Is chancel repair liability insurance really compulsory??!?

Land_Registry

Some of you may be interested in our recent Blog item on the subject - may help to shed some light on the issues involved from a registration perspective.

Doc_N

Land_Registry_representative wrote: »

Some of you may be interested in our recent Blog item on the subject - may help to shed some light on the issues involved from a registration perspective.

Thanks - interesting.

There seems to be a widespread belief that if the church hadn't registered its rights with the Land Registry by 12 October (registered or unregistered land), all future sales for value in respect of that land would be clear of any chancel repair obligations. Though, of course, any such liability would remain with the existing owners.

Not the case, then - the church can still successfully register its rights at any point up to a sale of the property, and the buyer will only be protected if he buys before any such registration.

The 12 October changes do look to have been very much oversold, and I do wonder how much was really achieved? Great for the church, but of very limited value for owners of land or houses.

ey143

That is my understanding also, having just completed on a house purchase last week and where I see that St. Mary's church in Watford is used in many examples online, to calculate chancel repair liability.

For the avoidance of doubt, date of registration is after completion (and not exchange) and furthermore it depends on when your conveyancing lawyer actually gets the registration completed, which could be several days/weeks after the date of completion. Don't be fooled into thinking it is the day you complete, because the registration document could be sitting in a pending pile to be worked on my the Land Registry along with the Church's chancel repair liability being in the same pile a few sheets before yours....and its the first one to be registered that counts.

JayEmBee

Here is what my daughter has been told by the conveyancing firm used by Nationwide.
" Since 12th October 2013 Chancel Repair liability is no longer an overriding interest. However, Chancel Repair liability has NOT stopped after 12th October 2013. If the liability has already been registered against a title then the liability lasts in perpetuity. If not registered before 12th October 2013 a PCC still has the right to register that liability at any point after that date UNLESS the land has been transferred for valuable consideration and that transaction has been registered at the Land Registry post 12th October 2013. Please note that land passing hands by way of gift, at undervalue, inheritance or on divorce does not qualify as ‘valuable consideration’.

We always act in your best interest and for that reason our policy is to obtain indemnity insurance to cover any potential risk of you facing Chancel Repair liability in the future – not only is this a more cost effective approach than carrying out a search, which is likely to recommend insurance anyway, but also faster as well.

We will charge an Administration Fee for the additional work which has been involved in obtaining an indemnity policy on your behalf. The fee is charged for agreeing the premium, explaining the position to you, collecting the requisite premium from you, supplying you with a copy of the policy and ensuring that the policy is properly placed on risk. This fee is £45 plus VAT and will be included in the financial completion statement which is provided prior to completion of the transfer. The fee for obtaining/arranging the indemnity insurance is in line with the agreed fees with Nationwide Building Society and is payable by you.

However, as part of its service TCS will review the title to see if a post 12th October 2013 transaction for valuable consideration has occurred and been registered. If that is the case then it will not be necessary to put any Chancel Repair liability indemnity insurance in place."


In other words - we wont do a search to find out if there is a registered interest - we will just issue the insurance policy regardless. The only search we will do is to see if the place has been sold since 12th October - and in that case wont issue the insurance.

This is barmy!!!! Surely without checking if there is a registered interest, it wouldnt make any difference if the place had been sold since 12th October - since if it was there in the first place then it would pass on with sale.

We want them to do a priority search for the registered interest - if anything shows up - issue the insurance - if not DONT!!!
Any suggestions??????

ey143

Some of you might find the following very interesting. Note the large jump in registrations leading up to the 12 Oct 2013 deadline.

https://www.whatdotheyknow.com/request/chancel_repair_liability_3

JayEmBee

I notice that answers have been provided by the land Registry representative - which are very useful.
Could you clarify if a Priority Search would prevent a CRL being added during the period of "freeze"??

Land_Registry

JayEmBee wrote: »

I notice that answers have been provided by the land Registry representative - which are very useful.
Could you clarify if a Priority Search would prevent a CRL being added during the period of "freeze"??

If a priority search was lodged now followed by a CRL (UN1) application then we would not usually complete the UN1 until such time as the priority search has expired or the protected disposition has been lodged and registered.

In the second scenario the UN1 should be registered with the same date as the disposition.

So whilst a priority search should prevent registration during the priority period it should not prevent the actual registration thereafter providing the UN1 application is of course in order.

JayEmBee

We have had a look at chancel repair liability insurance policies and I am beginning to wonder if they will provide ANY insurance for a new buyer - or are they only of any use to existing owners?

We could only find two policies in our forays - one from Zurich and ChancelSure from clsl.co.uk. Both said in their example policy docs that they WOULD NOT pay out if an interest had already been registered on the property.

The question is - when does the insurance policy start if we take it out? I understand from other discussions with insurance companies that you are unable to take out any insurance on property which you do not own. If this means that the insurance policy on commences on the day of completion then as far as I can see there are 2 scenarios.

Either an interest was already lodged, (or lodged in the period inbetween the search and the sale/registration) - in which case the insurance will never pay out so why have it?
Or at sale/registration there is no interest lodged on the title - in which case there can be no future liability as the house has been sold since 12th October - in which case there is no point in insurance.

The only use for the insurance is surely then for those of us who arnt selling. Or possibly should it be the reponsibility of the seller to rather than the buyer???