Legal disclaimer gubbins: this article contains the ramblings of a house buyer who has merely done a bit of research and presented it here as an introduction to the topic for your entertainment - as such, it may not be entirely accurate, and does not constitute legal advice. The same goes for the many, many comments at the bottom.
If you have bought a house in a church parish since 2003, you will probably have already heard about chancel repair liability. In fact, if you have bought a house in England at all in the past 8 years or so, there's a fair chance you'll have heard about this, as it affects about 40% of properties. For those of you who have no idea what I'm talking about, chancel repair liability basically means that when you buy your house, you could also be buying the responsibility for the upkeep of your local church, so you can buy insurance to protect yourself. But when I looked into it, the details amused me so much that I thought I'd pass on what I'd found out.
It's super-fun but takes some explaining, so bear with me.
The house we have bought is in a church parish. Because it's in a parish, there's a risk that it's on glebe land. Glebe land is land that was, back in the day (as in the Norman Conquest days), set aside by the church to provide income for the rector of the church. When the parish church needs repairing, the congregation are responsible for where they sit at the west end, and the rector is responsible for the chancel at the east end of the church - and he gets his money to do that from the glebe land tied to the parish.
All very well and good, back in the day, when you had to donate 9/10ths of your income to the church to avoid going to hell. However, nobody thought to do away with glebe land at any point since then, so all over England there are still parcels of land in parishes which are still classed as glebe land. And these are no longer owned by the church - when Henry VIII broke it up and sold off the land, he sold the liability with it, creating lay-rectors.
The best bit is that none of the maps marking out the glebe land were accurate, given they were mostly drawn from memory by monks in the 13th century, and the maps haven't been kept up-to-date because most people had forgotten about glebes until 2002, so these days figuring out what is glebe land is mostly guesswork, and involves trawling through ancient manuscripts in the national archives at Kew.
That's irrelevant though, because as it stands, the law says that there is a chance that if you buy a house anywhere in a parish, you're actually buying a house that's on glebe land. And if the east end of the parish church needs repairing, you are liable for the costs.
This came up in a case in 2003. The people who owned the land were asked to pay something like £10,000 for repairs to the church; they said they'd pay, as long as the church agreed to give up its rights to charge them again in the future, which seems like a extremely generous and fair approach in this day and age. However, the church said no, and it took them to court. During the course of the court case they found out the foundations of the church needed replacing etc, and the repair bill reached about £240,000. The owners lost the case, had to pay for repairs, plus the legal costs of around £200,000. And their liability remains, should the church need any further work - so nobody in their right mind would buy that house now. Not only have they lost almost half a million over the repairs, but their house is now unsaleable and therefore essentially worthless.
As a result of this, there is now a booming industry in chancel repair liability insurance. We'll come back to this in a moment.
When this court case reached the press, there was a bit of Daily Mail outrage and the government moved to appease the people by putting a stop to it. They did what Labour did best (apart from going to war), and passed another law saying that the church has to register interest in any property built on glebe land before the property is sold for the first time after October 13, 2013. At least there is an end in sight. However, that still leaves the next 3 years, plus however long it takes to sell your house after 2013.
So now when you're buying a house, your solicitor will usually carry out a chancel liability check, and this will tell you whether or not you are in a parish. At that point, you are able to take out an insurance policy to protect you should it turn out that your property is on glebe land and the church registers an interest in it.
Loving this yet? It gets better.
At this point, you may think that it would be a good idea to determine whether your property is on glebe land before you take out insurance. However, if you do that and find out your property is on glebe land, there is no longer a potential liability - it is now a definite liability, and you can no longer buy insurance. Remember, you can insure against the risk it is liable, not against the risk the church may claim.
Not only that, but by law you now have to inform the land registry, the church will find out, and you're now going to the top of their hit list when their roof leaks. And of course when you come to sell your property, the liability - the unlimited liability that remains for the rest of time - will have a significant negative effect on the value of your property. So now you're not only guarding against repair costs for the church, but you also have to protect the value of the property - when you come to sell it, you can then point at the insurance and say "Don't worry, this liability is neutralised".
