Commercial Property e-Brief – Don’t chancel it!
Thursday 1st August 2013
The ability for churches to claim against property for the cost of repairing a local church is about to be restricted. However, this does not mean that the issue will go away completely.
What is chancel repair liability?
Chancel repair liability is a legal obligation for a property owner to pay towards the repair of certain Anglican parish churches. Only certain properties are affected. However, it is very difficult to categorically confirm whether a particular property has liability for chancel repair as it is not something that currently needs to be registered at the Land Registry.
Usually, a purchaser of property will carry out a specialist search which indicates whether a property lies in an area which could have chancel repair liability before they buy a property. If the search result is positive then indemnity insurance is often taken out to protect against the risk of a claim being made.
Changes to the law after 12 October 2013
After 12 October 2013, chancel repair liability will not bind a purchaser of property unless it is protected by a notice on the Land Registry title. For unregistered land, special rules will apply. A church which wants to make chancel repair claims will need to have made an application to register a notice against all affected property at the Land Registry.
Does this mean the risk will be removed?
No. There are two issues:
- the change in the rules may prompt churches to check their records to ascertain whether they do have any claims against properties. This could result in a rush of registrations as churches attempt to protect a potential chancel liability; and
- a property only takes free of the risk of chancel repair liability if no notice is registered on its title before it is first sold after 12 October 2013. Until this point, a church can apply to register a notice even after 12 October 2013.
What does this mean for landowners?
Property bought after 12 October 2013 will not be subject to chancel repair liability as long as the liability has not been noted on the Land Registry title to the property at the date of the sale.
Practical Tips
We recommend carrying out a chancel repair search to establish the position for your property. If the property lies within an area of potential liability, then you should consider putting insurance in place.
The risk of taking no action is that a notice could be registered against your title before you get indemnity insurance in place. If this happens, insurance may cease to be available at a reasonable cost and the value of your property will almost certainly be adversely affected.
Find out more
If you would like to find out more about the issue of chancel repair liability or how it may potentially affect you, please contact James Kimberley on 0113 227 0257.