Chancel Indemnity

Raggie

Ah... A subject close to my heart....

Been learning a lot about this of late.

The risk is real, it is applied to the land on which the property stands and not the property as such.

Pixie states that the indemitty is worthless.

Do you mean that 1) there is no point buying it or 2) it won't pay out in the case of a claim.

I assume you are referring to point 1. Well would you say that all insurance that you do not claim on is worthless? Personally my car is insured against fire, personally I think it's more likley to be stolen. But yet I still insure for that risk.

Similar with chancel liabilty, the insurance does not
cost a great deal and buys you peice of mind.

That is to say it does not cost a lot if you purchase it prior to identifing a risk. Once a risk has been defined it costs a great deal more.

When I buy my next property i will purchase insurance no matter what the search report or solicitors advices, as these profesionals can and do make mistakes.

timmyt

Daft question. The Seller is walking away from the property, why would they pay for something that the buyer will beenfit from?

And, these cheap chancel searches are not 100% safe anyway, only based on postcode. They guarantee neither liability or no libility. Best thing to do is just take out insurance without doing a search as that can be as low as £15 per month.

Raggie

Timmy those chancel searches that are based on specific plots (not the cheap ones) are not 100% either!

Buy the insurance and sleep at night. IMHO

Pixy_2

The insurance is worthless because in most cases there isn't a risk. I was asked to pay a £170 indemnity on house I was selling because the parish is listed in the index that these people check. Actually like most parishes if you pull up the document indexed, it states no liability on any property in the parish. Someone is making a fortune out of (a) checkingthe index and (b) selling indemnities on every house sold in that parish (a densely populated London suburb) for a totally imaginary liability. It cost me £3.50 to download the relevant document and prove to the conveyancing solicitors that no insurance was needed.

There's no point in paying the insurance if there is no liability. You need to do a proper check that takes a few minutes and costs a few quid. If after that you think there is a liability on a particular property then you have to do something much more complicated and probably need an expert and about £120 to do it. The areas of the country where such liabilities do exist are very few. Liability is often indicated on the deeds. If there really is a chance of a liability the insurers are almost certainly not going to be prepared to sell you one of those straight forward indemnities

DVardysShadow

Pixy wrote: »

The insurance is worthless because in most cases there isn't a risk. I was asked to pay a £170 indemnity on house I was selling because the parish is listed in the index that these people check. Actually like most parishes if you pull up the document indexed, it states no liability on any property in the parish. Someone is making a fortune out of (a) checkingthe index and (b) selling indemnities on every house sold in that parish (a densely populated London suburb) for a totally imaginary liability. It cost me £3.50 to download the relevant document and prove to the conveyancing solicitors that no insurance was needed.

There's no point in paying the insurance if there is no liability. You need to do a proper check that takes a few minutes and costs a few quid. If after that you think there is a liability on a particular property then you have to do something much more complicated and probably need an expert and about £120 to do it. The areas of the country where such liabilities do exist are very few. Liability is often indicated on the deeds. If there really is a chance of a liability the insurers are almost certainly not going to be prepared to sell you one of those straight forward indemnities

It all seems so straightforward.

But it is actually all too easy to go off down this path and either render yourself ineligible for Indemnity insurance or invalidate it if you have it.

Raggie

DVardysShadow wrote: »

It all seems so straightforward.

But it is actually all too easy to go off down this path and either render yourself ineligible for Indemnity insurance or invalidate it if you have it.

tell me about it!!

OP check out one of my threads, when the legal process is complete I will update it... But I can say fact that deatailed searches can be wrong, that insurance after the event is very expensive, and that littigation may be needed to resolve such cases.

gauly

Personally I would go for the full search rather than the insurance. If the house is definitely liable to chancel repair then walk away or alternatively you could try asking the local parish if they intend to register for chancel repair in 2013 - get the answer in writing!

Most people just buy the insurance that covers themselves anyway but surely the house is going to be almost unsellable with an unlimited liability for fixing the church. Even with the insurance policy that you can pass on to the new owners there is a time limit on it. Would you buy a house that became liable for chancel repair in 10 years time?

It's certainly going to be interesting to see what happens in 2013 - as far as I know the church hasn't registered any chancel liability up to now (except historic ones like the Wallbank one mentioned above). Do you think they are just going to do loads of them at the last minute? Or if not why haven't they just said they aren't going to do it - and saved people millions of pounds on this stupid insurance?

Raggie

Gauly,

A full search will not always pick up liability (trust me, my full search didn't)

and a house with a charge registered does not suffer a risk of "unlimited liability".

Any claim made by the church on a parish is shared between all land owners.

The property purchased (ie the land on which it stands) is liable for a percentage of the churches claim upon the parish.

For example if a new estate is built within a parish boundry that land on which the homes were built could be registerd as having a liability. Say 0.85% of a claim.

This would then be split between all owners of land within that estate.

If there are an equal number of sized houses say 100

a £100,000 claim by the church would mean the eastate is liable for £850 of that and each house £8.50 of that charge.

So what I would ask is that either a purchaser buys insurance without questioning the liability. Or they spend some time and quantify what the risk is.

Once the risk is qualified the insurance is very hard to arrange.

DVardysShadow

gauly wrote: »

Personally I would go for the full search rather than the insurance. If the house is definitely liable to chancel repair then walk away or alternatively you could try asking the local parish if they intend to register for chancel repair in 2013 - get the answer in writing!

Most people just buy the insurance that covers themselves anyway but surely the house is going to be almost unsellable with an unlimited liability for fixing the church. Even with the insurance policy that you can pass on to the new owners there is a time limit on it. Would you buy a house that became liable for chancel repair in 10 years time?

It's certainly going to be interesting to see what happens in 2013 - as far as I know the church hasn't registered any chancel liability up to now (except historic ones like the Wallbank one mentioned above). Do you think they are just going to do loads of them at the last minute? Or if not why haven't they just said they aren't going to do it - and saved people millions of pounds on this stupid insurance?

:wall::wall::wall:

Hold up your hand in a thunderstorm and ask if lightning will strike.

There is a fudge here. If you don't like it, I can understand. The Chancel Repair liability is worth potentially hundreds of millions. AFAICS, the insurance is part of the fudge which makes it go away.

gauly

DVardysShadow wrote: »

:wall::wall::wall:

Hold up your hand in a thunderstorm and ask if lightning will strike.

There is a fudge here. If you don't like it, I can understand. The Chancel Repair liability is worth potentially hundreds of millions. AFAICS, the insurance is part of the fudge which makes it go away.

Sorry, I don't really understand this? The point I was making was that the insurance doesn't make the problem go away entirely. If you just get the basic insurance without doing the full check then you are covered for chancel liability - obviously - that is the point of the insurance. But it doesn't pay you for the huge devaluation of your house! Or am I missing something?