Well then, let's buy a chancel repair liability insurance policy, you say to yourself. They come in many different flavours; 25 year purchaser, 25 year successor, 35 year purchaser, 35 year successor, in perpetuity purchaser, in perpetuity successor and so on. The first obvious problem with this is that if the church does register an interest in the property and I didn't buy a successor policy, although I wouldn't be at risk for repair costs, I would not be able to transfer the policy to the next owner. So what, you say, that's their problem isn't it?
Well, imagine you go look around two properties; they are both 3 bedrooms, both in good condition, and then in the small print you find out that one of them comes with a free gift of unlimited liability to the church, the purchaser policy can't be transferred, and you can't get insurance because the liability has already been declared. You'll be buying the other property; the house with liability is now worthless, so the purchaser policies are essentially worthless.
But if you buy the 25 year or 35 year successor policy and the church declares an interest, in 25 or 35 years the property will be liable, so the value will drop, so those are again essentially worthless. So as far as I can tell, 5 of 6 types of policy these people are selling aren't worth the paper they're written on.
If you're not getting screwed by the priests, it's the lawyers.
Now this is a slightly misleading explanation, because I've overlooked the fact that these policies include cover for diminution of the value of the property - if the property is unsaleable, you would just need to make sure the insurance covers the value of your property, and provided you don't plan on moving in the next 3 years the purchaser cover will be fine. Of course though, you'd presumably get the money but keep the land as nobody would want to take the liability off your hands; you'd have no choice but to burn the house down and try to donate the land back to the church. And pay for whatever claims they made in the meantime.
But we want to be covered, so let's forge ahead and go for the in-perpitutity successor insurance; now we have to decide how much coverage we want to go for. The natural choice would seem to be the cost to repair or replace what is presumably a historic building. But remember, this is for the rest of time, so there is no limit to the liability. The rector could cancel his insurance policy, burn down the church, bill me for the repairs, burn it down again, bill me for the repairs, over and over and over again. He could be the start of a great family with thousands of descendants, all who become arsonist rectors at my local church. True, that would probably be illegal, but only if they got caught with petrol and a lighter, and only if their shares in the local building company were discovered. But I digress. The point is, there is no limit to how much money the church can ask for.
The best bit is that we have no idea how many properties are built on glebe land, so we don't know what share of any cost we would have to pay. We could be the only property in the town, or the whole of the parish could be glebe land. There is no way of telling.
So, you now have to buy an insurance policy for a potential, unconfirmable liability, without having any idea what your share in it would be, and with it having no limit in terms of cost or time.
Which is why it is amazing they sell insurance at all. The more you look into this, the more it feels like a scam - it seems like the insurance companies are just using the law to print money. They point at the test case and say "Look, it cost them half a million", but that was extreme, as from what I understand it was a house next to a derelict church in the middle of nowhere. And it was called "Glebe Farm". Now, there are unconfirmed reports that the church has employed a fleet of solicitors to make sure that as many properties are registered as possible - but the reports are unconfirmed, and usually appear on the websites that are selling insurance.
Having said all that, the cover isn't very expensive - for the "expensive" in-perpituity successor cover up to £500,000 we were quoted a one-off cost of £170; cover up to £3,000,000 for £370. If you're buying a house in England these days it's usually going to be well in excess of £100,000; the solicitor does a chancel check, and surprise, you're in a parish; now, would you like to pay £50 for 25 years cover? In the context of a £100,000+ purchase, what's £50 to safeguard the value? You'd pay that, right? After all, who's going to pull out of a purchase over that little extra cost when every other house in the town has the same potential liability? So pretty much everyone buying a house in a parish between 2003 and 2013 will buy a policy, there are approximately 10 million homes in parishes, and houses are re-sold at an average of 7-8 years - that is a lot of money for the insurance companies.
