 2003 due to the case of Aston Cantlow v Wallbank. In this case the Parochial Church Council of the historic Parish of Aston Cantlow pursued local property owners, Mr and Mrs Wallbank, for a sizeable sum towards the maintenance of the chancel of the 13th century Church of St John the Baptist. This claim was upheld by the House of Lords.
The fear that properties could be affected by such liability gave rise to a rapid increase in Chancel Repair searches to discover whether a property might be affected. Given the lack of historic information for some areas it was impossible to establish with any degree of certainty whether a particular property was affected.
The search result stated whether a property was located within a tithe district of a historic parish church with a continuing chancel repair liability. This result was based on a search of various databases including the Public Records Office at Kew to establish which historic parishes contained tithe districts that still had an ongoing chancel repair liability. It did not matter if a property was also located within the boundaries of a parish that was created post-Reformation so long as the property was located within the boundaries of a tithe district within a historic parish. The search result did not confirm whether an individual property was actually affected.
This led to buyers insisting on sellers providing indemnity insurance policies to protect against the risk of chancel repair liability.
Before 2013 there was no need for churches to protect their right to claim for a contribution towards chancel repair. The very existence of the right was sufficient to enable them to make a claim against the local land owner. Liability was usually personal and several. Therefore although one property could be one of a number of properties subject to the liability, the entirety of the repair bill could be enforced against the owners of that one property. It was then up to them to claim a contribution from other affected land owners.
All this changed on 13 October 2013 when chancel repair liability stopped being an overriding interest. This means that anyone purchasing a property after that date for valuable consideration took free from any liability. This does not include gifts or transactions at an undervalue.
Churches wishing to protect their right to claim for chancel repairs had to register a Notice of this right onto the registered title of affected properties. Such Notices protected the church’s right to make a claim for chancel repair liability against those properties at a future date. A Notice could only be removed if it could be proved that the church was not entitled to register such a right.
Churches are still able to register a Notice in respect of chancel repair liability post-13 October 2013 in the following circumstances:
- The freehold of the property is still owned by whoever owned it prior to 13 October 2013; and
- The freehold of the property was transferred to a new owner on or following 13 October 2013 but the new owner did not give valuable consideration for it i.e. the purchaser was not a bona fide purchaser for value without notice.
This means that if a property was sold on or after 13 October 2013 for valuable consideration and there was no notice of chancel repair liability on the title of the property there can be no continuing chancel repair liability.
Therefore irrespective of whether a chancel repair search result confirms that a property maybe affected there can be no on-going liability if the seller purchased the property post-13 October 2013. Therefore a request for chancel repair indemnity insurance by buyers in such cases should automatically be refused on the basis that they are simply unnecessary. As more time passes since October 2013 the chancel repair indemnity insurance market will increasingly dwindle.
However chancel repair searches are still advisable for a purchase from a seller who owned the property prior to 13 October 2013 or where a seller acquired a property but not for valuable consideration after 13 October 2013.
Even if there is no notice of chancel repair liability on the title it will still be possible for a church to register one up to the day of completion. Therefore it is advisable to check the title immediately before exchange and then run a priority search from that date in order to ensure that any application to register a notice of chancel repair will not take priority over the registration of a transfer of the property within the priority period.
It is sensible to take out chancel repair insurance where there is a genuinely high risk of chancel repair liability attaching to a property. Properties located close to medieval churches where it has been confirmed that there is ongoing chancel repair liability would be well advised to take out insurance against the risk of any liability being enforced.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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