Chancel Repair Liability Insurance

LorraineJ_2
LorraineJ_2 Posts: 1 Newbie
in Insurance & life assurance
I am in the process of purchasing a new house and after having a Chancel Check done, the results have come back as "The building is located within the historical boundary of a tithe district within a parish which continues to have a potential chancel repair liability".

There is an insurance that covers you for 25 years against any claims.
The problem is if someone conducts a more detailed search (i.e. like a future buyer of my property) and learns that there is a definate repair liability against our property, obtaining insurance would become imposible - according to the Law Society guidance.

Is Chancel Repair Liability claims a real risk or is the insurance company, who's address a shared suite in offices in Kent taking advantage of people and scaremongering?

Has anyone else encountered this Chancel Repair Liability or taken out the insurance against it?
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Comments

  • Woby_Tide
    Woby_Tide Posts: 5,344 Forumite
    First Post Combo Breaker First Anniversary
    there are more detailed threads on the house buying forum. It seems to have very mixed feelings, a lot think it's a big con hence only one company offers the insurance, others believe it to have valid concerns and have taken cover. A purely personal decision should be taken along with legal advice.
  • goldgordon
    goldgordon Posts: 6 Forumite
    My buyer's Solicitor asked for Chancel Repair insurance through the only company that appear to offer it. I did some digging in the local records office and found the Tithe Maps and the Church Accounts. The whole of the outer suburbs where I live appear on the Derbyshire tithe map so using Chancel Checks criteria the several thousand houses in the area are all affected.

    Appearance on a tithe map does not confirm liability, only rectorial land is liable - this was land set aside for the rector to generate income for him to live on and to discharge his responsibilities - which included repairing the chancel of the church. Only a small proportion of the parish would be rectorial land. (The difference between a Rector and a Vicar is this entitlement to income - you find out some interesting things when you sell your house)

    Finding out if you house is effected is as difficult for the PCC on behalf of the the church is as it is for the house owner unless it is already on your deeds.
    As it is incidently in the WALLBANK case with which Chancel Check try to frighten us with.

    My house occupies about 1/8th of an acre. My buyers solicitors want me to insure a minimum of an acre for £500,000 liability. Something is getting out of proportion here. Unless of course you live in a street or area with Glebe in the name...
  • Woby_Tide
    Woby_Tide Posts: 5,344 Forumite
    First Post Combo Breaker First Anniversary
    shame there is no insurance against spamming
  • drjohnbullas
    drjohnbullas Posts: 2 Newbie
    goldgordon wrote: »
    As it is incidently in the WALLBANK case with which Chancel Check try to frighten us with..

    I knew nothing about this sort of insurance (December 2008) and the solicitors included a ChancelCheck Report and ChancelSure policy to pay for (from £45.87 for £100k cover for 25 years residential non successor up to 5 acres)

    "The above building is located within the historical boundary of a tithe district or parish which continues to have a potential chancel repair liability based upon historical parish boundary data and the relevent documentation pertaining to chancel repair liability held by the National Archive" (their emboldening colour and underlining)

    "It should be noted that this service searches against the identified address point of the subject building and not the delineated boundary of the property, in order to establish the location in respect of the relevent historical boundary" .... so it doesn't actually compare the REAL boundaries of your property with the relevent historical boundary, is that an appropriate and accurate search methodology to be used in this circumstance when comparing your plot extent against the parish boundaries?

    So I called ChancelCheck who only told me the horror story of the 198k claim against the couple who inherited the liability to maintain the local church but ChancelCheck did not ( or could not) come forward with any more mundane cases of (say) people living in the middle of a city of town being made liable for repairs to the local church. Have there EVER been any?

    This historical biggy was Aston Cantlow and Wilmcote with Billesley Parochial Church Council v. Wallbank and Another. read about it here (not a typical case? are YOU a lay rector of the parish???)
    House of Lords (http://www.publications.parliament.uk/pa/ld200203/ldjudgmt/jd030626/aston-1.htm)

    Google: http://www.google.com/search?source=ig&hl=en&rlz=&=&q=Aston+Cantlow+and+Wilmcote+with+Billesley&btnG=Google+Search&aq=-1&oq=

    Googleing for chancel repair liability reveals the Law Society's campaign to seek abolition of chancel repair liability
    http://www.lawsociety.org.uk/newsandevents/news/majorcampaigns/view=newsarticle.law?CAMPAIGNSID=310435
    They say:

    The chancel repair liability system is unsatisfactory for a number of reasons:
    • It is uncertain and capricious because it's often very difficult to ascertain the existence or extent of the liability.
    • It is increasing the cost of conveyancing.
    • It is discriminatory, benefiting only churches of one denomination.
    "The Law Society represents solicitors in England and Wales. From negotiating with and lobbying the profession's regulators, government and others, to offering training and advice, we're here to help, protect and promote solicitors across England and Wales."

    see http://www.lawsociety.org.uk/aboutlawsociety.law )

    Interesting that the very solicitors who are probably members of a Society seeking abolition of chancel repair liability are the ones who are part of the peddling of these policies

    The ChancelCheck paperwork says

    "The Church is also actively registering their interest to protect their right to charge chancel repair liability in perpetuity"

    The Church are obviously so desperate to secure this income stream that

    "In 1982 the General Synod of the Church of England resolved that chancel repair liability be phased out over 20 years, and in 1985 the Law Commission recommended that it be abolished. "

    AND

    "A Transitional Provisions Order was made which came into effect on the 13th October 2003. This order effectively means that ALL chancel repair obligations will cease on the 13th October 2013 unless a the chancel of any Church has noted their interest in any particular property or land with the land registry before this date." from: http://www.chancel.org.uk/chancel-repair-liability.php

    "NB: Chancelcheck does not publish the relevant parish name to deter contacting the church. Doing so will put The Church on notice of a potential liability and may lead to negating insurance cover"

    Anyone any idea what this means in English????? how can taking insurance out against a bill from The Church in ANY WAY expose them to a liability???? OR does that mean if YOU contact the Church YOUR insurance cover is negated???

    The paperwork sent through by ChancelSure also says :

    "Where a property is affected, conveyancers who have failed to screen for this risk may be deemed negligent"

    .... can anyone explain what the hell this means???.... more scare tactics???

    Published content quoted whether verbatim or not is quoted and provided for the purpose of research in the UK
  • deeplyblue
    deeplyblue Posts: 151 Forumite
    drjohnbullas wrote: »
    "A Transitional Provisions Order was made which came into effect on the 13th October 2003. This order effectively means that ALL chancel repair obligations will cease on the 13th October 2013 unless a the chancel of any Church has noted their interest in any particular property or land with the land registry before this date." from: http://www.chancel.org.uk/chancel-repair-liability.php

    "NB: Chancelcheck does not publish the relevant parish name to deter contacting the church. Doing so will put The Church on notice of a potential liability and may lead to negating insurance cover"

    Anyone any idea what this means in English????? how can taking insurance out against a bill from The Church in ANY WAY expose them to a liability???? OR does that mean if YOU contact the Church YOUR insurance cover is negated???

    As far as I can see, what ChancelCheck are saying is this. Chancel Repair liability will cease in 2013 for all properties UNLESS in the meanwhile any affected Church has got hold of the Land Registry, and said to them "with regard to property XYZ, we wish to notify our interest in this property for Chancel Repair Liability." If they do that, then the property will continue to be subject to Chancel Repair Liability.

    So, the logic goes, if you get in touch with your local Church, and ask them, "Is my property subject to CRL?", then may say, "Dunno," then go and look at their books and say "Aha! Yes, your property is subject to CRL now, and now that we know that we will contact the Land Registry and make sure that it stays subject to CRL in perpetuity."

    If you do NOT contact the church, OTOH, they may continue in ignorance of your liability - or even in some cases of the existence of CRL - and so NOT notify the Land Registry of their interest. Which would mean that it would lapse in 2013.

    So, the logic of ChancelCheck is that IF you contact the church you may have caused them to take measures which, if you had NOT contacted them, they would not have taken. Or, to put it another way, if you hadn't said anything the CRL would have lapsed in 2013, but now it will continue in perpetuity, or until some government has the b***ls to abolish this thing entirely. Naturally ChancelCheck would prefer to insure you for 25 years against a risk which will be abolished in 5 years time. So, if you do contact the church, CC say, that might create the hazard and so negate your cover.

    This assumes, of course, that PCCs (Parish Church Councils) are unaware of this possibility, and that, if they were aware, they would be hurriedly registering this interest ASAP. Given that they have a decade to do it, and that diocesan authorities will certainly be aware of the issue, it seems unlikely that the action of inquiring about the issue will be crucial in determining whether or not a PCC acts. It does, however, make it more likely that you will remain in ignorance over whether or not you are subject to CRL and that you will pay up for insurance, "just in case".

    The Church of England, however, had already said that it would prefer to have CRL abolished. One defence of CRL is that, whilst it exists, other funding bodies (e.g. English Heritage) will refuse help whilst you can still get money from "your own resources" - amongst which are those properties who should pay up for chancel repairs. So the Church, the argument goes, has to enforce it. Were CRL to be abolished, the Chruch would not have to tap it before going to other funding sources.