But at such a low cost for such a high cover policy, the insurance companies can't be expecting to pay out on all that many of them - they'll make a loss even if 1 in 2850 people makes a claim, before you take into account their costs. And even at those odds you're at least 120 times more likely to die in a road accident. I'm not a gambling man, but those are pretty good odds.
So on balance, you could be forgiven for thinking that this is a bit of a scam. Now, bear in mind that I'm not a lawyer or a historian, so you would be insane to use my ramblings to influence your decision on whether or not to take out chancel repair liability, so don't - I can't be held responsible for you ending up owing millions to your local arsonist rector. Every property is different, so use your common sense - if you live somewhere called "Glebe Farm" and it's next to a derelict church, you will probably want to get the insurance. And of course, if your mortgage company is demanding that you take out insurance, you don't have much choice in the matter. However, I think my point has been made.
For the curious, we kept our £300 and spent it on a new fridge.
Bear in mind that the above article is my somewhat sensational take on the issue; I am not a lawyer, so I may even have got some details wrong, as unlikely as that sounds.
It looks like there are some great comments below, but as with everything I've said above, take them all with a pinch of salt. None of this is legal advice - people are reporting that they're having liabilities registered, so consult your own solicitor before making any decisions.
Comments
To be fair to the church, some parishes have apparently pledged not to do anything about their glebes, so I guess that's something.
One thing I didn't mention was that it did actually come up in the courts back in 1932, when someone was sent to jail for not paying for chancel repair. Instead of doing away with it, the government of the day actually brought in a law shifting responsibility from ecclesiastical courts to county courts, reinforcing the liability which had until then had apparently been assumed to be antiquated and unenforceable. Go figure.
Clearly in 1932 an astute politician saw a nice opportunity to reduce the Crown's own liabilities, by shifting them on a few unfortunate subjects.
(Which also explains the 10-year gap in the last law: Her Majesty's Government does have an interest in the Church enacting that law as much as possible.)
But it's a good point - as I understand it there is certainly government funding available for repairs to ageing churches through English Heritage - I have no idea what the situation would have been in 1932, but presumably funding would still have been available in some form.
I think the risk is when the land registry doesn't mention anything, but you find out through your own investigations (ie the national archives) - then you need to notify the land registry, and the church will find out.
As ever, check with your solicitor/conveyancer if you're concerned.
To be fair to the church, it probably made sense back in the day when you were paying your tithes, and these days it mostly seems to be English Heritage who are forcing the church to seek all alternative sources of income before they'll consider helping out.
Good luck with your house purchase!
Ps. im no lawyer so make your own call but like the writer... im going Fridge shopping... or failing that, matches and some lighter fluid.
Regards
Kerry
If your land carries repair liability you as the owner will have to pay if asked until you sell the land whether or not the church registers an interest before Oct 2013. The new regulation did not extinquish the liability for present owners.
If you sell the land the new owner will ony be liable if interest was registered before Oct 2013
The Church does not want to lose this funding so they encourage insurance which means they can get their money with little offence.
The governmaent encourages insurance because it does not want to contribute via English Heritage
The insurers .....
This has been brought about by a large test case followed by a cynical regulation 'to make matters clearer' but not for ten years during which time the threat of registration forces the fearful to insure.
Gordon Brown was chancellor in 2003.
Now as a Licensed Conveyancer who has been doing Residential Property Law for 25 years I have to defend the conveyancers. Since this issue arose after the original case everyone has jumped on the bandwaggon to make money out of this. The companies providing Continuing Professional Development Courses which are compulsory for all qualified lawyers have used the opportunity to terrify us sufficiently about the issue that we flock in droves to take their particular course to ensure we are not going to get caught out with insufficient knowledge; the insurance companies bombard us with horror stories of what happened to lawyers who failed to push their insurances. Conveyancers do not get commission for undertaking searches or using insurance. Bearing in mind that at the moment Lenders in particular are trying to blame every negative equity on the conveyancer and not on their own bad lending practices conveyancers are feeling very nervous about where the next Professional Negligence claim could come from and some make the decision "get everyone to insure as much as possible regardless of the cost to the client so they don't blame me when it all goes wrong". I personally believe in informing the client of the risk, assisting them to assess the risk and then supporting them in whatever decision they make. I think I have only ever once used a policy!
