A blessing for vicars, a curse for residents: Church invokes archaic tax to fund repairs
• Homes near to churches could be liable for upkeep
• Parishes told to pursue law to help pay £1bn deficit
It is a hangover from the reign of Henry VIII, described by one barrister as a blot on the legal landscape. But at a time when the Church of England faces immense repair bills for its parish churches, it is regarded by some vicars as a godsend.
A quirk of the statute books has left a legal liability for thousands of homeowners who may be required to pay for the repair of church buildings. The liability, known as chancel repair, has required one couple to pay more than £200,000 towards the upkeep of their parish church.
The country's 16,000-plus Church of England churches have now been urged to investigate whether they could benefit from the law. At least a quarter of dioceses have been looking into the issue, according to an insurance industry source.
Chancel repair liability enables approximately 5,200 pre-Reformation Church of England and Church of Wales parishes to demand money from owners of particular properties on former monastery land, to fund repairs to their church buildings. These homeowners are called lay rectors, and they are liable for keeping the chancel - the space around the altar at the liturgical east end of the building - wind-proofed and water-tight.
Churches have begun pursuing claims since the House of Lords ruled that Andrew and Gail Wallbank had to pay £186,986, plus VAT, towards the upkeep of St John the Baptist church in Aston Cantlow, near Stratford-upon-Avon. They also had to stump up legal costs of around £220,000. They own a nearby farmhouse which brought with it the legal requirement.
Despite the ruling last year, the Wallbanks have yet to pay a penny to the parochial church council (PCC) because of more wrangling over the archaic liability.
Establishing is liable is difficult as there is no register. As one barrister told the Guardian: "Chancel repair liability is a blot on the legal landscape. It is hard to discover, its enforcement can be capricious, and the extent of the liability may exceed the value of the land burdened. It is wholly unsatisfactory that this form of liability should still exist in 2008."
The Law Commission in 1985 recommended the liability be abolished, but the government rejected the proposal.
It is clear why the church isn't keen for it to be annulled. According to a 2006 English Heritage report, the Church of England spends £120m a year on repairs, and the backlog of repair bills for all listed places of worship in England is an estimated £925m over five years, or £185m a year.
In the wake of the Wallbank case, the Legal Advisory Commission, which advises Church of England dioceses on matters of law, issued national guidance on chancel repair rights which suggested PCCs had an obligation to investigate whether parishioners could be billed for chancel repair works.
The document said: "A PCC is a charity so its members are subject to the usual duty of charity trustees to exercise their powers in its best interests. They cannot therefore simply choose not to enforce chancel repair liability."
But it also noted that in many cases the bad publicity from enforcing the law could be counter-productive. It said enforcing chancel repair liability could hamper the PCC's "ability to pursue its object of promoting in the parish the pastoral mission of the church, or by alienating potential financial support".
Establishing whether liability exists with an individual is painful enough, let alone billing them, according to Andrew Johnson, registrar of the diocese of Salisbury. "From a pastoral point of view it's an unpleasant task," he said.
There is, however, one apparent winner in this affair, and that is the insurance industry. Insurance offering protection against being landed with a bill to repair the local church chancel has existed for many years. But until the Wallbanks' case, hardly anyone took out such cover.
Some people question the worth of these policies. Tim Berry, registrar of the diocese of Bristol and Bath and Wells, said: "Insurance companies have jumped on the bandwagon. They flag it up and solicitors have to warn mortgagees, and they panic and want cover. If you search small cities, a vast number will probably be burdened with potential, but tiny, liability."
Happily, the situation is likely to become clearer. From October 2013, chancel repair liability will only bind buyers of registered land if it is referred to in the land register.
Andrew and Gail Wallbank have Henry VIII to blame for their troubles. Chancel repair liability dates back to the monarch's decision to dissolve the monasteries when he made himself the supreme head of the Church of England in 1534. Before then, many monasteries employed a rector who was responsible for repairing the eastern end of the church, which holds the altar. The Wallbanks say they cannot pay the £186,986 repair bill for St John the Baptist church - in which they were married - unless they sell up. The problem, according to Mr Wallbank, 68, is that they are finding it impossible to sell the farm while it carries this liability. "We accept that we have to pay, but the simple fact is that we have no means of doing so without selling the farm." The Wallbanks have been given a deadline of February 16 2009 to pay, in time for building works on the chancel to begin in March.