    So it may be that PCCs will decide NOT to notify an interest against a property anyway, and let the CRL lapse in 2013. I'm deeply mistrustful or anyone who tells me that my ignorance, but not theirs is necessary. And I really really don't buy into the argument that the church concerned will remain ignorant if I don't draw their attention to the matter. If they care, they will find out which properties are liable, and get on to the Land Registry.

    What I would like to know, and no one seems able to say, is how anyone finds out whether or not a particular property is sibject ot CRL.

    db
  • drjohnbullas
    drjohnbullas Posts: 2 Newbie
    deeplyblue wrote: »
    What I would like to know, and no one seems able to say, is how anyone finds out whether or not a particular property is sibject ot CRL.

    db

    The only way would be for the parishs to publish an easily FREELY accessible list of properties that were subject to chanceltax ( this would throttle a lot of the solicitors and ChancelChecks revenue gained for offering insurance for properites where a claim would NEVER be made by the Church) - but this would stop you getting insurance against a claim as who would offer insurance against an idenitified risk

    OR get the church to abolish it!

    JB
  • deeplyblue
    deeplyblue Posts: 151 Forumite
    drjohnbullas wrote: »
    This would stop you getting insurance against a claim as who would offer insurance against an idenitified risk

    It would certainly make the insurance more expensive, but it need not stop you getting insurance altogether. After all life insurance companies have been insuring smokers for years, but just at a higher premium.

    Even if you know that the house is subject to CRL, then it does not mean that you will necessarily be asked to pay up. If the risk of actually having to find large sums of money were that great, then I think we would have heard a lot more about CRL before now. The obscurity of the subject suggests that there have been very few claims by churches over the last decades.

    I can see that, with the profile of CRL being raised, that the number of claims might rise. However, there are substantial problems in any church's way when it comes to raising money through CRL (like finding ALL the people responsible for it in any given area). So, I think this is little like flooding - you are known to be at trisk, but even so the risk may not be great.

    There is also the question of the sums of money involved. A posting by someone else on another consumer forum may be of interest:
    I am the incumbent of a parish to which chancel liabilities attach, and it is a minefield. Twenty years ago a legal opinion on one property stated that, because it was only one small part of the original property to which the chancel liability attached, the owner of the property in question would carry liability for "one quarter (or less)" of "113/73908 of any liability" - in other words, about £38 in any £100,000 ! smile.gif The opinion given was that "the daunting size of the task which the PCC would face, in order to identify everyone responsible, would deter them from undertaking such an exercise unless they faced a very major expense". Hardly surprising. The Aston Cantlow case was simple by comparison.
    (http://www.consumeractiongroup.co.uk)

    I think that there would still be people prepared to give CRL insurance, once the actuaries had been at it. It's not, after all, a certaintly that you will be asked to pay up, and still less certain that you will be asked to pay up large sums. And they are only working on an uncertainty until 2013, by which time you will be able to check for CRL with the Land Registry.

    db
  • deeplyblue
    deeplyblue Posts: 151 Forumite
    RetroBob wrote: »
    The property I am buying has chancel repair in the title deeds. I know you can get insurance against this if you DON'T know that you are responsible, but where do I go now that I know that I am?
    Okay, this one is complicated, and technically the best advice that anyone can give you is to talk to your solicitor. Me, I would say, investigate it first, and then have a chat with your solicitor because too many of them are not as well informed as they should be.

    (My experience: saw solicitor about another matter, said I'd filled in some Power Of Attorney documents, and we needed certain details. Oh, said Sol, you don't need that. Oh, yes, said I, you do. No, said Sol, just done it and you don't. So I went home, looked at three solid internet sites, which said you did, and then carefully went through the site of the Court of Guardianship which had a specific instruction that you had to do exactly what I had said, and a detailed worked example, just in case there was any doubt. I sent a print out it to the Sol, with highlighter. I would like to think that he read it.)

    So, with that example in mind, I would say that you need the opinion of a GOOD solicitor, and should still do your own research.

    Just to get you started, however, here is the opinion of one firm of solicitors.
    It is possible provided that only a basic search has been carried out to obtain an insurance policy which provides indemnity against the cost of any repairs demanded up to certain limits, the higher the level of cover the higher the premium. It is not possible however to obtain indemnity insurance if a full chancel repair search is carried out.

    [No link - I can't use them apparently!]