Ron 21st April 2011 at 17:41
I'm considering doing a search of the archives to definitively get proof. However, as already mentioned, doing so may then force the land registry to be informed if indeed the property is within the chancel boundary.
Now here's where it gets a bit tricky. I could potentially ruin the vendors ability to ever sell the house just because I performed a search on it. They'll lose the ability to get insurance and reduce their chances of finding a buyer in future.
Surely there's something wrong with that.
I think there has been one case in 50 years on this so i think its aninsyrance compnay scam
As the liability is classed as an "overriding interest" it did not have to be recorded on the Land Register. From October 2013, if it is not registered then after a subsequent change of ownership, the new owner is most probably no longer liable. (A minority view is that CRL only loses its pecking order with respect to other liabilities such as a mortgage). If there isn't a change of ownership then the existing owner remains liable after 2013. The PCC (parochial church council)can register after 2013 but it costs more.
PCC members are trustees so must look after the assets of their church, including the right to collect money to repair the chancel. The Legal Advisory Commission of the Church of England (LAC)has told them that if they do not seek out, register and impose CRL then the PCC members will suffer huge financial penalties themselves at the hands of the Charity Commissioners. The LAC has also said that they cannot refrain from doing so for reasons of a purely moral nature.
The central bodies of the Church has handed the problem down to each parish (5,200 have this CRL)without giving central advice or help to parishes. Some dioceses have help on their websites notably Rochester and Truro, both of which are excellent, however others such as Worcester give no help at all to their PCCs.
In addition to Enclosure Acts CRL can come through "rentcharges". Less easy to understand but explained on the above websites. CRL arising from enclosure is a joint and several liability this means that a PCC can pick any one landowner owning only a tiny part of the former common land that was exchanged and get the full payment for repair from him. He in turn has the right to recover from other similar landowners as best he can. (CRL arising through rentcharges is partly joint and several)
This joint and several aspect of CRL is most damaging when it comes to getting a new mortgage - how can a Building Society judge the value of a house that has an unknown size of CRL over it. Insurance is advised.
The Government cannot do away with CRL without paying compensation - Protocol 1 of the Human Rights Act. The Law Society in 2006 published their proposals for replacing CRL with a small addition to the Land Registry charge (which currently starts at £50)but the Church of Englnd has not taken this up yet. Perhaps some agitation is required.
The Chancel Check Search is not expensive at around £18, and is definitely worth having. As to mortgagees not requiring Chancel Liability Indemnity Insurance cover in place, more often than not they do require it. You'd frankly be lucky to get a mortgage from a Bank presently without it as a specific requirement in the Instructions to Solicitors/Conveyancers.
The somewhat infamous case that lead to the furore about the issue is Aston Cantlow -v- Wallbank and there are several good summaries available if you Google the case name. There is however much confusion about the issue, which is hardly surprising when you read the average Chancel Search result which contains the following:
"The above building is located within the historical boundary of a tithe district within a parish which continues to have a potential chancel repair liability based upon historical parish boundary data and the relevant Inland Revenue Indices held by the National Archive."
The Wallbank case was decided on very specific and somewhat unusual issues and the chances of individual liability in similar amounts applying in towns and cities must be remote. Having said that, it would probably be verging on if not actually professional negligence if a solicitor advised his client specifically not to consider insurance cover as completely unnecessary with such a search result as above, but there are two points on this:
1 Do your homework, and I suggest you do this yourself. If you want your solicitor to do it, fine, but don't expect him to do it for nothing. What do I mean ? Well, quite simply if you're buying, do some research into the existence of the local parish church. Does it still exist at all, has it been sold off and converted into a restaurant or similar, or has it perhaps even been torn down and completely rebuilt in recent years. I've seen examples of each in recent months, and all in cases where the above wording appeared on the Chancel Search report.
