Chancel repair liability - what cover

pledgeX

I got back the results of my chancel search today and found out that my house is an area "which continues to have a potential chancel repair liability".

My solicitor has said that they can provide me with chancel indemnity insurance which covers the property for 35 years and would be a one off payment of £57.

What does this actually cover me for? I'm happy to pay the money as it's negligible in the grand scheme of things. But I don't want to find out I've paid for it and I'm not actually covered by it!

What's made it worse is that accompanying the report there's some info about different types of coverage such as the different levels of indemnity (£60k-3m) and successor and non-successor options. One of them happens to be £57 which is 250k coverage for successive cover, so I'm assuming this is the level of cover we have. Is this sufficient?

The other question was regarding the changes to the law that are happening in 2013. What is happening in that change time? Does it mean we should maybe shorten the length of the policy or change it to a non-successor policy?

Thanks for any help.

G_M

The churches have until 2013 to register properties for chancel repair liability. After that, any property they have not registered will be safe from chancel claims. So if you survive two more years without the church registering your property you'll be safe! So will any future buyer you sell to.

So insurance for successors seems pretty pointless. Cover yourself against future claims, and hope that nothing happens for 2 years. Your sucessors will then have nothing to fear (unless you re-sell next year!)

You could shorten the term of the cover, but remember, just because the church registers your property next year does not mean they will claim next year. Having registered by 2013, they could then make the actual claim in,say, 15 years time.

I'm not an expert so do not accept the above as 100% reliable!!

arborlinden

The other question was regarding the changes to the law that are happening in 2013. What is happening in that change time? Does it mean we should maybe shorten the length of the policy or change it to a non-successor policy?

Thanks for any help.[/QUOTE]

It seems likely that at any potential liability properties will be registered by Church by 2013. If no then you are safe but if so then where do you stand. I imagine the risk of a claim will increase so to insure against a claim might cost a lot more for registered properties. Considering the small costs involved I would get the best cover you can now: might save you serveral hundreds of pounds if your property is one of the ones unlucky to be registered. This is only my thoughts no expertise but in my experience the law of unintended consequences might be involved here.

pledgeX

Thanks for the replies folks.

What do you mean by the church registering a property? Is ours not already registered based on the fact we've been told we are in the area with potential liability?

Or do they have to specifically contact you and say you're on our list by 2013, and if they don't then you're scot free and can never be charged by them for any kind of repairs?

Richard_Webster

The Church has to register the liability against the registered title of the property before that date. If they do, you are stuck and indemnity insurance becomes substantially more expensive when you want to sell as if your cover is limited in time in any way the buyers will want perpetual cover.

If you sell after that date and nothing has been registered against your title then your buyer takes completely free of any liability. That is the most likely scenario.

There is a third situation, however. If you continue to own a property after 13 October 2013 you do not automatically become immune from the liability. It can still be enforced against you, even without registration, until you sell the property.

Obviously, as time goes by it is going to become increasingly difficult and expensive for the Church to check registered titles in the neighbourhood to see if any have not changed hands since 13 October 2013 and they may not be prepared to bother with the exercise, but they could.

Jo_Mc_2

We recently bought a house and the chancel search returned saying that we were in an area with the potential for repair liability. Our solicitor said we could either take out the insurance or not - he actually didn't feel it was worth it - so we decided not to.
However, when we went to sign the contract he said that he'd heard back from Nationwide, the building society who we'd arranged our mortgage with, and they had said that we had to take out chancel insurance cover before they'd release the mortgage funds so in the end we had to have it.