    On another forum, a post by someone else who may have no more legal qualifications than I do (i.e. none), says:
    It is the uncertainty which the insurers have capitalised on, after all, you can't insure against a *definite* liability, you can only insure against a *potential* liability.

    Now, this sounds odd to me. I do know that the people who offer the standard chancel repair liability insurance do work on this principle - which has the advantage that people who, with a small amount of work, could find that they are NOT liable, will decide to pay up the (fairly small) amount of money required if you insure when there is no hard evidence. This is where the scheme makes its money. If they find that you know you have liability, then they won't insure you.

    However, consider the following case. If you have a Grade II listed building, then you have a legal obligation to maintain it. Does this mean that you can get no insurance for the roof, because you have a definite liability to maintain it? Maybe it does, but it seems a bit unlikely. (Of course, that doesn't mean that the premiums would be affordable, but that's another matter). So, Chancel Repair Liability is another building risk, and I would have thought that you would be able to find someone who would insure it - tho' again, possibly at too great a cost.

    In your position I would have a look round the church concerned, and see how well maintained it appeared to be. I would also see if I could find any records of CRL being activated by the church in the past, and if so to what extent. There are cases of CRL being spread so thin, that every person tapped would have had to pay about £38 each - and the legal costs would have been greater.

    After that it depends how attached you are to the house, and how far you have gone through the buying process. If you have a house which has a potentially huge liability which, if it is registered with the Land Registry (the Church has to do this by 2013 or CRL will lapse), will hang over the property forever, then it might be time to consider calling the deal off. If the right is registered, then it might seriously affect your ability to sell the land, even many years in the future.

    I would think that you would certainly have a case for bargaining down the price, as CRL is a liability which you did not (I presume) know about when the original price was agreed, and represents an additional, and so far unquantified, cost.

    At the very least investigate the history of the property (if you can) and get some good legal advice, and try a couple of insurance companies (small local ones might be a better bet than the big corporates). Ultimately, though, you may have to walk away from the deal.

    db
  • ems11
    ems11 Posts: 12 Forumite
    Hi there, i may be entering into this discussion a little late, but i have just gone through the same experience and understand a fair bit about this now.

    In terms of one of the posts by a solicitor stating you cant get indemnity insurance if the liability is confirmed... you can, i have it. it costs a fair bit more (in my case about 700 quid for 400k worth of cover in perpetuity), whereas insurance for potential liability is around 100 quid or less. I considered the options of whether or not to have the insurance, and to be honest, it wasnt an option as my mortgage lender insisted it (and its in the CML code) and i didnt want the parish church knocking on my door in years to come.
    One other thing to note is that my solicitor informed me that because chancel repair liability was confirmed, this now has to go on my title deeds. There is some debate about this, but at the end of the day they insisted it does. Which in turn means that the church can call on me to contribute in part/whole to any chancel repairs.

    If you have had a chancel check, and it shows as potential liability you can possibly get away with indemnity insurance for potential liability, however my solicitor insisted on doing the full chancel search, which uncovered it was confirmed liability (by checking tithe maps etc).

    One other thing to note about the insurance is that it can only be arranged via the solicitor (but can be done), and that if you approach the church or parish in question to ask if they intend to call on anyone with chancel liability in the near future to contribute, it is likely to render any insurance invalid (i nearly did that, thankfully my sols warned me not to or i would have gone and asked them directly).

    Of course if you are purchasing the house outright (ie no mortgage) then its your risk whether you get the indemnity insurance, personally i didnt want to take that risk.

    Also, re the debate about reduction of the value of the house for future sale... yes it may put some people off, but it wouldnt put me off. By virtue of the fact that i now have indemnity insurance in perpetuity (forever) and this is applied to the house (well to the land actually) then my surveyor was of the opinion that it wouldnt affect any resale value.

    Just out of interest, i did ask the vendors to pay for the insurance, they agreed and came up with a lessor one for 25 years, so i asked them for that contribution towards the one my solicitor had arranged, which was slightly more expensive, but in perpetuity, so i dont need to worry about renewing it.

    Hope that helps, pm me if you have any more questions or need more info.
  • first_time_buyer_8
    first_time_buyer_8 Posts: 3 Newbie
    Moving along from the racist comment stuff...

    Either way I think you're had over a barrel with this one and sometimes it's far easier to bight your lip and take it. No, I didn't mean it in that way... (queue comments!!...)

    Does anyone know if you can go ahead and purchase this cover without having to go through your solicitor? I've got the same problem and our solicitor wants to charge an additional £50 admin fee onto of the premium. Being a first time buyer, that could be best spent on the housewarming party ;)
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