2 If insurance cover is to be taken up, make sure your solicitor, conveyancer or whoever is doing the conveyancing has shopped around for quotes. It is a one off payment, but the premiums available vary considerably. Whoever's acting for you should already know who is likely to be the cheapest. And do get cover to include mortgagees and successors in title, in perpetuity - you won't save much in going for the cheaper purchaser only policy but, as one correspondent pointed out, what does that do for the value of your house if liability is subsequently established ? And no, to answer another correspondent on the point, the solicitor makes nothing from the policy.
I'm scratching the surface a bit on this whole issue as there are many more interesting points, but I hope these help.
As a last thought, you may be lucky and get a clear search report. I have in front of me as I post this a Chancel Certificate stating as follows:
"We hereby certify that, based upon historical parish and tithe district boundaries, third party data, and the relevant documentation found at the National Archives, the property is within a tithe district or Parish that has no record of risk of chancel repair liability."
The client didn't want me to do the search, but the mortgage instructions were specific. £18 well spent I'd say, in that case at least.
Don't believe all the horror stories, speak to a competant solicitor, or phone up the diocesan registrar for your area (all registrars are long standing solicitors, whose are responsible for church matters in their area).
the following links are hugely informative, and can point you in the right direction (also, the book "Chancel Repair Liability: How to Research It" is very good, if a little dull).
http://www.peterboroughdiocesanregistry.co.uk/chancels.html
http://www.nationalarchives.gov.uk/records/research-guides/chancel-repairs.htm
http://www.stedmundsbury.anglican.org/assets/downloads/governance/DChancelRepairliability-V62.pdf
http://www.stedmundsbury.anglican.org/assets/downloads/yourchurch/DAC/chancel%20repair%20laibility.pdf
Read them all! They are very useful, and hopefully will show you that CRL is not the terrifying demon everyone makes out. With careful research, you will often find that, if any, any liability your property bears will often be neglibly small, if it is ever registered.
J.Brown: I feel your pain, but if you think it's bad now, just wait until you have the house! They're money sinks! But they're our money sinks, which is why we love them so. Good luck!
It is correct that every property in England is within a Church of England parish, but not all parishes will have a chancel repair liability.
Very broadly, this will only apply in parishes which existed before the Reformation, so any new parish created since then (and a lot were created in the 18th and 19th centuries) will not have any liability.
Various estimates exist, including the estimate that 5,200 parishes are affected, out of about 16,000. Even then not all the land in these parishes carries the liability, only certain land (as discussed in earlier comments).
Another estimate is that 3,780,500 acres carry a potential liability, which is roughly 10% of the area of England.
I hope that this might put the issue in context.
As I understand the 2003 Regulations, anyone now owning land subject to chancel repair liability will retain that liability for as long as they own the property, whether or not the liability is registered at the Land Registry.
But on the first sale after 2013, a purchaser will take free of any liability unless it has been registered.
So the need for insurance will vary immensely, but I think that there is a clear conflict of interest in companies who carry out searches also trying to sell the insurance policies.
Chancel repair liability can only be abolished by Civil law.
And the PCCs who ask for this money are not "self-serving supernaturalists", who are legally bound by charitable status to pursue the best financial interests of their charitable body.
I have checked out the company on companies house and that the underwritters are registered with the FSA and all seems OK.
I believe that the ancient law giving all citizens the right to trial by combat has not been repealed either. So if the vicar wants me to repair his walls and foundations then he had best sharpen his sword.
If we want to register it, in a new name, is it best to wait until after 2013 ?
D S Hellier: An interesting point about the Charity Commission, I hadn't considered that aspect. To clarify for other readers, my understanding is that each church is run by a PCC, each PCC is a charity in the eyes of the law, and as such the members of the PCC are personally liabile should they fail to act in the financial best interests of the charity - in this case, to chase chancel repair liability. This makes the position of a PCC who is registering liabilities a bit more understandable.
