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Properties that have chancel repair liability could be required to pay for repairs to their local parish church, whether they want to or not. This can create hurdles in trying to sell a house or flat, because buyers might be wary of that costly liability. Below you’ll find important tips on how to overcome such barriers to selling, and find a buyer quickly and at a competitive sale price.
- What is chancel repair liability?
- How chancel repair liability can make it harder to sell a home
- Changes to chancel repair liability for properties
- Responding to a chancel repair liability claim
- Your potential tax liability with selling your property
- Choices for selling a home with chancel repair liability
- Top questions about selling property with chancel repair liability
What is chancel repair liability?
If you own a freehold or leasehold property in England or Wales, there’s a possibility that you might be subject to chancel repair liability (Wikipedia provides the definition of chancel repair liability), which can in certain circumstances lead to having to pay many thousands of pounds in costs.
This liability is a requirement that certain property owners within the boundaries of a local church parish pay for repairs needed at that church, so long as the church was constructed before 1536. The mandate stems from a law that was enacted during the reign of King Henry VIII when he sold off monasteries and transferred the responsibility to repair the buildings from the monks that had lived in them to whoever purchased the land where monasteries once stood.
Chancel repair liability can apply to leasehold or freehold properties of all conditions, shapes, sizes and types depending on where they are located. But complicating matters, the property need not always be located very close to a church, and can be subject to liability even if it’s very far away.
How chancel repair liability can make it harder to sell a home
Because of the potential significant costs that might be involved with chancel repair liability, it can make some buyers see properties that have this liability as being problem homes that they won’t be interested in making an offer on, which can complicate your attempts to sell the house or flat.
As the UK Government notes, chancel repair liability can be shared between churches, individual private homeowners, agricultural landowners and various institutions.
But sometimes the liability might be allocated to just one property owner, and a well-known lawsuit highlights just how problematic and costly it can be – and why the potential for being subject to such liability can be a dealbreaker for many buyers when looking at your home.
The prominent lawsuit is known as Aston Cantlow v. Wallbank, in which a Warwickshire couple Adrian and Gail Wallbank became the owners of a farm they inherited in 1990. Soon after become the farm’s owners, the local St John the Baptist church gave them a bill for chancel repair liability that was more than £100,000. The couple were astounded to receive the bill because they did not think that the legal requirement for chancel repair liability still applied. As a result, they tried to fight the bill in court but they ultimately lost that case in 2003. In order to clear their mandated debt, they had to eventually sell their home to cover the cost.
Such eye-catching high costs may be incredibly uncommon, and the typical chancel repair liability charge might be much less. However, the very fact that such a large financial threat can exist might be more than enough to scare potential buyers aware from your property.
Changes to chancel repair liability for properties
The UK government has taken some steps to revise chancel repair liability, although the last major development on this front was with a 2013 law amending how liability may apply. You can read more about chancel repait liability in this article by Kew Law LLP Solicitors.
Those changes were in response to the high-profile Wallbank litigation and other similar cases where property owners were caught by surprise with being liable for paying often massive bills in the tens or hundreds of thousands for the repairs of a church in the region. The government at the time made attempts to reduce the surprise of finding out a home has such liability, and to restrict the scope of liability as well.
In particular, the law was revised to state that from October 13, 2013, any church parish that believes it has a chancel repair liability claim over nearby properties must register notice of that claim with the HM Land Registry, a non-ministerial division of the UK government. Registering this notice grants churches the ability to charge repair bills even once homes are sold. For churches, this helps to give them more clarity on the scope of who might potentially be liable.
The HM Land Registry includes the church’s notice in the title documents for affected properties, which makes them much easier for buyers to discover as part of the search process where they hire a legal professional to uncover any possible issues with a house or flat.
If a church fails to register a chancel repair liability claim with the HM Land Registry, it will not automatically lose the legal right to pursue a claim from a property owners. However, the claim can vanish if the property ownership changes for a "valuable consideration" – and this would typically cover the purchase of a home but not transferral of ownership via inheritance.
Therefore, the 2013 law revisions have made it easier for property buyers to find and avoid existing chancel repair liability, but people who take over ownership of a home through other means such as inheritance or a non-valuable consideration might still have this liability.
