Last Thursday, the House of Lords held a short debate in Grand Committee on chancel repair liability, initiated by Lord Avebury’s question: To ask Her Majesty’s Government what steps they are taking to abolish the liability of private householders and others for chancel repairs.
Lord Avebury (LD) said that there was a consensus that reform of the law on chancel repairs was long overdue. He cited discussions with the Church, the Law Commission, the Law Society, the Country Landowners’ Association and the National Secular Society and gave a brief but helpful history of CRL. The Law Commission had recommended the abolition of CRL by statute after a 10-year notice period; but that recommendation was not implemented. Given that parochial church councils had refrained from enforcing their legal rights since 2003 and Wallbank, were they worth anything? He noted that the state already contributed hugely to the upkeep of churches through such measures as Gift Aid, the Listed Places of Worship Grant Scheme and the National Heritage Memorial Fund.
He was critical of the process of registration of CRL at the Land Registry:
“PCCs were ill equipped for the laborious and exacting work of registration, often involving missing, archaic or inaccurate documents. Unsurprisingly, thousands of registrations have been made in error, compounding the distress caused to householders. This happened, for example, in Gorleston in Norfolk, where all of the nearly 1,000 registrations had to be withdrawn.”
Registration was literally a medieval anomaly that undermined the value and saleability of land: it aimed at taxing citizens who might not even be Christian or belong to any religion, for the purposes of one faith out of dozens in our multicultural society. Liability for CRL significantly reduced the sale price and even made the property unsaleable, particularly to buyers requiring mortgages. Since the judgment in Wallbank & Anor v PCC of Aston Cantlow & Wilmcote With Billesley, Warwickshire  UKHL 37, purchasers of land had routinely taken out insurance against having to pay CRL; “but for property blighted by registration, premiums are astronomical or insurance is totally unavailable”.
Lord Avebury contended that the only fair solution was abolition, modelled on the Law Commission’s recommendation; but until that could be effected, there was a need for much greater availability of compounding—buying out the liability to CRL “at low cost and minimal professional fees” and he would like to see a uniform countrywide scheme, possibly by way of amendments to the Ecclesiastical Dilapidations Measure 1923. He suggested that the initiatives of the Revd Greg Yerbury, team rector of Penkridge [and a regular commentator on CRL on this blog] might provide a useful model.
Baroness Wilcox (Con) is chairman of the London Diocesan Advisory Committee and an active member of her parish church in Cornwall. She said that it had long been understood that something had to be done to remove the element of surprise from the situation – and those within the Church thought it had been done in 2002, when the Land Registration Act gave churches 10 years to register legitimate chancel repair liability, after which the door would shut in October 2013.
Many registered chancel repair liabilities were against wealthy institutions, the church authorities themselves or others who are well able to pay; and “those landowners would no doubt be pleased to see the value of their asset rise as a result of the abolition of chancel repair liabilities”. However, the worst-case scenario was more often quoted. The Government had sought to tackle the element of surprise in the Land Registration Act 2002; however:
“I think that it is fair to say that in practice the law is not what we all hoped for, a view supported by the Law Society in its parliamentary briefing. Its principal limitation is that it applies only to properties sold since October 2013. All property which has not been sold since October 2013 continues to dwell under a cloud of uncertainty. Even worse, the point of sale being the completion of the sale means that, at least in theory, it is possible to discover and register a new chancel repair liability between exchange of contracts and completion. That means that even when a property search has been returned blank, there remains a risk.”
She concluded that, in practice, the 2002 Act had not met the needs of churches, landowners or potential purchasers and the solution was to amend the law to remove uncertainty and any further possibility of nasty surprises. However, she opposed abolition without compensation to the churches concerned.
Several peers spoke broadly in support of Lord Avebury, including Lord Cashman (Lab) and Lord Rooker (Lab).
However, the Bishop of Derby explained that, though the Church of England was on record as supporting abolition in principle, how and on what terms that could be achieved raised some difficult issues.
