Is the Church about to devalue your property?5th October 2012

Few have heard of Chancel Repair Liability – but many will over the next year, warns Robert Fairbairn of Goadsby Commercial in Southampton.

Henry VIII dissolved the monasteries and sold the land. However, many properties built on that land have inherited a liability for paying for the repair to the chancel of their local church. This does not just apply to historic houses, but any building put on the land up to the present day.

The church can demand a significant sum of money. ten years ago a couple living near Stratford on Avon were presented with a bill for £187,000. After challenging it through the Courts they were required to pay the bill and £220,000 in legal costs.

Parishes are now required to register Chancel Repair Liability against individual property titles – and most of these will be done by October 2013. The Charity Commission has warned Parochial Church Councils that if they do not register the liability the PCC members could be held personally liable. English Heritage have joined in, making it clear that they will not be providing grants for the repair of churches where the opportunity to register the liability has been missed.

Mortgage companies are unlikely to take on a property where there is a potential large and unknown liability to hand over money in the future. Although a property might be initially valued, once the prospective mortgagee is aware of the liability they will either decline the mortgage or ask for a revaluation to account for the liability. Robert says that many home owners could find that their home has fallen in value overnight and may even be unsalable.