Negative equity: Part 2, the laches defense
[Continued from yesterday's Part 1.]
When we left our plucky, ‘attractively disheveled’ English couple, as profiled in a Daily Mail article, they were beset by a maintenance bill for the chancel of St. John the Baptist in Aston Cantlow, assessed by the local PCC, based upon a glebe claim that came as a complete surprise to them.
The Wallbanks emerging from their day in appellate court
Before you think the Church of England entirely heartless, start hearing the other side’s case, as helpfully sprinkled throughout the Daily Mail piece, starting with the weakest one:
The Revd Canon Mervyn Roberts, director of communications (yes, even the church has them) for the
Not paid a penny for what she does, but carrying the weight of responsibility
Undoubtedly true, but of course a complete non sequitur. Even if the Wallbanks paid, the money goes to the chancel of the church, not to the church wardens. Nor are church wardens slaves; they don’t have to do it. They do it, one presumes, for faith and love of the church, not in anticipation of a big receivable from a sixteenth-century dormant glebe land claim.
He adds: ‘I’ve had it through the neck with people who ask, “How can the Church of England do this to this poor couple?”, and I feel like saying, “Look, there are no winners.”‘
There are no winners here
The Wallbanks are, of course,
We certainly wouldn’t want to waste any sympathy on City bankers.
This is what comes of letting city bankers zoom in and out of town
All right, so the church is off to a pretty awful start.
Um … I trust things will get better from here?
Let us and the Daily Mail do the church’s work for it:
Most of all, what the Wallbanks could not believe was, as Gail puts it: ‘That it could be possible for just one person to find themselves legally responsible for work to be done on a church that had been around for centuries. How could history single people out in such a way?’
They were called ‘landowners’, and they were ’singled out,’ as Ms. Wallbank puts it, by virtue of being rich and earning their living off the sweat of others.
Mrs Wallbank’s father bought Glebe Farm at auction in 1970 (a year when the average house price was £4,950) for the sum of £41,500. The sale documents do include a clear reference to the chancel repair liability, which it notes ‘is still subsisting and capable of being enforced’.
There goes the “how could I know?” defense.
Capable of being enforced?
Ms. Wallbank’s father saw the deed, which clearly referenced an obligation ’subsisting and capable of being enforced.’
Gail, however, says her father had made inquiries, including with the vicar at the time, and was confident this clause was a mere anachronism with no legal force.
Spot the anachronism!
Oral history – more properly, verbal history – isn’t worth the paper it’s written on.
Thus, on inheriting the farm, she too felt reassured that this amounted to nothing more than a gentleman’s agreement.
But here’s the thing: even gentleman’s agreements are honored. Ms. Wallbank seems to think a gentleman’s agreement is one that can be ignored because it has never been enforced.
With the benefit of hindsight, this assumption sounds naive.
Not entirely. The legal term for this concept is laches (rhymes with batches), and it’s based on the reasonable presumption that if a right has lain dormant for years, then it has lapsed, perhaps because those who act based on market knowledge could not know about the right’s existence.
The Wallbanks also say they have been unable to find any case in which any owner of Glebe Farm has, over the centuries, been required to foot any bill for the chancel –
This is like saying that since we’ve never made a claim on an insurance policy, the policy has somehow become invalid, and in any case it’s undone by the immediately succeeding clause:
– though some have done so voluntarily.
Maybe the voluntary contribution was in lieu of challenging the enforceability of the glebe land claim; maybe it was always understood to be a burden of owning the land.
‘My father had also made a contribution to the church repairs,’ says Gail. ‘He paid for some of the ornamentation on the church tower to be replaced, and that wasn’t connected at all to the chancel.’
Money being fungible, a defense saying that well yes, we paid the church, but not for the chancel is too nice a distinction.
I don’t believe in nice distinctions
But the Wallbanks point to the handwritten minutes of an extraordinary meeting of the PCC in July 1968 which was concerned with raising funds for work on the chancel roof. In these, it is noted: ‘Vicar said that while he would approach Mr Terry [the then owner of Glebe farm] he had been informed by Diocesan lawyers that this [obligation] had no weight in law.’
While this is interesting, it’s flimsy:
It’s a single bit of paper from forty years ago.
It represents only a hearsay record.
The event was a purely internal meeting not communicated to the property owner.
It is contradicted by the plain language of the property’s title deed.
In fact, where’s the title company? As one of the article’s early commenters unsympathetically wrote:
Lots of old houses have this liability mentioned in the deeds, but it is possible to get insurance to cover this, although it is too late for this couple. Surely, though if the Church have the weight of law behind them, then it’s possible for the Government to change that law to get rid of it altogether or at least put some cap or timescale on it. People shouldn’t suddenly be called upon to foot repair bills if the Church hasn’t ever called on this clause in the property deeds before.
- Liz,
Note the last sentence’s laches concept.
How many other ‘lay rectors’ are there?
Gail is a part-time locum GP whose annual income - before expenses and tax - is roughly £30,000. Andrew estimates the income from their two farms - the one they rent out in Aston Cantlow and the Welsh sheep farm in which they live - is ‘around £33,000, but that’s before the massive cost of sorting all this out is taken into account’.
The picture changes a little.
The story complicates as the facts change
The Wallbanks don’t actually live in Aston Cantlow, they live in
They are landlords, just like their medieval forebears, deriving income from property that someone else farms.
Conditions are much better now
If so, and if their title to the property derives, many centuries earlier, from a land grant by the church, then the glebe land lien can be seen as an occasional operating cost, the sort of thing logically covered by replacement reserves. The Wallbanks haven’t budgeted for that – quite understandably, given that up to now it’s never been assessed on them, but they have no real estate equity grounds to complain.
After all, what then is the aggregate present value of the receipts they and their forebears have derived? Surely many hundred times the amount of the current chancel bill.
Selling Glebe Farm at its true market value (which in 2007 was estimated at £2,000,000) –
Let’s recapitulate. Mrs. Wallbank’s father bought the farm in 1970 for £41,000. Today it is worth 50 times that, or £2,000,000. That’s an average appreciation of 10.5% annually, whereas in the same interval UK CPI inflation was 6.5% annually, or 12x. In other words, the farm is worth four times as much in real terms as it was when Ms. Wallbank’s father bought it.
– in order to raise it is not an option as long as the chancel repairs liability remains, since any purchaser would (understandably) be unwilling to take on such an open-ended commitment.
Nonsense!
Of course the farm could be sold now. The buyer would (a) reduce the purchase price by the estimated cost of settling with the church (which has accrued to £500,000 but could most likely be discounted for something considerably less), (b) enter into some kind of agreement with the church to define the boundaries of later claims on chancel repair (after all, if you fix it now, it should be good for decades), and (c) start funding a replacement reserve and include that cost in its valuation projections. It wouldn’t be worth two million quid, but it will have significant value.
Jury of readers, consider your verdict.
Meanwhile, there are interesting policy and land use implications.
[Concluded tomorrow in Part 3.]
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