Home moving tips
Monday, February 2, 2009
Action required to avoid a ‘War of Attrition’
The Government needs to act and act quickly to stimulate an increase in the availability of mortgages if the housing sector is to pull itself out of its recent slump, according to a leading Group of residential conveyancers.
Despite experiencing some of the lowest ‘attrition rates’ in the industry, the Convey Group has seen the number of house purchase transactions being cancelled before completion rise sharply through 2008 and the availability of mortgage finance has been the key driver.
Chief executive Lloyd Davies, commented: “Of course there are always other reasons for not completing on deals, a search might highlight an unknown problem on a property or a customer might simply be changing their mind about moving, but we’ve never seen the rate as high as this.”
The Convey Group, which can complete up to 1000 residential property transactions in a month, reported ‘normal’ attrition rates of around 25% prior to the sub-prime issues in the US and the onset of the credit crunch. At times in 2008 the rate has hit a peak of 40%, which has not only spelt misery for buyers and sellers, but had a drastic knock-on effect on the entire housing sector.
The attrition figures coincide with a Bank of England report showing the lowest rates for mortgage approvals since records began in 1993, with just 32,000 deals done in October this year, down from an average of 114,000 a month in mid-2007.
Davies continued: “Falling house prices mean that buyers are struggling to meet the loan-to-value requirements that lenders are demanding on their best products and as a result the base rate reductions are having little impact. If buyers can’t qualify for these mortgages then they are going to keep withdrawing from the market, which is going to suffer as a result.
“The Government has already committed to underwriting defaulted payments and recently announced a package to help to first time buyers, but more needs to do be done to encourage new mortgage deals that buyers can afford.
“Northern Rock was the UK’s largest mortgage lender, but we have seen the bank offloading its mortgages in an attempt to strengthen its balance sheet. The effect of this is to use up funds from other lenders that would otherwise be going to new borrowers and provide the credit life line that’s needed to kick-start the housing market.”
This sentiment is reflected in a Government-commissioned report from Sir James Crosby, the deputy chairman of the Financial Services Authority, which called for more Government help for the mortgage market.
Whilst stopping short of calling for US-style state run mortgage organisations, Sir James did indicate that the Government should help the mortgage market by guaranteeing £100bn of mortgage-backed securities in 2009 and 2010, a strategy which he also suggests could make money for the Government.
Despite experiencing some of the lowest ‘attrition rates’ in the industry, the Convey Group has seen the number of house purchase transactions being cancelled before completion rise sharply through 2008 and the availability of mortgage finance has been the key driver.
Chief executive Lloyd Davies, commented: “Of course there are always other reasons for not completing on deals, a search might highlight an unknown problem on a property or a customer might simply be changing their mind about moving, but we’ve never seen the rate as high as this.”
The Convey Group, which can complete up to 1000 residential property transactions in a month, reported ‘normal’ attrition rates of around 25% prior to the sub-prime issues in the US and the onset of the credit crunch. At times in 2008 the rate has hit a peak of 40%, which has not only spelt misery for buyers and sellers, but had a drastic knock-on effect on the entire housing sector.
The attrition figures coincide with a Bank of England report showing the lowest rates for mortgage approvals since records began in 1993, with just 32,000 deals done in October this year, down from an average of 114,000 a month in mid-2007.
Davies continued: “Falling house prices mean that buyers are struggling to meet the loan-to-value requirements that lenders are demanding on their best products and as a result the base rate reductions are having little impact. If buyers can’t qualify for these mortgages then they are going to keep withdrawing from the market, which is going to suffer as a result.
“The Government has already committed to underwriting defaulted payments and recently announced a package to help to first time buyers, but more needs to do be done to encourage new mortgage deals that buyers can afford.
“Northern Rock was the UK’s largest mortgage lender, but we have seen the bank offloading its mortgages in an attempt to strengthen its balance sheet. The effect of this is to use up funds from other lenders that would otherwise be going to new borrowers and provide the credit life line that’s needed to kick-start the housing market.”
This sentiment is reflected in a Government-commissioned report from Sir James Crosby, the deputy chairman of the Financial Services Authority, which called for more Government help for the mortgage market.
Whilst stopping short of calling for US-style state run mortgage organisations, Sir James did indicate that the Government should help the mortgage market by guaranteeing £100bn of mortgage-backed securities in 2009 and 2010, a strategy which he also suggests could make money for the Government.
Subscribe to:
Posts (Atom)