Most people who haven’t bought or sold a property in England and Wales in the last decade aren’t likely to be familiar with the now haunting phrase “chancel repair liability”, but those who are will no doubt have heard horror stories telling of landowners being bankrupted by their property’s local parochial church council (“PCC”), who have elected to enforce centuries-old rights to collect payments totalling hundreds of thousands of pounds to repair their church’s chancel.
Since the notorious Wallbank case, conveyancers have sought to protect their property-buying clients by either carrying out chancel liability searches or taking out chancel liability insurance prior to exchanging contracts with their property’s vendors, but now that 12th October 2013 has passed and The Land Registration Act 2002 has finally removed chancel repair liability’s status as an ‘overriding interest’, a general feeling of relief seems to have swept across conveyancing firms and property owners alike. It is a feeling, we are afraid, that is considerably premature.
From 13th October 2013, if the PCC fails to put a note on the deeds before a purchase is registered with the Land Registry, then it will be prevented from doing so by virtue of the changes that came into play at midnight on 12th October 2013. However, the liability only falls away at the point of a registration after 12th October 2013. Anyone who acquired property before that date could still find themselves at risk of chancel repair liability.
Note our careful choice of words here: ‘acquire’. As upon the exchange of contracts a buyer is committed to buy the property, but their conveyancer cannot register their title to the property with the Land Registry until after the purchase has been completed, then there is a window of potentially several weeks between exchanging contracts and registration of title during which a buyer is still open the risk of chancel repair liability. If the PCC were to put a note on the deeds or raise an intention to do so during this time, a buyer would still be contractually obliged to take ownership of the property together with any chancel repair liability that comes with it. In these circumstances, it would be expensive or perhaps even impossible to insure against what would have become an actual risk, and the buyer could be faced with a bill to contribute hundreds of thousands of pounds towards repairs of the property’s parish chancel.
And it is not only those who are buying a property who are at risk. Sellers of property, including many of those who purchased chancel repair insurance upon buying that property (which will, in most cases, protect them personally, but not anyone who owns the property after them), could find their property’s value reduced dramatically should the property’s parish’s PCC register a liability against the property before they have exchanged contracts with their buyers.
Mindful of this risk, we at QualitySolicitors Lockings have liaised with a reputable insurer to ensure that new policies are available from today for both our buying and selling clients. We have personally assisted in the drafting of these policies to ensure that they will provide adequate protection against the continuing risks posed by this medieval interest for not only our clients now, but anyone to whom their property may pass in the future. And so, whilst chancel repair liability is far from being dead, our clients’ worries over it most certainly are.
For further information about buying or selling property please call QualitySolicitors Lockings on 01482 300200, or visit www.qualitysolicitors.com/lockings