when buying property within a church parish boundary in England
If you have bought a house in a church parish since 2003.. you will probably have already heard about chancel repair liability. In fact.. if you have bought a house in England at all in the past 8 years or so.. there's a fair chance you'll have heard about this.. as it affects about 40% of properties. For those of you who have no idea what I'm talking about.. chancel repair liability basically means that when you buy your house.. you could also be buying the responsibility for the upkeep of your local church.. so you can buy insurance to protect yourself. But when I looked into it.. the details amused me so much that I thought I'd pass on what I'd found out.
It's super-fun but takes some explaining.. so bear with me.
The house I have bought is in a church parish. Because it's in a parish.. there's a risk that it's on glebe land. Glebe land is land that was, back in the day (as in the Norman Conquest days).. set aside by the church to provide income for the rector of the church. When the parish church needs repairing.. the congregation are responsible for where they sit at the west end.. and the rector is responsible for the chancel at the east end of the church .. and he gets his money to do that from the glebe land tied to the parish.
All very well and good, back in the day.. when you had to donate 9/10ths of your income to the church to avoid going to hell. However.. nobody thought to do away with glebe land at any point since then.. so all over England there are still parcels of land in parishes which are still classed as glebe land. And these are no longer owned by the church .. when Henry VIII broke it up and sold off the land.. he sold the liability with it.. creating lay-rectors.
The best bit is that none of the maps marking out the glebe land were accurate.. given they were mostly drawn from memory by monks in the 13th century.. and the maps haven't been kept up-to-date because most people had forgotten about glebes until 2002.. so these days figuring out what is glebe land is mostly guesswork.. and involves trawling through ancient manuscripts in the national archives at Kew.
That's irrelevant though.. because as it stands.. the law says that there is a chance that if you buy a house anywhere in a parish.. you're actually buying a house that's on glebe land. And if the east end of the parish church needs repairing.. you are liable for the costs.
This came up in a case in 2003. The people who owned the land were asked to pay something like £10,000 for repairs to the church.. they said they'd pay, as long as the church agreed to give up its rights to charge them again in the future.. which seems like a extremely generous and fair approach in this day and age. However.. the church said no.. and it took them to court. During the course of the court case they found out the foundations of the church needed replacing etc.. and the repair bill reached about £240,000. The owners lost the case.. had to pay for repairs.. plus the legal costs of around £200,000. And their liability remains.. should the church need any further work .. so nobody in their right mind would buy that house now. Not only have they lost almost half a million over the repairs.. but their house is now unsaleable and therefore essentially worthless.
As a result of this.. there is now a booming industry in chancel repair liability insurance. We'll come back to this in a moment.
When this court case reached the press.. there was a bit of Daily Mail outrage and the government moved to appease the people by putting a stop to it. They did what Labour did best (apart from going to war).. and passed another law saying that the church has to register interest in any property built on glebe land by October 13, 2013. At least there is an end in sight. However... that still leaves the next 2+ years.
So now when you're buying a house.. your solicitor will usually carry out a chancel liability check.. and this will tell you whether or not you are in a parish. At that point.. you are able to take out an insurance policy to protect you should it turn out that your property is on glebe land and the church registers an interest in it.
Loving this yet? It gets better.
At this point.. you may think that it would be a good idea to determine whether your property is on glebe land before you take out insurance. However.. if you do that and find out your property is on glebe land, there is no longer a potential liability ... it is now a definite liability.. and you can no longer buy insurance. Remember.. you can insure against the risk it is liable.. not against the risk the church may claim.
Not only that.. but by law you now have to inform the land registry.. the church will find out.. and you're now going to the top of their hit list when their roof leaks. And of course when you come to sell your property.. the liability ..the unlimited liability that remains for the rest of time ... will have a significant negative effect on the value of your property. So now you're not only guarding against repair costs for the church.. but you also have to protect the value of the property ... when you come to sell it... you can then point at the insurance and say "Don't worry.. this liability is neutralised".
Well then.. let's buy a chancel repair liability insurance policy.. you say to yourself. They come in many different flavours.. 25 year purchaser.. 25 year successor..35 year purchaser.. 35 year successor.. in perpetuity purchaser.. in perpetuity successor and so on. The first obvious problem with this is that if the church does register an interest in the property and I didn't buy a successor policy.. although I wouldn't be at risk for repair costs.. I would not be able to transfer the policy to the next owner. So what.. you say.. that's their problem isn't it?