Responding to a chancel repair liability claim
If you own a property on which a church tries to make a chancel repair cost claim, be sure to first obtain professional advice on the matter.
You may be advised to approach the UK Government Land Registry and object to this effort, and hopefully resolve whether or not your house or flat is indeed subject to such liability.
Fighting a chancel repair liability claim could be your best option if you believe that the request for paying the associated costs is not valid, but this can be a time-consuming process. The good news is that you can still try to find a buyer for your property even when such a claim exists, particularly if selling to a quick property buyer that has experience buying such homes.
Another way that you might be able to make your home with a chancel repair liability claim more attractive to prospective buyers is obtaining indemnity insurance for the property that would hopefully cover the entire costs associated with any successful charge you might receive. Or a potential buyer could also consider purchasing such insurance to protect them in the future.
Your potential tax liability with selling your property
One of the main reasons why people decide to sell their properties is that they need to raise funds, whether that’s to generate money for buying their next home, selling due to financial difficulties, or other reasons. That’s why it’s crucial to understand the various costs associated with selling.
Having a better understanding of your possible post-sale fees can be useful in plotting a budget for the sale of your property, in order to hopefully avoid having to sell at a loss. And Capital Gains Tax can sometimes be a charge that catches people by surprise after selling.
However, there are certain ways that you can reduce or even eliminate your Capital Gains Tax burden, so it’s always worth speaking with a tax professional about these possibilities.
And if your home unfortunately sells at a breakeven price, or at a loss compared to what you initially paid for the property, then you will usually not have to pay any Capital Gains Tax.
Choices for selling a home with chancel repair liability
When you are ready to sell your property that has chancel repair liability, you will need to choose which of four typical options you’d like to use for trying to find a buyer.
These selections are selling to a quick property buyer, selling with an estate agent, selling at a property auction, or selling on your own. They each have distinct advantages, but you’ll find that a couple of the choices also have rather major drawbacks, such as including fees that will add to your costs when selling, or taking many months or even longer before you find a buyer.
To find the most suitable choice for your unique wants and needs, write down a budget for the sale of your property that specifies the most important aspects, such as how much time you are willing to wait to find a buyer, the amount of commission that you may be open to paying to sell your property, the ideal sale price that you would like to achieve and any other relevant factors. Then compare this budget against the pros and cons of the various methods outlined below, and this should assist in narrowing down the search to a single ideal option for you.
Selling to a quick property buyer
Quick property buyers are companies like the London-based LDN Properties, which was founded in 2003 and gives homeowners throughout the UK a no-hassle, streamlined and zero-stress way to get competitive and speedy offers for selling their houses, flats, and other freehold or leasehold properties.
They are called quick buyers because they have the financial ability to buy properties right away, with no waiting for many weeks or months to first win approval for a mortgage that would the cost of the purchase. This often cuts down the average timeline for selling to just a few weeks, and that includes exchanging contracts and paying homeowners their proceeds. This makes using a quick property buyer often the fastest way to sell a property by far.
Another important advantage of selling to a quick property buyer is that the trustworthy companies will not charge owners commission when purchasing their homes, so you will be assured of receiving the full sale proceeds. This can be incredibly useful to reduce your costs, compared to using methods that charge fees such as estate agents and auctioneers.
Quick property buyers also have plenty of experience with buying a very varied range of homes, both freehold and leasehold, and no matter their type, size, shape, condition or age. LDN Properties, for example, launched almost 20 years ago and in that time has developed a long list of purchases they have considered that includes not only properties with chancel repair liability but also farms, student homes, selling a park home, flats with elevated radon levels, houses with subsidence, mundic properties, penthouse flats, houses located near power lines, bed and breakfast properties, and more.
When trying to find the right quick property buyer for your home, it is best to look for companies that are registered with The Property Ombudsman (TPO). This is an independent entity that writes rules to protect owners from fraud in the quick homebuying industry, and all TPO members must follow those rules, which should give you extra peace of mind when selling your property.
