Why archaic laws could land you with repair bills for the local church

It may be a remnant of the tithes that supported the medieval church, but chancel repair liability can strike modern owners at any time. The tithes from "rectorial lands" were paid to the priest, who had to maintain the chancel. Gradually, tithes were bought out but the repair obligation remained. The Government has given parochial church councils until 2013 to register chancel liabilities or lose them.

Chancel liability hit the headlines two years ago when a Warwickshire couple had to pay £100,000 for repairs to their local church. The problem is that it is almost impossible to tell whether a liability exists without a detailed search of old maps and lists in the National Archive at Kew.

The type of property gives no clue. Investors might believe that a flat in a new, inner-city development cannot be subject to a medieval tax. Not so, says Christopher Warren-Dickins, a solicitor at Trowers & Hamlins. "Liability can be found in urban areas and even on a new property. The liability is attached to the land, not the structure."

Last week the Law Society wrote to the housing minister Yvette Cooper calling for the ancient obligation to be abolished. Chancel repair liability falls on owners irrespective of their religious practice, is unpredictable as it only becomes due when repairs are needed, and can be a substantial amount if the church is large and ancient.

The Law Society's submission also points out that it is unclear how it applies to leasehold or the new commonhold and shared-ownership properties. The fear of unlimited liability is hindering regeneration, it says, because housing associations cannot take the risk. Des Hudson, chief executive of the Law Society, says: "Investigating and insuring against potential liability increases costs to consumers and creates delays in the buying process. There are surely better ways of maintaining historic churches."

He says chancel repair liability is also a poor way of paying for the restoration of churches. The money is difficult to extract from unwilling homeowners, and it can be awkward to separate the costs of the chancel out of the restoration of the entire church. The Law Society suggests that chancel liability be replaced by a small levy on all property transactions, the money to be spent on restoring all ancient churches.

According to the society, chancel liability is now a £20m industry. Nick Francis is a director of Chancel Liability Services, which offers a web-based service. "It searches on modern addresses against ancient parish boundaries, so it will tell if there is a potential liability," he says. "We can also carry out a full check at the National Archive to locate specific liabilities."

He points out that parishes are legally bound to pursue chancel repair fees. "Members of the parochial church council act as trustees, so they have a fiduciary duty to pursue claims."

Francis says that insurance is relatively cheap considering the size of potential claims: "We offer various levels of insurance up to £2m for 25 years on a single premium of about £60."