However, in 2007 the legal advisory commission of the Church of England did apparently advise PCCs that they could cite Harries v Church Commissioners as a way of avoiding the registration, because by doing so they would alienate the community and harm the charity more in the long-run. They also note that Lord Scott in Cantlow v Wallbank said, "Trustees are not always obliged to be Scrooge." That said, it feels like the church could have been more supportive of PCCs - perhaps seeking a special agreement with the Charity Commission concerning this unique issue, whereby it would indemnify any members of a PCC which waived its right to chase chancel repair liability.
In response to your second comment regarding the amount due to the church, I had actually forgotten all about compulsory tithes when I wrote that sentence! My point was more that the medieval church made a link between donations and the likelihood of going to hell - quite explicitly in some cases, such as paying for indulgences - and the population believed it because that was all they knew. In that context, chancel repair liability may have made a bit more sense. My comment was intended as hyperbole, to highlight the contrast with today where only 15% of the UK population regularly goes to church, 30% don't believe in the christian god at all, and I would imagine that the number of people who believe that you can literally buy your way into heaven could be counted on one hand.
Sad to report it was a complete waste of time effort and a stamp. They simply confirm all the negative comments as above. The get out is we all must insure ourselves against the ravages of a jelous god, wheather we believe or not.
The government and the Church have got us screwed.One way or another we are all going to pay for the disgusting habits of other people, so they can have a nice warm building to worship the invisible man up in the sky who watches our every move and will send people like me who think its all b*****s ,to imagenary place called hell where I will burn and suffer for my sins for all eternity.
Liked the artical though, it did raise a smile, a bit like the fella who claimed that if rape was inevitable, relax and enjoy it . Think I know what he was getting at!!!
dawesy
There are several points that need to be clarified here - please ad an addendum to the original article with some actual facts in it. Particularly about the numbers of potentially affected areas - there are a limited number of parishes that this can affect, the Pcc is made up of volunteers who cannot be expected to take on a personal liability for disobeying the law; but they can resign as a statement of moral outrage!
The Risk seems to be ignored by many people here commenting, the Wallanders took their case as far as the House of Lords and became bankrupt because of total costs, how many people can afford to risk everything financially? I certainly can't, my brother can't. Listen to the solicitors, do the research, learn all that you can - basic questions such as
1- was there a parish church here in the days of the reformation?
2- Is it still here? If it doesn't exist then you can't be liable for costs.
If it does exist then it will be worth paying for the insurance or buying somewhere else.
Has there really only been one case of the church making an outrageous claim under this liability? Has anyone ever made a claim on their chancel repair liability insurance?
Like I said in my original ramblings, not getting insurance is a gamble to some extent - so if you're worried enough to the point where you're thinking of pulling out over it, then that £120 would probably be money well spent on the insurance to buy peace of mind. And in the grand scheme of things when buying a house, it's pretty insignificant.
As ever though, if in doubt, chat it through with your solicitor - it's what he's there for, and unlike me not only will he actually know what he's talking about, but you can also hold him responsible if he gives bad advice ;)
(i) The Church of England is privileged to be the established church and in return owes a duty of care to the whole population regardless of sectarian interest.
(ii) A parish priest of the Church owes a similar duty of care to all his parishioners. It entails a duty of trust and confidence and an obligation to deal fairly with every parishioner.
(iii) The surreptitious imposition of an entirely unexpected charge in respect of a medieval tax which reduces the value of their homes and property is a gross dereliction of duty and a breach of that trust.
Alternatively, a Church of England vicar is a professional person and as such is expected to act professionally. A doctor has a duty of care to his patients, a lawyer to his clients and a vicar to his parishioners. Imposing the liability is hardly the action of a Good Shepherd.
Brilliant piece thanks it's the only analysis I could find on the net that makes sense of yet another insurance scam. I'm still being made to pay one third more in post 11/9 'terrorist' insurance because I live in a tall building in London... gravy train innit