|
The property owners in Aston Cantlow [2003] faced a repairs claim of
£95,000 when the HL delivered judgment against them in 2003.
However, they have now been told that they have to put the chancel into
‘substantial repair without ornament’, rather than simply make it wind
and watertight. Accordingly, in February this year they learned that the
claim will be more than £200,000, plus costs in excess of £100,000.
This liability arose, of course, because they are ‘lay rectors’.
Ever since Aston Cantlow, the potential of a chancel repair liability has
been a recurring nightmare for conveyancers. We all know that it is
theoretically possible to carry out a search for liability at the Public
Record Office, but such searches are time consuming, expensive and
not usually conclusive (because many records are incomplete, and those
that do exist are often difficult to interpret). In any event, there can be
strong arguments against getting a full search because it will probably
have an effect on the market value of the property; in addition, a seller
will then be under an obligation to disclose the chancel repair liability as
an overriding interest when applying to register the transfer at the LR.
We have previously mentioned ChancelCheck, who offer a low-cost
screening report. This is not a property-specific search but uses a
mapping system to locate the property within historic parish boundaries
to see whether or not it is within an area where liability may still exist.
The report then says whether or not there is potential liability within the
tithe district in the relevant parish, or whether there is no risk. Such a
report can be a cost-effective way of managing risks presented by
chancel repair liability, but there are various issues to consider.
Whatever the search result, it is important to consider the terms and
conditions carefully and in particular whether the level of indemnity per
claim (and the search company’s level of PI cover) are adequate in
relation to the particular client and transaction.
What happens if a ChancelCheck report indicates that there is a
potential liability? Much will depend on the nature and value of the
transaction and the client’s attitude to risk. In practice, the choice is (i)
withdraw; (ii) negotiate a price reduction; (iii) try to arrange insurance; (iv)
do a full search; or (v) buy out the chancel repair liability under the
Ecclesiastical Dilapidations Measure 1923 (although that is usually a
theoretical, rather than real, remedy).
Not surprisingly, pressure for the abolition of chancel repair liability is
mounting. That really does seem to be the only solution. For further
discussion see article in [2007] 185 Property Law Journal 19.
|
