I thought I would remind my readers of a development that is of the utmost importance to property Lawyers and their clients.
What's special about the 13th October 2013? It's a day like any other. From 13th October 2013 (at midnight) certain rights will lose their status as overriding interests.
What are overriding interests? First- some context. The purpose of the Land Registration Act (LRA) 2002 was to make the register an accurate reflection of title by reducing the number of unregistered entries (and thus the number of overriding interests). Overriding interests are unregistered interests in land which override first registration of land and any other subsequent dispositions of land. In short, they will bind any purchasers of land whether or not s/he knew about them. This will change from 13th October 2013. From the 13th a purchaser of land will not be bound, by an overriding interest, if s/he did not know about them. To protect an overriding interest, a caution against first registration (for unregistered land) or a notice (for registered land) will have to be entered.
What examples of overriding interests exist? common examples are manorial (hunting, shooting and fishing) and franchise (the right to hold a fair) rights. However, the Chancel repairs liability is potentially the most significant for clients and their Lawyers.
What is a Chancel? The Chancel is the area around the sanctuary in the Church.
How is the right enforced and who enforces it? The Parochial Church Council (PCC) has the fiduciary duty, as a charity, of protecting and preserving the Church's assets. The PCC will enforce the liability. To guard against this risk, Lawyers have traditionally carried out Chancel repair searches and taken out Insurance policies should a risk arise. The case of Aston Cantlow v Wallbank revealed the potential expense that may be incurred (the Wallbanks were liable for repair liabilities running into the thousands!).
How is the 13th October change significant? The Church of England has advised the PCC's that they have a duty (as a charity) to maximise their income by enforcing Chancel repair liabilities. Enforcement will also effect the PCC's ability to obtain heritage grants. The 13th October change aims to provide greater certainty for purchasers of land. Lawyers will no longer have to carry out searches- any risk will be revealed by the title registers and Insurance will only be needed if a risk is revealed by the register. However, Insurance premiums will increase as there is a greater likelihood that the Insurance companies will have to pay out. There will also be potential disputes as to whether the liability should attach to a particular piece of land or whether or not it should be shared amongst the other land owners. The general point is this- a purchaser of land, after 13th October, will not be bound by a Chancel repair liability if s/he did not know about it. We shall have to wait and see whether or not there are a series of attempts by PCC's to register their rights. In any event, Lawyers should be aware of the changes and mark the 13th October 2013 in their diaries.
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