Property – not only properties under CRL – was often subject to rights and restrictions: it was neither new nor unusual. In the most recent judgment from the House of Lords, Wallbank, Lord Rodger of Earlsferry had stated that in principle he did not find it possible to distinguish CRL “from the liability which would attach to the owner of land which is purchased subject to a mortgage, restrictive covenant or other incumbrance created by a predecessor in title”. In short, the House of Lords had found in Wallbank that it was not easy to distinguish CRL from other incumbrances. It was possible to distinguish the pastoral effects of the cases, “but in terms of good practice in the management of property and of rights it is a much more complicated issue”. He noted that it was interesting that the Tithe Act 1936 had not abolished CRL.
Parishes were often willing to come to a sensible arrangement, though sometimes by a very tortuous route:
“How can we proceed to get rid of the CRL and all the problems it causes? The advice we received is that—under the European Convention on Human Rights and the Human Rights Act, and taking into account the previous practice of the Government, the Tithe Act, and the previous practice of individuals … in all those cases such a right is commuted in return for some kind of compensation. That is the principle by which legislation would need to proceed. It is a well-known constitutional principle that Parliament does not deprive a subject of a right in the nature of property without providing compensation.”
Change had to be done on the basis of compensation: that would be fair to the current liabilities that property owners held, because they were legal liabilities. It would also be reasonable to give parishes notice and some kind of recompense for having to take on an even greater burden of the maintenance of buildings. That would in accordance with current legislation and good practice in the administration of property and of property law, as Lord Rodger had reaffirmed in 2003. The Church was fully behind this: the question was how it was to be done. There was a very strong case for some element of compensation in order to be fair to all concerned.
In reply on behalf of the Government, Lord Ashton of Hyde (Con) said that ministers had no plans to change the law at present but were keeping the situation under review. The Law Commission had considered the liability a number of times since the 1960s: the present legal position was that chancel repair liability was an ancient but valid right that enabled the owner, usually the PCC, to enforce the liability. That could play an important part in the finances of the 5,000 or so churches with the benefit of CRL.
In earlier times, the main problem was that CRL was sometimes difficult, if not impossible, for a prospective buyer to discover. Now, following the removal of its status as an overriding interest in October 2013, it was readily discoverable. On the other hand, the unpredictability of its incidence, its open-ended size and particularly its joint and several nature – mentioned by Lord Cashman and Lord Rooker – still attracted criticism. But it was unclear how far those potential problems were causing widespread, real difficulties in practice. The Ministry of Justice’s impression was that currently, and for some time past, enforcement against ordinary homeowners had become rare.
PCCs might be reluctant to enforce CRL on the grounds that to do so might compromise wider mission; but that was a decision for individual PCCs, who could get advice from the Church and the Charity Commission and from their own lawyers. Under s 110 of the Charities Act 2011, trustees could get reassurance from the Charity Commission that they were acting in accordance with their duties. It might also be that the level of concern about the liability had been temporarily increased by the registration.
The Land Registry had received about 9,000 applications for registration of notices and 160 applications for the registration of a caution against first registration. The Government appreciated that homeowners who were unaware that their home was subject to the liability might well have been worried by the notice; but the reality was that their legal position had not changed. The fears that were expressed leading up to the deadline of October 2013 that the registration of a notice could render a property unsaleable or unmortgageable did not seem to have materialised, nor did the market in CRL insurance seem to have disappeared. That was not to say that CRL might not cause major problems for some homeowners; but at present it was not clear that it was doing so in practice.
Reform might not be straightforward. Abolition would almost certainly require compensation because chancel repair liability was a property right protected by the Human Rights Act 1998, as confirmed by the House of Lords. The sums involved in aggregate might run to hundreds of millions of pounds. Schemes for release, redemption or compounding might be created or present ones, as outlined in the Ecclesiastical Dilapidations Measure 1923, improved; but their cost and attractiveness to prospective users would have to be considered carefully.