Well.. imagine you go look around two properties.. they are both 3 bedrooms.. both in good condition.. and then in the small print you find out that one of them comes with a free gift of unlimited liability to the church.. the purchaser policy can't be transferred.. and you can't get insurance because the liability has already been declared. You'll be buying the other property.. the house with liability is now worthless.. so the purchaser policies are essentially worthless.
But if you buy the 25 year or 35 year successor policy and the church declares an interest.. in 25 or 35 years the property will be liable.. so the value will drop.. so those are again essentially worthless. So as far as I can tell.. 5 of 6 types of policy these people are selling aren't worth the paper they're written on.
If you're not getting screwed by the priests.. it's the lawyers.
Now this is a slightly misleading explanation.. because I've overlooked the fact that these policies include cover for diminution of the value of the property .. if the property is unsaleable.. you would just need to make sure the insurance covers the value of your property.. and provided you don't plan on moving in the next 3 years the purchaser cover will be fine. Of course though.. you'd presumably get the money but keep the land as nobody would want to take the liability off your hands.. you'd have no choice but to burn the house down and try to donate the land back to the church. And pay for whatever claims they made in the meantime.
But I want to be covered.. so let's forge ahead and go for the in-perpitutity successor insurance.. now I have to decide how much coverage I want to go for. The natural choice would seem to be the cost to repair or replace what is presumably a historic building. But remember.. this is for the rest of time.. so there is no limit to the liability. The rector could cancel his insurance policy.. burn down the church.. bill me for the repairs, burn it down again, bill me for the repairs.. over and over and over again. He could be the start of a great family with thousands of descendants... all who become arsonist rectors at my local church. True.. that would probably be illegal.. but only if they got caught with petrol and a lighter.. and only if their shares in the local building company were discovered. But I digress. The point is.. there is no limit to how much money the church can ask for.
The best bit is that we have no idea how many properties are built on glebe land.. so we don't know what share of any cost we would have to pay. I could be the only property in the town.. or the whole of the parish could be glebe land. There is no way of telling.
So.. you now have to buy an insurance policy for a potential...unconfirmable liability.. without having any idea what your share in it would be.. and with it having no limit in terms of cost or time.
Which is why it is amazing they sell insurance at all. The more you look into this.. the more it feels like a scam .. it seems like the insurance companies are just using the law to print money. They point at the test case and say "Look.. it cost them half a million".. but that was extreme.. as from what I understand it was a house next to a derelict church in the middle of nowhere. And it was called "Glebe Farm". Now.. there are unconfirmed reports that the church has employed a fleet of solicitors to make sure that as many properties are registered as possible .. but the reports are unconfirmed.. and usually appear on the websites that are selling insurance.
Having said that.. the cover isn't very expensive ..for the "expensive" in-perpituity successor cover up to £500,000 I was quoted a one-off cost of £170.. cover up to £3,000,000 for £370. If you're buying a house in England these days it's usually going to be well in excess of £100,000.. the solicitor does a chancel check.. surprise.. you're in a parish.. now..would you like to pay £50 for 25 years cover? In the context of a £100,000+ purchase.. what's £50 to safeguard the value? You'd pay that.. right? After all.. who's going to pull out of a purchase over that little extra cost when every other house in the town has the same potential liability? So pretty much everyone buying a house in a parish between 2003 and 2013 will buy a policy.. there are approximately 10 million homes in parishes.. and houses are re-sold at an average of 7-8 years .. that is a lot of money for the insurance companies.
But at such a low cost for such a high cover policy.. the insurance companies can't be expecting to pay out on all that many of them .. they'll make a loss even if 1 in 2850 people makes a claim.. before you take into account their costs. And even at those odds you're at least 120 times more likely to die in a road accident. I'm not a gambling person.. but those are pretty good odds. And it's quite telling that mortgage companies don't rate it as enough of a risk to demand that insurance is taken out whenever a house is being bought in a parish in order to protect themselves from this liability.
So on balance.. you could be forgiven for thinking that this is a bit of a scam. Now.. bear in mind that I'm not a lawyer or a historian.. so you would be insane to use this to influence your decision on whether or not to take out chancel repair liability..so don't .. I can't be held responsible for you ending up owing millions to your local arsonist rector. However.. I think the point has been made.
For the curious.. I am going to keep my £300 and spend it on a new fridge!
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