Churches may have been given a ten year ‘heads up’ but at midnight on 13 October this year, Chancel Repair Liability (CRL) (as well as various other customary rights) will cease to have overriding status in most property transactions.
The history behind Chancel Repair Liability
Pre 1500AD most churches had a Parish Rector, who lived in the Parish Rectory. The title of ‘Rector’ carried with it an obligation to maintain part of the Parish Church, called the Chancel. In order to carry out such maintenance, the Rector received an income or ‘tithe’.
Post 1500AD and the reformation, the Crown seized these rectories and sold them off, together with all related easements and covenants. However, the right to receive income to maintain Parish Churches was abolished by Parliament, yet covenants on rectories and neighbouring properties to repair churches have remained. Approximately 5000 churches in England and Wales benefit from this continued liability.
Chancel Repair shall override no longer
When s.117 of the Land Registration Act 2002 (LRA) comes into full force, CRL will no longer have overriding status on the first registration of a property or on the conveyance of a registered property on or after 13 October 2013. Churches that benefit from rights of CRL from their neighbours will have to protect those rights by entry of a notice in the charges register of a registered property or by a caution against first registration if a property is unregistered. In the case of an attempt by a church to enter a notice, the Land Registry will first serve notice on the proprietor of the subject property.
Although these rights shall no longer override transactions, they will not just become void overnight. The desired effect will be that the land will remain subject to CRL but without a notice protecting the right, a person who acquires the registered estate of a property for valuable consideration will take the property free from CRL. The church has until the registration of the change of ownership to apply to protect its interest. Those who apply to register a notice before 13 October will not be charged a fee by The Land Registry.
A word of warning for future inheritors is that s.117 LRA 2002 does not apply where property changes hands without the exchange of valuable consideration (for example, the assent of a property under the terms of a will). In these circumstances and where a sale takes place for a nominal sum, CRL can still be protected by the entry of a notice against the new owner.
Furthermore, there is considerable academic debate surrounding the true effects of the end of CRL’s overriding status, suggesting that CRL claims will remain enforceable, regardless. This is because failure to register a notice will only cause CRL to ‘lose priority’ over a property transaction. The meaning of ‘priority’ is crucial yet quite unclear and so it remains to be seen whether CRL will still be enforceable by its beneficiaries
For assistance with the sale or purchase of your property or for information about chancel repair indemnity policies please contact a member of the Commercial Property team at Blacks.
Commercial Property Department