Parish church: Legal uncertainties
The Law Commission is planning to take one burden off conveyancers’ shoulders by removing doubts about chancel repair liability (CRL) and the need to take out insurance.
It has recommended that CRL should only affect property buyers if it is registered against the title, saving a relatively small amount of money for each transaction that add millions of pounds to conveyancing transactions annually.
CRL is an obligation to repair the chancel of a parish church whenever it falls into disrepair. The chancel is the eastern end of the church, where the altar is found.
It dates back to medieval times and originally the responsibility of parish priests, but following the Reformation and dissolution of monasteries in the 16th century, the liability passed to lay landowners. It can affect all purchasers of land, including commercial and agricultural property.
In 2003, the pre-Supreme Court House of Lords held a couple liable for the repair of the chancel in their local church at a cost of nearly £189,000 – plus legal costs of £250,000.
They ended up selling their home and, to ensure the property was marketable and that subsequent owners would not be liable, they spent a further £37,000 to buy out the liability.
The Law Commission consultation published today said there remained uncertainties around CRL, including whether it does automatically bind anyone who acquires former rectorial land, and whether it is still an obligation on lay rectors or has become a direct burden on rectorial land.
For more than 100 years, CRL was treated as an overriding interest under land registration statutes but this was removed in October 2013 through amendment to the Land Registration Act 2002.
The Law Commission said it was thought this meant CRL would need to be protected by entry of a notice on the land register in order to be enforceable against a purchaser of registered land.
“However, the law governing CRL is obscure and uncertain. There may be doubts about whether the LRA 2002 applies to CRL in the way that was expected.
“Although CRL is no longer an overriding interest, purchasers of land still routinely obtain chancel repair searches or chancel repair insurance, even where no liability is registered against the title.”
“Many” conveyancers carry out a chancel repair search, at a typical cost of £30 to £40, and/or take out insurance. This can be as little as £15 “but the price will vary depending on the insurer’s risk assessment and whether a CRL search has been obtained”.
The five largest insurers who provide CRL insurance issue around 150,000 policies each year, according to data provided to the law reform body.
The commission said: “Whilst the costs of chancel repair searches and insurance for a single transaction may, in general, be seen as modest, they cumulatively add millions of pounds each year to the costs of property transactions across England and Wales.”
It has proposed that the change to the 2002 Act should be retrospective, ensuring that it applies to any transfers of registered estates or first registrations of unregistered estates that have occurred since 13 October 2013.
Sir Peter Fraser, chair of the Law Commission, said: “These proposals aim to deliver the certainty that was intended when the land registration rules changed in 2013. By clarifying the law, the aim is to reduce unnecessary costs for those who buy land such as homebuyers, while ensuring the rules work as Parliament expected.”
The Law Commission previously recommended abolishing CRL in 1985 but the government rejected the proposals in 1998.
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