Chancel repair liability refers to the possibility that homeowners within certain parishes may be required to contribute towards the cost of repairing the chancel on a medieval church.
Changes to the status of chancel repair liability.
From 13th October 2013, chancel repair liability is no longer an overriding interest which means that further protection is required in order for the liability to bind purchasers of land after this date.
The position is now that a purchaser of land for valuable consideration, who purchases after 13th October 2013 will not be bound by any chancel repair liability, unless a notice of this liability has been entered on the charges register of the property. The owners of land purchased before 13th October 2013 will continue to be bound, regardless of whether a notice has been registered, until the land is sold to a third party.
Therefore, an application for an official search should be made in order to ensure that no notices have been registered.
For property transferred for no consideration, e.g. by way of a gift, inheritance or following insolvency, the transferee will still be bound by chancel repair liability.
Additionally, it is possible that a notice could be entered on the registered title even after the property has been transferred to a purchaser for value. This is because the Land Registry does not check whether the property has been subject to a transfer for value after 13th October 2013 (in which case registration of a notice is not permitted) and therefore it may be worth obtaining insurance against this liability, even if you are purchasing after 13th October 2013.
In the case of unregistered land, chancel repair liability can be protected by lodging a caution against first registration. The liability will continue to bind the owner of unregistered land after 13th October 2013 until it is conveyed to a 3rd party (triggering compulsory first registration) or until it is voluntarily registered. If a caution has been lodged, the cautioner can object to the application for registration and can protect its interest by entering a notice in the register. If such a notice isn’t entered at the time of first registration, the transferee takes free of the liability.
However, there is an exception where the failure to enter any notice on first registration is due to a mistake. In these circumstances, the Registrar may enter a notice to correct the mistake but if such an amendment would prejudicially affect the registered proprietor’s title, the proprietor’s consent is required. Nevertheless, the proprietor’s consent is not required where:
• The registered proprietor caused or substantially contributed to the mistake, through fraud or lack or care or
• It would be unjust for any other reason not to make the alteration.
Although it appears that a tenant is not directly liable for chancel repair liability a landlord may transfer the burden of this liability under the terms of the lease.
Therefore, the issue of chancel repair liability cannot be neglected when purchasing a lease.
If the chancel repair liability was not protected at the time of registration of the charge and the lender then exercises its powers of sale, the buyer will take free of this liability.
Chancel repair liability is an important consideration for purchasers of land, since the extent of such liability can be considerable. If a search reveals the property is situated in a location which may be subject to chancel repair liability, it may be worth obtaining insurance against such liability, even if no notices have been registered to protect this liability.