The risks and penalties of money laundering for charities and how to guard against it
On Sunday 13 October 2013, chancel repair liability ceased to automatically bind purchasers of affected land as an ‘overriding interest’ under the Land Registration Act 2002.
Chancel repair is a long-standing liability to contribute to the repair cost of the chancel (the space around the alter usually at the eastern end) of a parish church. It dates back to medieval times when the repair of a church was the responsibility of the parish whilst the rector was responsible for the repair of the chancel. After Henry VIII dissolved the monasteries and the land was sold, chancel repair liability passed with that land, however it was sold or divided. The church has the discretion to ask for contributions from all affected land owners or to just ask the wealthiest landowner to pay the whole amount.
Before 2003, chancel repair liability was all but forgotten. However, the full powers of chancel repair were highlighted by the House of Lords’ decision in Aston Cantlow PCC v Mr and Mrs Wallbank. In this case the church looked to the Wallbanks to pay £100,000 to the church to repair the chancel. The Wallbanks argued they shouldn’t have to pay but they lost and had to sell their home to pay the money due to the church and to pay their own and the Parochial Church Council's (PCC) legal fees of over £300,000.
Since then it has become standard practice when purchasing residential or commercial properties for solicitors to do a search with a commercial provider to check whether the property is potentially liable to chancel repair. If the property has a potential risk, it is cheap and simple to obtain insurance to protect against the risk.
Whilst there have been calls to abolish chancel repair altogether in this modern age, the Church of England’s argument is that they have financial responsibility for 45% of the nation’s Grade I listed buildings. This is a considerable financial burden on the church and they believe they cannot be expected to forego any source of funding including chancel repair.
The current changes mean that liability for chancel repairs will only bind future owners if the liability is registered against a property at the Land Registry. The onus has been placed on churches and their parish councils to establish a liability and to decide whether to register the liability. However, the church can register the liability of a property up to the date it is sold for valuable consideration after 12th October 2013. So a property that was purchased prior to the 12th October will potentially be at risk of having chancel repair liability registered against it until the next time it is sold, which may not be for years.
It is thought that up to 5200 properties may be subject to chancel repair. There does not appear to have been a rush of applications by the church to register their interests and in reality it may be hard for the church to prove it has an interest unless it has already been clearly established.
What happens if a chancel repair liability is actually recorded against your title? Firstly, if you do not know about the liability, you should get it checked properly by seeking legal advice and then you should object if appropriate. If the interest is valid and you do not already have insurance, there is some indication from insurers that they may still be willing to offer insurance against any potential liability but premiums are expected to be expensive.
Skip to content Home About Us Insights Services Contact Accessibility