CCS insurance have kindly written the following article for us to remind us about the history and case law relating to chancel liability.
What did the Tudors do for us?
Well, history tells us the Tudors were a Welsh-English family that ruled England and Wales from 1485 to 1603 – one of the most exciting periods of British history. During 118 years of Tudor rule, the country became wealthier, towns
grew; new religious ideas were encouraged; beautiful houses
, churches and buildings were built, many of which are appreciated today. One legacy which is not appreciated is the liability for thousands of property and land owners to pay for the repair of church buildings.
This liability, known as chancel repair, described by one barrister as “a blot on the legal landscape, hard to discover, its enforcement can be capricious, and the extent of the liability may exceed the value of the land burdened”.
The implications of this liability has been widely publicised in the case of PCC of Aston Cantlow v Wallbank. Andrew and Gail Wallbank as the owners of a farmhouse on ‘rectorial land’ (land that once belonged to a medieval church), were deemed ‘lay rectors’, which resulted in them being liable for the upkeep of the area of the church known as the chancel. They were held liable to pay £186,986, plus VAT, towards the upkeep of St John the Baptist Church in Aston Cantlow, near Stratford-upon-Avon. They also incurred legal costs estimated to be c. £220,000.
What is Chancel Repair Liability?
Historically rectors were responsible for the upkeep of churches and as the church land was sold off to private ownership, the responsibility to repair the chancel passed with the land.
Under the Chancel Repairs Act 1932, a parochial church council (PCC) may serve a demand for the cost of, or contribution towards the cost of repairing the church chancel.
Chancel repair liability enables PPCs of approximately 5,000 pre-Reformation Church of England and Church of Wales parishes to demand money from owners of former monastery land and properties erected thereon, to fund repairs to their church buildings. This liability affects c.500,000 individual property owners. These property owners are liable for keeping the chancel – the space around the altar at the liturgical east end of the building, wind-proofed and water-tight.
This has come about because the Church of England has financial responsibility for 45% of the nation’s Grade 1 listed buildings and many other architecturally important churches. 70% of repair bills are met by local fundraising, with only a minority coming from English Heritage, lottery funds and other non-church sources. This places a considerable financial burden on PCCs, which largely rely on voluntary giving to support their work. It is the Church’s view that against this background, the Church cannot be expected to forego sources of funding to which it is entitled unless it receives adequate compensation. Additionally, the PCCs have a fiduciary duty to collect all they can from whatever source for the upkeep of the church.
This is further compounded by grant making bodies such as the English Heritage, who will not provide grant aid to a PCC in respect of repairs to the chancel of a church where there is a lay rector, i.e., those owners whose property is burdened with chancel repair liability, and responsible for its repair.
The good news for purchasers is that there is a deadline for PPCs to register all chancel repair obligations with the Land Registry by 13 October, 2013.
Purchasers will then be able to discover definitively whether the property they are considering buying is affected by chancel repair liability. If PPCs have not done so by this time, their right is unenforceable. However, there is one critical exception to this; PPCs are still able to register their interest after 13 October, 2013 whilst property owners before this date are still the proprietor.
What Does This Mean To You?
3.5 million acres of land in England and Wales, and the homes, schools, hospitals and factories built on it, are now thought to be potentially at risk. The property does not have to be near a church, or in the countryside (many urban parishes, such as Fulham in London are at risk), it just needs to be burdened with the liability to pay for the upkeep of the chancel of the parish church.
This is a serious matter and forms part of a solicitor’s duty of care to ensure that this potential liability is not overlooked, leaving clients subject to chancel repair liability claims of which they had no previous knowledge.
What Options Are Open To You?
There are three options open to you:
Basic chancel screening search, full chancel repair search (record of ascertainment) to establish the potential or actual risk and insurance to provide cover against the risk.
For those who conduct a basic screening search, this will only indicate the potential risk, and not conclusively establish whether a property is subject to chancel liability. A full chancel repair search will establish the potential risk. In turn, once this risk is identified, solicitors have a duty to inform the Land Registry and this will be registered on the client(s) title deeds.
The third and most sensible option is go direct and purchase chancel indemnity insurance to cover the indemnity against the cost of any future claim. There are a number of insurance companies who offer this facility including CCS insurance, a market leader, specializing in chancel liability, with a large client base and whose premiums are established as being the most cost effective (www.ccs-insurance.co.uk).
This view is reinforced by Paul Stevens, Partner at Harris Waters & Co “my preferred approach is to purchase insurance cover from CCS insurance rather than purchase a screening search, which is not property specific and inconclusive as it only establishes ‘potential risk’ relating to the parish in which the property is, or may be located. This means that we would need to incur further costs on our clients’ behalf to purchase insurance to mitigate against this potential risk.
This decision was taken in support of our commitment to our clients’ in fulfilling our duty of care obligations, and in line with guidance provided by the Law Society who advises “insurance may be considered as an option following the results of a search, or as an alternative to searching”.
CCS Insurance offers a wide range of legal indemnity insurance and is a leading supplier of chancel repair liability insurance, both standard and bespoke including those properties where a risk has been identified.
For more information, please contact CCS Insurance
Telephone: 020 7256 3836 begin_of_the_skype_highlighting 020 7256 3836 end_of_the_skype_highlighting www.ccs-insurance.co.uk