To find out whether a company belongs to TPO simply visit the entity’s website, click on the “Find a Member” button on the main welcome page, and type in the name of a specific fast buyer. If they are legitimately registered with TPO then you will be able to see their complete membership details, whereas if they are not registered you won’t get any results. Be cautious of selling your property to a quick buyer that either claims to be a TPO member but cannot prove it, or that outright refuses to join TPO, because either of these situations might be scams.
Selling with an estate agent
You won’t have to do much work with selling your home when using an estate agent, because they’ll do most of it. This includes preparing a listing for the property that describes it and features photographs of the inside and outside, advertising this listing in their office, in local newspapers and online, organising viewings where potential buyers get to tour the inside and outside of your property, and hopefully fielding serious offers from any serious buyers.
For all of this work, estate agents will usually charge commission based on the final sale price you’re able to get for your home. This charge will be subtracted from the sale proceeds immediately, which will increase your overall selling costs.
And this is not the most rapid way to sell your home, because you might be waiting for many months or even more than a full year before you receive a genuine offer from a buyer.
Just note that some estate agents might only know how to sell certain types of properties, and they may have no experience with selling homes that have chancel repair liability. If that is the situation, the estate agent is likely to find it almost impossible to interest people in your home. Don’t be afraid to ask companies whether they’ve ever sold your variety of property before.
Selling at a property auction
You’re taking a gamble when using a property auction because there is no promise about what the final sale price for your home might be. Your house or flat might receive no bids, in which case it will remain unsold and you’ll have to start over with trying to find a buyer. All this will do is add several months of delay on to the timeline for attempting to sell your property.
Or you might get a single bid at the reserve price, which is the cheapest price at which you are willing to sell your home. This bid is a legally binding agreement to purchase your home that the winning buyer can sue to enforce, so you must choose a reserve price that will avoid you having to sell at a loss even after the auctioneer has taken their fees out of your sale proceeds.
Those fees are typically charged as a percentage of a property’s final sale price, but you should consider asking individual auctioneers whether they might be willing to negotiate a lower fee, or if they will accept shifting the burden of paying some of the fees on to the winning high bidder.
This is often not a very quick way to sell your property, because you will have a wait of several weeks or months between when you first list the home for sale and when the auction actually happens. If the property does sell at an auction, the winning high bidder will then usually have about 28 days to complete all of their paperwork and other steps to finalise the purchase.
Some auction houses might give buyers even more time for doing this work. You could consider talking with individual auctioneers to find out whether they might accept setting a tighter deadline for the buyer to complete their actions, which could speed up the sale.
Some auctioneers might also not have had any success with trying to sell a home that has chancel repair liability, and if that’s the case then they are unlikely to know how to generate any interest in your home from the people that will be attending the eventual auction.
Selling on your own
Selling without any assistance means that you will be solely responsible for preparing and advertising a listing for your home, taking care of viewings, and fielding offers from buyers. It’s a huge undertaking and can be very stressful, and not something you can do in your spare time.
For those reasons, it’s only recommended as an option if you have any experience with selling properties, or you have a skilled friend or family member who can help you out for free.
Otherwise, you can expect to be waiting a very long time before selling your property when you choose this method. It’s not unusual for an entire year to pass before a home might receive an offer from the owner sells on their own, which makes this often the slowest of the four options. That’s far from a great outcome if your top priority when selling is doing so as fast as possible.
The only obvious benefit of selling on your own is that you won’t have to pay an auctioneer or estate agent any commission for finding a buyer, in the event that your property does sell, which can help to lower your costs with selling. However, this saving might be offset by the money that you will have to spend on marketing your home and other costs with trying to find a buyer.
Instead of enduring the long wait time, stress and expense involved with selling on your own, you may want to consider selling your house or flat to a quick buyer like LDN Properties – these companies never charge any fees and can complete the purchase of your home in often just a few short weeks. It can be a straightforward and no-hassle way to secure a zero-commission sale of your home.
Top queries and answers about selling property with chancel repair liability
Homeowners considering selling their home quickly may have some questions to ask us that range from the level of repair works required before selling through to selling a home in a bad state of repair. These are a handful of the questions we’re asked when it comes to selling with chancel repair liability:
