Thursday, 27 March 2014

October 13th and Chancel Repair Liability

What is Chancel Repair Liability?

This is a very basic question but what is clear is who ever owns part of a Rectory is liable for the upkeep of a Chancel of a Church and this has been quite settled by common law development over the past eight hundred years. Yet the nature of the liability is uncertain and the land registry on it's website states

There have been arguments that chancel repair liability is not an interest in land that can be protected by notice. Land Registry currently operates on the basis that it does constitute such an interest. But we will serve notice on the proprietor before making an entry of an agreed notice. 

There are two possible views the liability is an interest in the land and the other that it is personal liability as a consequence of having a particular asset. The former means there is a deadline for registration to retain the liability beyond the sale of the land but the latter means there was not.


There is a Deadline


For the time being the land registry is assuming that the liability is registrable and this is certainly the main stream view. The basis of this is what is written in the law and that is based on the 1925 section 70

All registered land shall, unless under the provisions of this Act the contrary is expressed on the register, be deemed to be subject to such of the following overriding interests as may be for the time being subsisting in reference thereto, and such interests shall not be treated as incumbrances within the meaning of this Act, (that is to say): Liability to repair the chancel of any church.

This was picked up by the 2002 Land registry act and a deadline was given to register the overriding interests by October 2013 and the above interests that were protected without a notice would cease to be. On the surface it would seem that in effect the end of the conveyancing trap of people buying a priority without knowing of liability has now come to an end. This view is widely supported in legal circles and there are numerous websites who support this view here and here and on the Church of England Website.

Summary

The 2002 land registry Act provided a deadline for the registration of Chancel Repair Liability and now land can be safely bought knowing there is no hidden liabilities attached to the land.

There is no Deadline

The basis of the viewpoint is that there has never been a deadline is that there has never been a clear definition by statute of what is meant by Chancel Repair Liability. The common law development over many centuries of what chancel repair liability is, that it is not an interest in the land but a personal liability of someone who owns some of the rectory property.
To make this clear what I mean by this I need to visit several cases related to chancel repair liability and Acts of parliament.

1839 Tithe Act

During the tithe commutation many land owners were also the tithe owners and as the tithe owners they were responsible for the chancel. The 1839 Tithe Act allowed the transfer of liability that was linked to the tithes or now the Tithe Rent charge into the land Section 1 Reads

In every case where any tithes or rent-charge shall have been or shall hereafter be released, assigned, or otherwise conveyed or disposed of under the provisions of the said Acts, or any of them, or of this Act, for merging or extinguishing the same, the lands in which such merger or extinguishment shall take effect shall be subject to any charge, incumbrance, or liability which lawfully existed on such tithes or rent-charge, previous to such merger to, the extent of the value of such tithes or rent-charge; and any such charge, incumbrance, or liability shall have priority over any charge or incumbrance existing on such lands at the time of such merger taking effect; and such lands, and the owners thereof for the time being, shall be liable to the same remedies for the recovery of any payment and the performance of any duty in respect of such charge, incumbrance, or liability, or of any penalty or damages for nonpayment or non performance thereof respectively, as the said tithes or rent-charge, or the owner thereof for the time being, were or was liable to previous to such merger

This seems to say that the liability that was formerly linked to the tithes has been transferred to the land but in exactly as the same form as it was prior to the merger but the act itself hedges it and says land or person I suspect because it has always been certain what the liability is. I think it is reasonable to assume that all land based liability has the same form of liability as the tithes that it came from.


Court Cases

There are actually few court cases relating to chancel repair liability and not that many than can be found recorded on the internet. I have picked a few to show how case law has understood the nature of the liability to repair the chancel as a result of owning the rectory tithes or rectory land.

1793 Alwyn verses Awberry

In this case the court said 'that the Rector is repair the chancel out of the profits of the glebe' and so for this case the liability is tied to any money that comes from the glebe be it tithe or land.

1828 Ross verses Aglioney

Where a party is bound in respect of his property to repair a chancel

Wickhambrook PCC v Croxford

The judge quoting an earlier case of 1870 Smallbones v. Edney
a tithe owner is exempted from an ordinary church-rate for the repair of the body of a church because he is under a particular liability to repair the chancel. He is not less liable, but more liable, than the owners of other property in the parish to repair the Church, being under a personal liability to repair a particular part of it.

1955 Chivers verses Air ministry case

Judge Wyn Parry noted
'It is sufficient for me to say that, as that case shows, the liability, which, where there is more than one impropriator, is a several and not a joint liability, and is not a charge on the rectorial property, but a personal liability'

Summary

Case law and the various ancient ecclesiastical legal books printed before the 1925 Land Registration act came to pass, define the liability as being personal to the owner of the Rectory assets be it land or Tithe or possibly  tied to the profits of the Rectory but it is not described in any as being an interest or a charge or encumbrance on the tithe or land. 

The 1985 law Commission Report


This almost seminal report on Chancel repair liability is all but silent on this issue although it does carefully talk about ending the liability of Lay rector not about removing the liability from the land in their proposed act.

Another way of looking at it.

The vast majority of the liability started out as Tithe before being transferred to the land. A church can't have an interest in the actual Tithe or money it'self but only in the owner of the tithe or tithe rent charge and therefore the same should apply to the land. As argued in the Chivers case the liability is not a charge on the land because a PCC has go no rights to the land itself unlike Manorial and mineral rights where the liability is directed connected to access and rights over the land.

Deadline or no Deadline

There is without a doubt a court case pending on this whether chancel repair liability can be classed as an interest in the land or as a personal liability which cannot be registered on the land. If the later is correct the liability still can be enforced on certain owners of various pieces of land but there was never a need to register it.

The Conveyancing trap

If the chancel repair liability cannot be registered, but it is still a liability enforceable by the 1932 Act, then the conveyancing trap will continue to exist as the deadline given does not apply to this liability. Arguably it is now worse that it was before since no one actually can be certain whether the liability can be be acquired for the sale of the property or not. For a householder who knows they live on rectory land but a PCC has opted not to register the question they now have to wonder should they declare this possible liability to any future buyer or not?

Chancel Repair Liability Insurance

At the moment there is a practice that people are acquiring chancel repair liability insurance for current householders or for those who buying a property just in case that between agreeing to acquiring the property and actual buying a PCC puts a registration on the land. Arguably this is incorrect and that chancel repair liability insurance practice should have simply ignored the 13th October deadline and continued for all buyers of all property.

Conclusion

PCC's in my opinion should continue to consider the liability as a registrable liability whilst property buyers and conveyancing solicitors should treat the liability as a non-registrable liability that will continue from one owner to the next owner whilst we wait for a court case to finally decide the issue or a change in the law. The 1925 Act may have incorrectly classified Chancel repair liability as an interest in the land or arguably there could be land with that liability but that it is nothing to do with rectorial assets which is the principal origin of  the liability to repair a chancel.

Caveat

In some-ways the above argument is academic since ordinary people have only received a bill for the liability to repair a chancel twice in the last 80 years but the risk of being sent a bill, is a real risk, just a very small risk indeed.

This whole post maybe just a bit of March Madness.


Post Script

After a twitter debate I thought I should leave with a quote from the only case I haven't mentioned that of the Wallbank which really only debated Human rights law from here 
'The liability of a lay rector is a personal liability arising from his ownership of impropriated property'.
I agree that there is still some open uncertain issues with regards to Chancel repair liability but maybe that is for another blog post.